CFTC Obtains Restraining Order against CPO and CTA for Misappropriating Pool Funds and Sending False or Misleading Statements

The CFTC filed a Complaint against AlphaMetrix, LLC ("AlphaMetrix"), a Chicago-based CPO and CTA, for misappropriating funds belonging to commodity pools it operated and sending false or misleading account statements to at least some of the pool participants. According to the Complaint, AlphaMetrix had agreements with some participants to rebate certain fees by reinvesting the funds in the pools for the participants. However, the CFTC alleged that between at least January 1 and October 31, 2013, AlphaMetrix failed to reinvest at least $2.8 million of the rebates owed to participants and instead transferred the funds to its parent company. The Complaint states that AlphaMetrix nevertheless sent the participants' account statements and as a result misstated to participants the true value of their investments.

In light of the Complaint, Federal District Judge Joan H. Lefkow issued a consent restraining Order that freezes AlphaMetrix's assets, protects books and records, and appoints a corporate monitor to oversee the distribution of pool funds to participants.

See: CFTC Complaint; Order: AlphaMetrix; CFTC Press Release.See also: Lofchie's Guide to CPO/CTA Regulation.Related news: NFA Notice of Member Responsibility Action to AlphaMetrix LLC (October 22, 2013).