# What a stock-alert service's track record proves

Why a US or UK stock-alert or picks service's published record is usually arithmetic on prices, not fills, and what to ask for before you pay for one.

*https://stockmarketstack.com/guides/what-a-stock-alert-track-record-proves · background to Trading Journal Software*

**Answer:** Unless it shows fills in a named account, a stock-alert or picks service's record is arithmetic on market prices at each alert, not a result anyone earned. The FTC alleged that one seller's trackers were paper trades, padded with trades dated before its first alert. A registered adviser must show net results, fixed periods and the whole portfolio; a newsletter seller usually need not. Ask for the full timestamped alert log and recompute it yourself.

## How it works

A stock-alert service, a picks newsletter or a paid trading room sells a stream of calls: buy this
ticker, around this price, sell at that one. The record it advertises is built from the same calls,
and the question that decides what the record is worth is where its prices come from.

There are two possible sources. One is fills: what an account actually paid and received, with a
broker's records behind it. The other is market prices at the moment of each call, with an entry and
an exit taken from public data and the profit calculated as if somebody had traded exactly there. The
second needs no account at all, and nothing in the record tells you which one you are looking at
unless the seller says so.

The clearest primary-source description of the second kind is the Federal Trade Commission's
[complaint against WealthPress](https://www.ftc.gov/system/files/ftc_gov/pdf/2123002WealthPressComplaint.pdf),
filed on 12 January 2023 in the Middle District of Florida. These are the FTC's allegations; the
company settled, and the FTC sent refunds in April 2024. Subscribers, the complaint says, saw a
members' page with a "tracker" of past recommended trades and a calculated net profit from taking all
of them (¶63):

> none of the trades depicted in the trackers was actually made by WealthPress or its purported
> experts. Instead, they represent paper trading of a fictional portfolio that never actually exposes
> Defendants to the market. The entry and exit prices in the trackers are ostensibly taken from
> publicly available pricing data, and the profits or losses depicted are purely hypothetical.

Two further allegations show how such a record grows. Some trackers included "supposed trades that
pre-date the first trade the service recommended to subscribers", which the complaint calls "wholly
fabricated" (¶64). And in the sales videos, the defendants "searched historical price information for
significant price changes, and then pretended that their service had predicted those changes before
they happened" (¶32).

The gap that matters to a subscriber is the one between that arithmetic and an account. By the FTC's
account, WealthPress's own surveys found purchasers' results "typically varied—often
substantially—from those documented in Defendants' trackers" (¶53). Its records showed that consumers
"would have lost money overall" following one service, PrimeTime (¶55). For another, Blitz Alerts,
"despite a tracker purporting to show overall profits", substantial numbers of subscribers "and even
their own purported experts" could not realise the tracker's profits (¶56).

A record computed from prices is not fraud in itself; a seller can label it and compute it honestly.
What it cannot be is evidence that anyone earned it.

## Five choices that make a record look better

None of the following requires inventing a trade. Each is a decision about what to count, and each
one moves the headline number.

The first four come from the SEC Division of Examinations'
[Risk Alert of 17 April 2024](https://www.sec.gov/files/exams-risk-alert-marketing-observation-2024.pdf),
which describes what examiners found in the advertising of *registered* investment advisers. It is
not about alert services, and by its own words it "has no legal force or effect". It is useful here
because it names the techniques precisely.

1. **Which calls are in it.** Examiners saw advertisements that "included only the most profitable
   investments or specifically excluded certain investments", such as those "written off as a loss or
   were lower-performing".
2. **Only what was closed.** Advertisements "that included the performance of only realized
   investment information in the total net return figure and excluded unrealized investments". In an
   alert service this is the call with no stop that is never closed, and so never counts as a loss.
3. **The window.** Advertisements that "did not disclose the time period", and performance shown for
   "time periods when most investors would have experienced the advertised performance returns
   because of general market performance". A long-only picks record from a rising year mostly
   measures the year.
4. **A record that is not the accounts.** A "performance track record with securities that were not
   purchased by the advisers in a similar manner in their clients' accounts". The record and what
   anyone holds are two different things.
5. **The arithmetic.** This one is ours, not the SEC's. Three calls returning +25%, −20% and +20%
   add up to +25%. Followed with one stake carried from call to call, they compound to +20%
   (1.25 × 0.80 × 1.20 = 1.20). A record that sums percentages, sizes every call differently, or
   quotes returns on the option premium rather than the account can tell a reader very little about
   what an account would have done. The yearly figure that compounding gives is a
   [CAGR](https://stockmarketstack.com/glossary/cagr), and the worst fall along the way is the
   [maximum drawdown](https://stockmarketstack.com/glossary/maximum-drawdown).

There is a sixth gap that no choice creates: the subscriber trades later than the alert. In the
WealthPress complaint, the email or text alert often did not contain the trade, and subscribers had to
log in to the members' page to see it (¶65). The record uses the price at the alert; your fill comes
after you read it, and in a thinly traded stock the other subscribers reading the same alert are
trading at the same moment.
That difference is [slippage](https://stockmarketstack.com/glossary/slippage), and a record built from prices never shows it.

## The yardstick a registered adviser is held to

A seller of impersonal alerts is usually outside the rules below, for the reasons set out in [when trading software has to register as an adviser](https://stockmarketstack.com/guides/when-trading-software-must-register).
The rules are still the most useful checklist available, because each was written against one of the
choices above. A seller who cannot meet them is telling you something, even if nothing obliges them
to.

**The SEC Marketing Rule** ([17 CFR 275.206(4)-1](https://www.law.cornell.edu/cfr/text/17/275.206(4)-1))
binds registered investment advisers. An advertisement may not "include or exclude performance
results, or present performance time periods, in a manner that is not fair and balanced" ((a)(6)).
Gross performance must come with net performance, after "all fees and expenses that a client or
investor has paid or would have paid" ((d)(1)). Results must be shown "for one-, five-, and ten-year
periods, each presented with equal prominence" ((d)(2)), so the adviser does not pick the window. A
slice of a portfolio must come with "the performance results of the total portfolio from which the
performance was extracted" ((d)(5)). And the rule names the kind of record a price-built tracker is:
hypothetical performance, "performance results that were not actually achieved by any portfolio of
the investment adviser", including backtests and model portfolios.

**In the UK**, [COBS 4.6.2R](https://www.handbook.fca.org.uk/handbook/COBS/4/6.html) requires an
authorised firm showing past performance to make it "not the most prominent feature of the
communication", to cover "the preceding five years" in "complete 12-month periods", to state the
reference period and source, to disclose the effect of charges where figures are gross, and to carry
"a prominent warning that the figures refer to the past and that past performance is not a reliable
indicator of future results".

**The FTC route** is the one that reached the seller of stock-trade alerts described above. The WealthPress settlement
"prohibits them from making any claims about earnings without having written evidence to back those
claims up", according to the
[FTC's April 2024 release](https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-sends-12-million-refunds-consumers-harmed-deceptive-investment-claims).
That order binds those defendants. The principle it applies, that an earnings claim needs evidence
behind it, is a fair question to put to any seller: what is the written evidence for this number?

## Who trades against the alert

A record can be honest and the service still costly, when the author's own trading depends on
subscribers acting on the call. Each case below is described as the regulator or court described it,
with its status.

- **Steven M. Gallagher.** On 19 September 2025 a jury in the Southern District of New York found him
  "liable for securities fraud and manipulative trading" in an SEC civil case. Between December 2019
  and October 2021, according to the
  [SEC's statement](https://www.sec.gov/newsroom/speeches-statements/statement-jurys-verdict-trial-steven-m-gallagher),
  he urged Twitter followers to buy stocks "in which Gallagher had already amassed holdings", then
  "sold those stocks while he continued to recommend others buy them, never disclosing that he was
  selling", for profits of over $2.6 million.
- **Andrew Left and Citron Capital.** The SEC's complaint of July 2024
  ([LR-26056](https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26056)) alleges that
  "Left bought back stock immediately after telling his readers to sell, and he sold stock
  immediately after telling his readers to buy", and that Citron Research was presented as
  independent and uncompensated while the defendants had "compensation arrangements with hedge
  funds". In the parallel criminal case, a federal jury in Los Angeles convicted Left on 1 June 2026
  of one count of a securities fraud scheme and 12 counts of securities fraud, according to the
  [Justice Department](https://www.justice.gov/opa/pr/activist-short-seller-convicted-21m-stock-market-manipulation-scheme),
  which put the profits at more than $21 million.
- **Brett Rosen and RB Capital Partners.** The SEC's complaint, filed on 21 January 2026
  ([LR-26475](https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26475)), alleges that
  from at least January 2021 to June 2024 they promoted Solar Integrated Roofing on social media as
  "an attractive, long-term investment" while "making massive, undisclosed sales of their own Solar
  stock". A complaint is an allegation, not a finding.

The common thread is non-disclosure: holding or trading against a position while presenting the call
as advice. Disclosure is not the same as safety, though. A
[draft of the SEC Investor Advisory Committee](https://www.sec.gov/files/sec-iac-finfluencer-recommendation-11222024.pdf),
dated 22 November 2024, says regulators have difficulty where a promoter "simply discloses security
holdings in a company and easily profits off of their followers predictable trading behavior", and
that in such cases "there is arguably no fraud". The same draft notes that section 17(b) of the
Securities Act makes it unlawful to promote a security "without fully disclosing the receipt and
amount of consideration received or to be received". A line in a service's terms saying the authors
"may hold positions" is a disclosure, not an answer.

## What each kind of proof shows

| What you are shown | What it can show | What it cannot show |
|---|---|---|
| A screenshot or a profit image | That an image exists | Anything about the account behind it |
| The service's own tracker | The seller's arithmetic on public prices | That anyone traded it: the WealthPress trackers, by the FTC's account, never touched the market |
| The full alert log, with send times | Which calls went out, and when, if you archived it yourself as it arrived | Any fill; that a log the seller hands you later is complete |
| A brokerage statement | Trades in one account, if the statement is genuine | That it is the only account, that the trades followed the alerts rather than preceded them, or that you could have got the same prices |
| A registration record | That a supervised firm or person exists under that name | Returns, or even identity: FINRA warns that "bad actors might falsely claim to be registered and even provide doctored information", and the Justice Department has alleged false adviser registrations filed with the SEC for sham entities |
| Your own journal of fills | What you actually earned following the calls | Anything from before you joined |

Only the last row connects a call to a result, and only from the day you start. That is the one link
no seller-supplied document can establish: that the call reached you, with a time on it, before the
price moved.

## What it costs

The subscription is the visible price. In the WealthPress complaint the trade-recommendation services
were "typically priced between $1,000 and $2,500" (¶62), and memberships could auto-renew into a
recurring subscription that "can cost as much or more than $1,000 per year" (¶68). The FTC's refund
release describes the charge as "hundreds or even thousands of dollars", and the refunds went to
19,857 consumers.

The larger cost is the one the tracker hides: the difference between the record and your fills,
multiplied by the money you put behind each call. A service whose own records show it lost money, as
the FTC alleged of PrimeTime, costs its subscription plus its losses.

## What you can do about it

**Ask for the full alert log before paying.** Every call as it was sent, with a timestamp, including
the losers and the calls still open. Then ask two questions in writing: is the published record
actual or hypothetical, and if actual, whose account is it? A seller who will not answer the second
is telling you it is the first.

**Recompute it yourself.** One fixed stake per call, compounded from call to call, exiting at the stop
or the target as published, with your own commission taken off. Count an open call at today's price,
not as a pending win. Then compare your figure with the advertised one. A spreadsheet is enough; the
point is that you chose the rules.

**Pick the window yourself.** One, five and ten years, or since the first call, is what a registered
adviser has to show. Ask for those periods rather than the stretch the seller chose.

**Ask about the authors' own trading.** Do they hold the stocks they call, may they buy before an
alert or sell after one, and does any issuer or third party pay them? Ask for the policy in writing.

**Look the seller up, and read the result as a fact, not a verdict.** FINRA's
[registration check](https://www.finra.org/investors/protect-your-money/check-registration) starts
with asking "Who are you registered or licensed with and in what capacity?", then searching
BrokerCheck or the SEC's IAPD database. In the UK, use the FCA Firm Checker, and use only the contact
details it lists; the FCA's [clone firm page](https://www.fca.org.uk/consumers/clone-firms-individuals)
says to call 0800 111 6768 if there are none. A newsletter-style seller will often have no record
at all, which is consistent with the publisher's exclusion and is not by itself evidence of anything.

**Keep your own record from the first day.** Save each alert as it arrives, with the time, and import
your fills into a trade journal; the options are in
[trade journals](https://stockmarketstack.com/categories/trade-journals). After a few weeks, set your results beside the
service's tracker for the same calls. That comparison is the only track record that is about you.

**Report manipulation where it is handled.** In the US, the SEC's
[tips and complaints system](https://www.sec.gov/tcr) takes reports of "manipulation of a security's
price or volume" and of fraudulent offers of securities. In the UK, report to the FCA on the number
above.

A free group chat that tells members which stock to buy and when is a different business, paid by
the order rather than the subscription; that one is described in
[how a stock-tip group chat makes money from your order](https://stockmarketstack.com/guides/how-a-stock-tip-group-chat-makes-money).

This page describes how published records are built and what regulators have alleged and found in
named cases. Whether a particular service's record is honest is something only its log and your own
fills can tell you.

## Tools this bears on

- [Tradervue](https://stockmarketstack.com/tools/tradervue.md) — The category's oldest journal, 81 supported brokers, and a free tier that still works.
- [TraderSync](https://stockmarketstack.com/tools/tradersync.md) — Trade journal with options spread detection on Elite and market replay down to 250ms.
- [TradeNote](https://stockmarketstack.com/tools/tradenote.md) — The open-source trade journal you run in Docker, or rent hosted for $4.99 a month.

## FAQ

### What does a stock-alert service's win rate measure?

Whatever the seller decided counts as a win. A rate built from closed calls leaves out every losing position that is still open, and a rate built from the alert price leaves out what a subscriber actually paid. Ask which calls are in the denominator and at what prices before reading the number.

### Does a disclaimer saying the results are hypothetical make the record honest?

It tells you the record is not from an account, which is the most important fact about it. It does not make the figures typical. In the WealthPress complaint the FTC pleaded that the seller's disclaimers, which said past performance was not indicative and the examples were exceptional, did not cure the impression its marketing gave.

### Is it illegal for a stock picker to own the stocks they recommend?

Not in itself. The cases the SEC and the Justice Department have taken to trial turned on selling while still telling followers to buy without disclosing it, or trading against a call while claiming independence. An SEC advisory committee draft noted that a promoter who discloses a holding and profits from followers' predictable buying is hard to reach under existing anti-fraud law.

### Is a broker statement proof of a track record?

Only of trades in that one account, if the statement is genuine. It does not show that the account is the seller's only one, that the alerts went out before the trades rather than after, or that a subscriber could have traded at the same prices.

### How do I check whether a stock-alert seller is registered?

In the US, ask who they are registered with and search them in FINRA BrokerCheck or the SEC's Investment Adviser Public Disclosure database. In the UK, search the FCA Firm Checker and use only the contact details listed there. A newsletter-style seller often has no record, because it relies on the publisher's exclusion.

## Sources

1. [Complaint, FTC v. WealthPress Holdings, LLC et al., No. 3:23-cv-00046 (M.D. Fla.)](https://www.ftc.gov/system/files/ftc_gov/pdf/2123002WealthPressComplaint.pdf) — Federal Trade Commission, 2023-01-12. The complaint behind the settlement in the April 2024 refund release below; no later filing restates its allegations.
2. [FTC Sends $1.2 Million in Refunds to Consumers Harmed by Deceptive Investment Claims](https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-sends-12-million-refunds-consumers-harmed-deceptive-investment-claims) — Federal Trade Commission, 2024-04-09
3. [Initial Observations Regarding Advisers Act Marketing Rule Compliance (Risk Alert)](https://www.sec.gov/files/exams-risk-alert-marketing-observation-2024.pdf) — U.S. Securities and Exchange Commission, Division of Examinations, 2024-04-17
4. [17 CFR 275.206(4)-1, Investment adviser marketing](https://www.law.cornell.edu/cfr/text/17/275.206(4)-1) — Legal Information Institute, Cornell Law School, read 2026-10-27
5. [COBS 4.6, Past, simulated past and future performance (non-MiFID provisions)](https://www.handbook.fca.org.uk/handbook/COBS/4/6.html) — Financial Conduct Authority, 2026-04-06
6. [Statement on the Jury's Verdict in the Trial of Steven M. Gallagher](https://www.sec.gov/newsroom/speeches-statements/statement-jurys-verdict-trial-steven-m-gallagher) — U.S. Securities and Exchange Commission, 2025-09-19
7. [Litigation Release No. 26056, SEC v. Andrew Left and Citron Capital, LLC](https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26056) — U.S. Securities and Exchange Commission, 2024-07-26
8. [Activist Short Seller Convicted in $21M Stock Market Manipulation Scheme](https://www.justice.gov/opa/pr/activist-short-seller-convicted-21m-stock-market-manipulation-scheme) — U.S. Department of Justice, 2026-06-02
9. [Litigation Release No. 26475, SEC v. Brett Rosen, et al.](https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26475) — U.S. Securities and Exchange Commission, 2026-02-04
10. [Draft recommendations of the Disclosure Subcommittee regarding financial influencers](https://www.sec.gov/files/sec-iac-finfluencer-recommendation-11222024.pdf) — U.S. Securities and Exchange Commission, Investor Advisory Committee, 2024-11-22
11. [Check Registration](https://www.finra.org/investors/protect-your-money/check-registration) — FINRA, read 2026-10-27
12. [Hong Kong Businessman Indicted for Role in Filing False SEC Investment Adviser Forms on Behalf of Sham Entities](https://www.justice.gov/opa/pr/hong-kong-businessman-indicted-role-filing-false-sec-investment-adviser-forms-behalf-sham) — U.S. Department of Justice, 2025-11-14
13. [Clone firms and individuals](https://www.fca.org.uk/consumers/clone-firms-individuals) — Financial Conduct Authority, 2025-05-14
14. [Report Suspected Securities Fraud or Wrongdoing](https://www.sec.gov/tcr) — U.S. Securities and Exchange Commission, 2024-11-18

*Last updated 2026-10-27. A reference page, corrected in place — not a dated post.*