The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court order for more than $3.5 million in restitution and civil monetary penalties against Nicholas Trimble and his two companies, Capstone FX Quantitative Analysis, Inc., and Beekeepers Fund Capital Management, LLC.
A press release issued by the CFTC states that the companies, based in Colorado, resolves the CFTC’s November 7, 2011 Complaint charging Trimble and his companies with commodity pool and managed account fraud.
U.S. District Court of Colorado Judge Philip A. Brimmer entered a Consent Order for Permanent injunction against Trimble, requiring him to pay $887,399 in restitution, and a $400,000 civil monetary penalty to settle the CFTC’s charges against him.
Specifically, the CFTC’s 2011 action against Trimble, Capstone, and Beekepers charged them with fraudulently soliciting and accepting more than $1.1 million from customers to trade foreign currency through pooled and managed trading accounts using automated forex trading system, which they named the “Gladiator System.”
Trimble also made false representations to customers regarding their trading successes, and misappropriated approximately $441,000 of customer funds and used the money for gambling at Las Vegas casinos and for Trimble’s personal expenses.
The Order permanently bans Trimble from engaging in any commodity-related activity, including trading and registering with the CFTC, and also prohibits him from violating the anti-fraud provisions of the Commodity Exchange Act.
In late Janurary, Judge Brimmer entered an Order for Default Judgement and Permanent Injunction against Capstone and Beekepers that requires the two companies to pay a total of more than $885,000 to victims of the fraud, and a total of more than $1.3 million in civil monetary penalties.