CFTC seeks freeze of assets in Oklahoma Ponzi scheme involving over USD30m
The US Commodity Futures Trading Commission has filed an enforcement action against Mark S. Trimble, of Edmond, Oklahoma, and his company, Phidippides Capital Management, with offices in Oklahoma City.
Trimble, who controlled Phidippides, also managed a private hedge fund named Phidippides Capital, which the CFTC alleges was a Ponzi scheme.
In conjunction with the filing of the complaint in the US District Court for the Western District of Oklahoma, the CFTC is seeking a statutory restraining order freezing defendants' assets and preserving records. Trimble has consented to the entry of an asset freeze order.
The CFTC's complaint alleges that from at least 2005 to the present, Trimble and PCM operated a USD34m hedge fund with approximately 60 investors and traded partly in the name of Phidippides Capital, a Delaware company incorporated by Trimble.
Since at least October 2007, Trimble and PCM allegedly issued false account statements, failed to disclose the fund's actual multi-million trading losses, and operated the fund as a Ponzi scheme, paying participant redemptions based on the fund's fabricated profitability.
Additionally, the defendants allegedly received over USD1m in management fees based on false reports of trading profits.
According to the complaint, Trimble's activities were exposed in late January 2009, after Trimble provided the Federal Bureau of Investigation a fictitious 2008 year-end trading account showing millions of dollars in trading profits that did not square with actual trading statements issued by Trimble's brokerage firm that disclosed millions of dollars in trading losses.
Trimble subsequently stated in an email sent to his brokerage firm, and addressed to 'family, friends, and clients', that he had not been 'honest' about the hedge fund's trading results, explaining: 'The reason our balances are off is because I could not look myself in the mirror and face all of you and notify you that in the last quarter of 2008 we lost all the profits for the year and then some.'
Stephen J. Obie, acting director of the division of enforcement, says: 'Through the swift action of CFTC staff, millions of dollars have been frozen, which ultimately we will seek to return to the victims Trimble deceived by his scheme. The CFTC continues to zealously prosecute these lecherous schemes, so that as many assets can be preserved as possible as we fulfill our vital mission to protect customers from fraud and abuse.'
The CFTC's complaint seeks civil monetary penalties, disgorgement of ill-gotten gains, restitution to defrauded customers, and injunctive relief, among other sanctions.
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