Yet another "live day trading room" and trading system vendor is charged with fraud by the CFTC.
Kimball Parker and Timothy Baggett of Changes Trading enticed 289 individuals into spending over $850k in fraudulently promoted trading systems and live trading room memberships. The victims experienced massive trading losses totally an estimated at 2.5 to 5 million US dollars.
CFTC investigators uncovered a graveyard of faked and fraudulent promotional materials.
Neither Kimball Parker or Timothy Baggett had ever traded successfully. Prior to being promoted as "professional day traders" by NinjaTrader, both individuals were well-known hustlers in the MLM/Pyramid scheme community and sold a range of highly dubious health products that supposedly cured all manner of sickness and maladies.
Thanks for reading today’s update of Changes Trading
Another day, and yet another “live day trading room” and trading system vendor is shut down by the CFTC.
The website has recently been pulled from the internet, but an archive copy of the website can be found here.
What was ChangesTrading.com selling? The business is owned and operated by two individuals: Kimball Parker of Lehi, Utah and Timothy Badgett of Lakeland, Florida. The business recently operated a “live day trading room” that specialized in trading the Emini SP500 futures contract, and also offered a “Robot” trading system that could be auto-traded using NinjaTrader via broker direct connection. The cost of the “live day trading room” and trading system ranged from $1,995 to $2,995, with an additional $150 per month in licensing fees and live trading room access.
A rash of complaints
From February 2015, to as recently as September 2016, TradingSchools.Org received a total of 11 customer complaints alleging fraud.
Prospective purchasers of the system and the live day trading room uniformly described how they were enticed by supposed “100% verifiable trading results” from a “verifiable futures trading account.” The following are several copies of spreadsheets that were used as marketing materials to sell the product.
How the fraud was marketed
In interviews with several of the victims, it appears that the genesis of the fraud began with a listing on the NinjaTrader Brokerage/Ecosystem website. The victims also described a webinar that was promoted by NinjaTrader on June 17, 2014. The following is the marketing and promotional headline that was used by NinjaTrader Brokerage/Ecosystem:
Trade Like a Pro with Kimball Parker of Make Your Future – 6/17/14
Join us as we welcome Kimball Parker of Make Your Future to our Trade Like a Pro webinar series June 17th at 4:15 PM Eastern time.
Register here: http://ninjatrader.omnovia.com/register/30501402342
In speaking directly with victims of the fraud, the underlying argument was that since NinjaTrader Brokerage/Ecosystem had actively promoted ChangesTrading.com through a business listing and a NinjaTrader Brokerage/Ecosystem webinar…this implied that NinjaTrader was implicitly endorsing the company. Or at the very least, had vetted the company or had an established relationship with the company.
TradingSchools.Org reached out to NinjaTrader Brokerage/Ecosystem and requested comment regarding the allegations of fraud by the CFTC. NinjaTrader replied that based on their method of continued vendors audits that occur post-listing, the vendor had been removed from the NinjaTrader website on or about April 2015.
In a private conversation with NinjaTrader, my sense is that they are actively in the process of reevaluating the NinjaTrader Ecosystem. Though I cannot comment on exactly what that means, I am 100% confident that they understand that changes need to be immediately made. Though this is of little consolation to the victims of the fraud, it is at least a small victory to know that NinjaTrader is taking a more active stance on safeguarding customer relationships.
How many people got ripped off?
The CFTC investigation revealed 289 victims were induced to spend a total of $853,294 for the fraudulent trading system and live day trading room. The average victim spent $2,952 with the company.
The CFTC revealed that one customer reported losing more than $100,000 from their live trading account. In TradingSchools.Org interviews with victims, we tallied nearly $200,000 of self-reported losses. It is important to note that the reported losses from our interviews are self-reported and were not independently verified. However, I believe it would be a safe estimate to assume that total trading losses amongst all victims would range between 2.5 million and 5 million dollars. Once again, this is an estimate based on average losses per victim.
Who are these scammers?
It appears that prior to being promoted by NinjaTrader as “professional trading educators”, both Kimball Parker and Timothy Baggett were long-time network marketers promoting various pyramid marketing schemes.
Some of these network marketing, pyramid scheme type products have made some very dubious claims:
- ThinSlym Weight Loss: a weight loss pill that is guaranteed to make body fat quickly disappear. Exercise and dieting are not required.
- ThinSlym Cleanse: a pill that is guaranteed to remove all toxins from the body and add an average of 10 years to your life.
- Reaction Cardiovascular Supplement: a powder that is guaranteed to strip cholesterol from the cardiovascular system and immediately repair the human heart.
- Provide Replacement Shake: a meal replacement shake that is described as the world’s most nutritious and delicious milkshake that NASA uses for all space travel.
These are just a few of the pyramid schemes orchestrated by Kimball Parker and Timothy Baggett. Several others include Leanness Lifestyle University, Changes Travel, Changes Trivia, Changes Wireless, Changes Home Security, and Changes Insurance. All organizations and products are pyramid scheme variates.
Claims of massive profits
Kimball Parker and Timothy Baggett represented themselves as extremely profitable traders. Marketing materials and falsified spreadsheets that the CFTC recovered included claims that their trading system, “never had a losing month” and generated “300% annual returns”. In addition, they claimed a success rate of, “83% – 93% winning trades, every single day, month after month, year after year. Our documentation of profitable results date all the way back to 2009.”
However, both Kimball Parker and Timothy Baggett admitted to CFTC investigators that everything was falsified and fraudulent.
The CFTC audited the actual trading results of both individuals and discovered that Timothy Baggett has never actually had a live trading account. And that Kimball Parker had traded with a live trading account in 2014 and 2015, both years he lost between $10k to $11k.
Both Kimball and Baggett also claimed that prospective purchasers could realistically expect to earn between $200 – $1,000 per day trading the system. However, defendants admitted to CFTC investigators that they were unaware than anyone had ever made a profit with their trading system.
CFTC investigators discovered that all of the “Customer Testimonials” were fabricated. In addition, the defendants claimed that all of the trades conducted inside of the “live trading room” were executed with live trading accounts. However, CFTC investigators revealed that no live trading accounts were ever used. The live trading room was broadcast displaying only the NinjaTrader simulator.
Probably most damaging was that Kimball Parker admitted to CFTC investigators that he knew that the trading system did not actually work, it was “dangerous”, and that customers would definitely lose money if they traded it. Nonetheless, Kimball Parker knowingly allowed customers to have the trading system auto traded with customers live, real money trading accounts. The end result was predictable, with many individuals quickly draining their trading accounts to zero.
Wrapping things up
In my opinion, the most egregious insult is that both defendants freely admitted to CFTC investigators that their trading system was virtually guaranteed to lose, from day 1. But with a cavalier and thoughtless attitude, they helped customers install their “trading system” onto a trading platform and then have the trades auto executed; the entire time they knew that each customer was likely to lose all of their trading account.
How could a human being be so devoid of conscious? How can someone be so dark, so black in their soul, that they would knowingly walk these poor victims, step by step into the gas chamber?
Thank you CFTC
A very big thanks to the hard working investigators at the CFTC that really dug deep on this investigation. The CFTC attornies and investigators pour hundreds of hours into each of these enforcement actions. They truly care about helping average people. And part of helping the public is advising the public to simply avoid anything that “sounds too good to be true.” Changes Trading was definitely of the “too good to be true” variety.
It is also important to realize that although the CFTC has gotten to be very effective at shutting down these scams, it is rare that a victim will every receive compensation for losses. Individuals need to also take personal responsibility for making poor choices.
Thanks for reading, don’t forget to leave a comment below. And for those interested in the granular details of how this fraud was executed, I have included the court filing of the CFTC enforcement action.Changes Trading