Last Updated March 13, 2009
July 23, 2009: The hearing scheduled for July 23 in this matter has been postponed. The receiver and the CFTC will be filling a motion for an agreed interim distribution to the customers while other issues relative to the distribution are worked out.
May 19, 2009: The commission has filed a Rule to Show Cause against Mark Trimble seeking to have him held in contempt of court for violating the asset freeze provisions of the restraining order and preliminary injunction. Mr. Trimble has filed a reply. The matter is set for hearing on May 29, 2009 at 9:30 a.m
April 21, 2009: The Honorable Timoty DeGiusti appointed C. David Rhoades of Turnaround Professionals as Receiver in this matter. He can be reached at Turnaround Professionals, LLC, 120 N.Robinson, Suite 1920, Oklahoma City, OK 73102. Ph (405) 235-3040, Fax (405) 232-2262.
March 11, 2009: The CFTC, with the agreement for counsel for the defendants, filed a motion seeking appointment of a Receiver in this action. The purpose of a Receiver is to gather the assets of the defendants, preserve them for eventual liquidation and distribution of the proceeds to the victims of the fraud. The CFTC proposed two possible Receivers and an attorney representing one of the investors proposed two other candidates. We are awaiting a ruling from the Court.
March 6, 2009: Judge DeGiusti entered a Preliminary Injunction in this case which enjoins the defendants from further violations of the Commodity Exchange Act, continues the asset freeze indefinitely, requires the defendant to account for all customer funds, and prohibits the defendants from trading commodity accounts on their own behalf or on the behalf of others. The banks and other financial institutions have been responding to our subpoenas; consequently, the auditors are making progress on their accounting. Finally, the CFTC staff is unable to give the Phidippides investors tax advice. You should contact either a tax professional or the IRS for advice regarding the tax consequences of this lawsuit.
February 10, 2009: The Honorable Timothy DeGiusti entered an order freezing all of the defendants’ assets pending a further hearing, now scheduled for March 6. This order includes all assets in the name of or under the control of the defendants. The order does not adjudicate whether the defendants are liable for violating the federal commodity laws as alleged.
As a result of this order, at least $15 million in funds on deposit in various financial institutions have been frozen. This includes four trading accounts carried at MF Global, Inc.: Phidippides Capital LP with a value of approximately $7.5 million; Phidippides Capital Management LLC with a value of approximately $5.8 million; and two accounts in the name of Mark Trimble with a collective value of approximately $900,000. In addition, certain bank accounts have been frozen with a collective value of approximately $1.5 million. All other assets of the defendants are also covered by the order and their value has not been determined.
The CFTC audit referred to in the complaint is not complete. CFTC auditors are seeking to identify all cash flows into and out of any financial accounts under Mr. Trimble’s control as well as the performance of any trading accounts under Mr. Trimble’s control. This is a time-consuming process that, among other things, requires collecting documents from third-party sources. Until the cash flows and balances have been analyzed, it is impossible to accurately determine the amount of investor losses or the amount of potential return to the participants.
Generally speaking, during the course of discovery, the CFTC will be seeking to identify all the participants in the Phidippides fund; the dollar amounts invested by each participant; the dollar amounts disbursed to each participant; the trading performance of all futures and equity accounts controlled by Mr. Trimble; funds received by Mr. Trimble while managing the trading accounts; any other disbursements; and to identify assets under ownership or control of Mr. Trimble.
In the event that the CFTC prevails, the CFTC will seek to ensure that the Phidippides fund is wound down and disbursed in a fair manner to the fund participants and other creditors. Please note that no distributions will be made absent a court order after notice to all participants and an opportunity is given to all to object or to present their unique circumstances. In addition, please know that it is the CFTC’s practice to defer collection of any civil penalty until after all investors have been made whole.
Finally, in order to conserve staff resources, we would appreciate it if any inquiries would be sent to the staff via email at [email protected] or [email protected] rather than by communicating by telephone. Participants can send copies of documents evidencing their deposits and withdrawals to the Commission’s Chicago Regional Office located at Suite 1100-N, 525 W. Monroe St, Chicago, IL 60661. Please identify yourself clearly as an investor in Phidippides Capital LP.
February 9, 2009: The Commission filed an injunctive complaint charging the defendants, Mark S. Trimble and Phidippides Capital Management LLC with fraudulently operating a $34 million hedge fund in the name of Phidippides Capital LP. Since at least October 2007, Trimble and PCM allegedly issued false account statements, failed to disclose the fund’s actual losses and operated the fund as a Ponzi scheme by paying participant redemptions based upon the fund’s fabricated profitability. Additionally, the complaint charged that Trimble received more than $1 million in management fees that he was not entitled to based upon the falsely reported profits.
The CFTC has also filed a Motion seeking the entry of a consent restraining order to freeze all of the assets in the name of or under the control of the defendants. CFTC staff is continuing to audit the pool’s records.
Related Documents:
Last Updated: March 23, 2011
- Defense Response to Motion for Rule to Show Cause, May 15, 2009
- CFTC Motion for Rule to Show Cause, May 8, 2009
- CFTC Memo in Support of Motion for Rule to Show Cause, May 8, 2009
- CFTC Motion to Recover Frozen Assets, April 24, 2009, Attachment 1, Attachment 2
- Order Appointing Temporary Equity Receiver, April 21, 2009.
- Memo in Support of Plaintiff's Motion for the Appointment of a Receiver, Exhibit 1, March 11, 2009
- Plaintiff's Agreed Motion for the Appointment of a Receiver, Exhibit 1, Exhibit 2, March 11, 2009
- Declaration by Mark Bloom, March 11, 2009
- Preliminary Injuncton, March 6, 2009
- Complaint, Exhibit 1, Exhibit 2, Exhibit 3, Exhibit 4, Exhibit 5, February 9, 2009
- Consent Restraining Order, February 10, 2009