... Was Fontanills really Wall Street's most respected hedge-fund manager? I asked the optionsXpress chief. "He ran a hedge fund that generated very nice returns for the years it was open," Fisher said. After saying Fontanills -- who still runs seminars under contract -- isn't an optionsXpress employee, Fisher's firm sent me 17 books by Fontanills and put me in touch with Chicago Board Options Exchange educator Jim Bittman, who said he taught similar techniques. OptionsXpress gave me excerpts from a 2001 letter that Fontanills sent to investors in his Pinnacle Investments of America fund. These showed gains of 48% for 1998 and 83% for 1999, and a 24% loss for 2000. There was no mention of how much money was involved. The fund's account custodian was a Salomon Smith Barney broker in Hallandale, Fla., named Jose A. Gomez -- Fontanills' friend and cousin. But e-mails from Fontanills to Gomez's boss on Sept. 10, 2001, show that Fontanills was trying to stop Smith Barney from liquidating his fund's account. "This will cause serious losses," wrote Fontanills, "and will essentially put us out of business." Neither Smith Barney nor the Options Clearing Corporation knew how to price his positions, Fontanills argued. Fontanills says he prevented big losses by moving the account. In 2002, Smith Barney fired Gomez and the NASD then barred him for failing to provide information to investigators. (Barron's couldn't determine the nature of the inquiry.) Fontanills ultimately closed the hedge fund, he says. "Managing money for other people is different from managing your own money," he told me in an interview. The Bottom Line OptionsXpress shares look overvalued after a strong run. The firm's bid to boost growth by buying a seminar group seems ill-advised, based on the record of the group's founder. But Fontanills came to grief managing his own money, too. In June 2003, he opened a New York account with the French-owned broker Fimat. By November, according to a complaint Fimat filed in Manhattan's federal court, Fontanills had run up losses of more than $6 million. When he refused to honor margin calls, Fimat liquidated his positions and sued him for the $6 million. Fontanills again argued Fimat didn't know how to price his sophisticated options strategy or calculate the margin requirements. The dispute wound up before arbitrators, who ordered Fontanills to pay Fimat $1.8 million with costs. He paid. ... After 10 years of applying his Optionetics strategies, Fontanills' wealth wasn't what you might expect. When opening his Fimat account in 2003, he listed his net worth as $4 million. Four months earlier, his sworn financial statement in a Massachusetts divorce court represented his personal net worth as $7,150, plus another $473,500 in a trading business. His annual income, he told the court, was less than $15,000. "Both financial statements were correct at the time they were made," Fontanills said in an e-mail last week. He has a new trading business, incorporated in the name of his current wife, called the Robo Trader Algorithmic Trading Fund. ... barrons
Thanks for posting this. If you scratch the surface of the guys who promise to teach you how to make an easy 5% monthly trading options, you'll find a lot of such stories.
You mean even the "Master and Founder" of Optionetics can't make money using his methods?! But it's just so easy. You can throw on a trade and go on vacation and be a big winner! For a mere $4495 you can learn "The Secrets of the Pros!". I can't believe they can still sell this over priced crapola. Just buy an option book and do it yourself - savings: $4465. "2-day Optionetics Seminar Purchase Form The 2-day Optionetics Seminar is your chance to get inside the heads of professional traders and discover how easy it can be to apply Optionetics trading strategies to your own success. Register now for the 2-day Optionetics Seminar - your ticket to high-reward, low-stress trading. YES! I want to learn proven Optionetics trading strategies and learn how to become a successful options trader. I will receive two days of education, One quick start guide, Four strategy guides, Six DVDs, 14 CDs and special attendee-only benefits. Price: $4,495.00 + S&H
George Fontanills is a millionaire, quite brilliant and runs his own business. If you want to learn about option and you have hard time reading free books and going to free seminars he will brake it down for you. A modest fee of $4500 will get you in his 2 days seminar. If you still don't get it he has other seminar$, maaany more. He also has a lot of other products as long as you are intere$ted. As a basic option teacher he is overpriced, but good. You pay, he gives you the material, you ask questions, he answers your questions. The End. As a trader no one really knows how good he is, but don't even think about asking for his records or the tracking records of his associates they will NEVER tell you. My personal opinion is that this is the way it should be. Does he make money by trading options ? Maybe. Does he make money by teaching about options ? You bet. Why do people keep on asking/wanting to see the performance of their "mentor", is you stupid ? If someone can make money by trading he will probably trade, not teach. Of course there are a few excpetions, but George isn't one. You decide, how would you like to pay, personal checks, Mastercard or Amex ?
Divorced marriage counsellor overweight personal trainer broke trader teacher people would like to model successful people he may teach well and that's all good. But to demand such a price, one should back it up with a track record.
What really bothers me is that it's OptionsXpress that bought this junky company. I like OE, respect their owners, and consider them to be a quality broker. I cannot understand this purchase. Even if it makes money for them, it's not a reputation builder. Mark
They care more about money than reputation, what's to understand ? A few years ago Thinkorswim merged with Investools. Companies like that compliment each other. There is going to be a crossover of clients... from one company to the other and viceversa. Wondering who is going to take over Etrade.