October 12, 2016
CFTC Charges Utah Resident Kimball Parker and Florida Resident Timothy Baggett with Fraud and Other Violations in Connection with Offering and Selling a Futures Trading System
Parker’s Company, MakeYourFuture, LLC, and Baggett’s Companies, Changes Worldwide LLC and Changes Trading LLC, Are Also Charged
Washington DC — The U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the District of Utah, charging Defendants Kimball Parker of Lehi, Utah, and his Utah company, MakeYourFuture, LLC (MYF), and Timothy Baggett of Lakeland, Florida, and his Florida companies, Changes Worldwide LLC and Changes Trading LLC, with fraud and failure to make required advertising disclosures.
The CFTC Complaint alleges that the Defendants engaged in a fraudulent scheme to misrepresent the profitability and success of a futures trading system that they sold to customers, including making fraudulent representations in marketing materials, on their websites, and in one-on-one communications with customers and prospective customers regarding the profitability of their trading system. According to the Complaint, from at least March 2014 through the present, the Defendants induced at least 289 customers to pay them more than $853,294.98 for the trading system.
Specifically, as alleged, the Defendants made material, false representations in his solicitations of customers and prospective customers, including that their trading system had “never had a losing month,” and generated “300% annual returns.” According to the Complaint, to support these claims, Defendants posted so-called “documented and verifiable results” on their websites showing returns of between 11% and 68% each month from January through December 2014.
However, as the Complaint further alleges, Defendants’ “documented and verifiable results” were false and did not reflect any actual trading of real money in any futures account. Meanwhile, according to the Complaint, Parker and Baggett consistently lost money trading futures in their personal accounts, and customers also consistently lost money attempting to trade according to the system, a fact that Defendants were made aware of by customer complaints.
Additionally, the Complaint alleges that Defendants failed to provide advertising disclosures to customers and prospective customers relating to hypothetical trading results and customer testimonials, as required under CFTC Regulations.
The Live Training Room
According to the Complaint, Defendants furthered their deception by setting up a “live training room” where customers could “‘look over the shoulder’ online of an experienced trader who is using our system.” The Complaint alleges, however, that in reality, most – if not all – of the trading in the live training room occurred in a simulated account, which would allow them to achieve simulated profits that would be impossible in real life.
In yet another aspect of the solicitation fraud scheme, the Complaint alleges that Defendants also offered for sale a “robot” that automatically placed trades via the customer’s trading account according to signals generated by the trading system. According to the Complaint, Defendants claimed that “your robot knows exactly what to do,” and has a “+90% success rate!” In reality, the Complaint alleges, there was no 90% success rate for the robot, and the robot had never been tested using real money. The Complaint further notes that, “during the CFTC’s investigation, Defendants acknowledged that the Robot did not work and that customers lost money attempting to use it.”
In its continuing litigation, the CFTC seeks restitution to defrauded clients, disgorgement of ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against futures violations of federal commodities laws, as charged.
The CFTC thanks the U.S. Securities Exchange Commission, the Florida Office of Financial Regulation, and the U.S. Attorney for the District of Utah for their assistance in this matter.
CFTC Division of Enforcement staff members responsible for this case are Ashley J. Burden, Jeffrey Gomberg, Elizabeth M. Streit, Scott Williamson, and Rosemary Hollinger, as well as Jeremy Christianson from the CFTC’s Office of Data and Technology.
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CFTC’s Fraud Advisories: Commodity Trading Systems Sold on the Internet
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Trading Systems Sold on the Internet Advisory, which states that the CFTC has seen an increase in websites that fraudulently promote commodity trading systems and advisory services.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
Last Updated: October 12, 2016