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CFTC charges Nicholas Trimble and his two companies with solicitation fraud in million dollar forex scheme

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The US Commodity Futures Trading Commission (CFTC) has filed a civil injunctive complaint charging defendants Nicholas Trimble and his companies, Capstone FX Quantitative Analysis, Inc. (Capstone) and Beekeepers Fund Capital Management, LLC (Beekeepers), all of Denver, Colorado., with fraudulently soliciting at least USD1.1 million from customers to trade foreign currency (forex) through pooled and managed trading accounts using a proprietary forex trading system.

On the same day the complaint was filed, 7 November, 2011, Judge Philip A Brimmer of the US District Court for the District of Colorado, Denver Division, entered a restraining order freezing Trimble’s, Capstone’s, and Beekeepers’ assets, prohibiting the destruction of books and records, and granting the CFTC immediate access to such documents.

The CFTC’s civil complaint alleges that from at least June 2009 to the present, Trimble, through Capstone and Beekeepers, fraudulently solicited customers to invest in pooled and managed forex trading accounts. Trimble falsely claimed that he used a proprietary, fully programmable, automated forex robot trading system that he called the “Gladiator system” to trade customer funds, according to the complaint.

Trimble also falsely claimed that Capstone actively manages more than USD5 million in forex trading accounts and that Capstone’s forex trading system has consistently generated monthly profits of at least three percent over the last four years, according to the complaint.

In addition, Trimble allegedly falsely claimed that Capstone received a USD20 million purchase offer for the Gladiator trading system but turned the offer down because the system was too valuable. Trimble also falsely claimed that Capstone secured a commitment from a reputable trading firm to invest USD5 million based on the Gladiator system’s proven success, according to the complaint.

Moreover, the complaint alleges that Trimble, Capstone, and Beekeepers misappropriated approximately USD441,000 of customer funds and used the money for gambling at Las Vegas casinos and for Trimble’s personal expenses.

In its continuing litigation, the CFTC seeks a return of ill-gotten gains, restitution to defrauded customers, civil monetary penalties, trading and registration bans, and permanent injunctions against further violations of the federal commodities laws.

CFTC Division of Enforcement staff responsible for this case are Brigitte Weyls, Joseph Patrick, Susan Gradman, Scott Williamson, Rosemary Hollinger, and Richard Wagner.

 

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