A Utah federal judge entered an order against a trader and his company for providing misleading information about an automated trading system.
The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Bruce S. Jenkins in the U.S. District Court for the District of Utah entered a Consent Order against DefendantsKimball Parker of Lehi, Utah, and his Utah company, MakeYourFuture, LLC (MYF), who were charged with fraud and other violations in connection with the offering and sale of a futures trading system marketed under the names ‘MakeYourFuture’ and ‘Changes Trading.’ The Consent Order, entered on May 19, 2017, requires Parker and MYF, jointly and severally, to pay restitution to defrauded customers totaling $853,294.98, plus a $354,000 civil monetary penalty.
– CFTC press release
The CFTC initially brought the complaint which was heard in front of US District Court Judge Bruce Jenkins, who entered a consent order – an order which is worked out between the parties involved.
The most recent order is part of an ongoing legal affair which has entangled several financial professionals.
In February, another judge entered a default judgment – a judgment which is entered because the defendant doesn’t challenge it.
Previously, on February 1, 2017, the Court entered a Default Judgment against Defendants Timothy Baggett of Lakeland, Florida, and his Florida companies, Changes Worldwide LLC and Changes Trading LLC (together, Changes), also for fraud and other violations in connection with their role in the offering and sale of Parker’s futures trading system. The Default Judgment requires Baggett and Changes, jointly and severally, to pay restitution to defrauded investors totaling $498,600.97, plus a $1,495,802.91 civil monetary penalty.
– CFTC press release
Timothy Baggert – developer of the trading system that was designed to automatically trade e-mini S&P 500 futures’ contracts on the Chicago Mercantile Exchange.
Kimball Parker – owner of MakeyourFuture, a multi-level marketing company that started selling the system through its affiliate, Changes Worldwide, in 2014.
Changes Worldwide and Changes Trading marketed the trading system via their websites, www.changesworldwide.net, www.trading4change.com, and www.changestrading.com. Parker provided all trading system-related content for the websites, subject to Baggett’s approval.
– CTFC Complaint
Parker also continued to market his system through MYF’s website at www.lmyf.com, which was separate from the Changes websites.
The alleged scam
The defendants made a series of statements in which the system was touted as having enormous results.
The monthly charts purported to show returns of between 11 % to 68% per between January and December 2014, and profits of between $2,830 and $17,037.50 per month on a $25,000 trading account. The monthly charts also purported to show the percentage of ‘winning trades’ generated by the system each month; these percentages ranged from 88% to 93%.
– CTFC Complaint
In some marketing material, the defendants claimed traders could “earn a full-time income working just 2 hours a day.”
In fact, these results were not real:
During the CFTC’s investigation, Parker admitted that the results on the spreadsheets—and indeed all of the trading results touted in Defendants’ promotional materials—were hypothetical and simulated.
– CFTC Complaint
The spreadsheets that you inquired about that are on the CT [Changes Trading] website are spreadsheets that I produce each month based upon the trading results of the system in a ‘perfect world.’ Parker told the CFTC during the investigation. “It is impossible to duplicate the ‘system’ because of the human element.
– CFTC Consent Order
In a speech given in March to a conference sponsored by the Futures Industry Administration (FIA), Sharon Bowen the CFTC commissioner said that approximately three of every four trades are made using an automated trading system like this one.
According to our staff, algorithmic trading first accounted for 74% of orders in 2015 and 76% in 2016, and accounted for 64% of total trading volume in 2015 and 68% in 2016.
– Commissioner Sharon Y. Bowen
Whenever trading with a trading system, the trader should always be driven by the Latin phrase, caveat emptor, buyer beware.