A federal judge on February 1st ordered Changes Trading and its co-owner Timothy Baggett to pay $498.6 million in restitution and civil penalties for defrauding customers through a sham commodity trading system. U.S. District Judge Dale A. Jenkins granted the Commodity Futures Trading Commission's motion for default judgment against Changes Trading and Baggett after he failed to appear in court.

The CFTC had filed its lawsuit last year against Changes Trading and its co-owners, Baggett and Kimball Parker. While Parker entered into ongoing negotiations with the CFTC, Baggett never responded to the legal proceedings. The CFTC filed for an entry of default against Changes Trading and Baggett in November, which the court approved in December.

Judge Jenkins determined that Changes Trading and Baggett received proper service of the legal documents. Based on the evidence submitted, the court accepted the CFTC's allegations as true. These allegations detailed how Baggett's websites, eBooks, and presentations contained numerous false statements and omissions. He designed these materials to trick customers into believing the Changes Trading system offered a profitable and effective way to trade futures.

Baggett repeatedly claimed his "documented and verifiable results" proved the system's success. These results, however, did not reflect any actual trading of real money in any futures account. His websites promised users could "earn a full time income working just 2 hours a day."

This claim was false. During the CFTC's investigation, the defendants, including Baggett and Parker, admitted they knew of no one who had made a full-time income using the system. Most, if not all, customers who paid for and used the Changes Trading system ultimately lost money.

The court order further documented how Baggett and Parker misrepresented themselves as professional and profitable traders. They fabricated client testimonials on the Changes Trading website to bolster these false images. They also told customers that their "live training room" used real money in live trades, when it was merely a simulation.

Another major deception involved the advertised 90% success rate of the Changes Trading robot. The CFTC found this robot had "never been tested using real money," was considered "dangerous," and simply "didn't work."

In total, Changes Trading, Timothy Baggett, and Kimball Parker collectively scammed $498.6 million from their victims. This figure represents the full amount the court ordered Baggett and Changes Trading to repay in restitution. An additional $1.49 million civil penalty was also imposed.

Judge Jenkins issued a preliminary injunction against Changes Trading, Changes Worldwide, and Timothy Baggett. The order prohibits them from further defrauding the public. Baggett faces a specific ban from trading on any registered entity or entering into transactions involving commodity interests. He cannot have commodity interests traded on his behalf, nor can he directly or indirectly control any account involving them.

The ban also prevents Baggett from soliciting or accepting funds for purchasing or selling commodity interests. He is barred from applying for or claiming exemption from registration, or engaging in any activity that requires registration with the CFTC. Furthermore, he cannot act as a principal, agent, officer, or employee of any entity registered, exempt from registration, or required to be registered with the CFTC.

Post-judgment interest began accruing on February 1st. Recovered funds will be distributed to eligible Changes Trading victims by a court-appointed Monitor.