Monthly Archives: February 2014

CFTC Reaches Settlement with Worth Asset Management, LLC

The U.S. Commodity Futures Trading Commission (CFTC) recently settled administrative claims against West Palm Beach, Florida’s Worth Asset Management LLC (Worth Asset) and its sole owner and manager, Paul L. Kaulesar of Royal Palm Beach.

According to the CFTC, Worth Asset and Kaulesar solicited retail customers by telephone to make investments in gold, silver, and platinum.   During these conversations, Worth Asset and Kaulesar made false representations concerning their past performances.  Instead of actually making investments on the customers’ behalf, Worth Asset and Kaulesar transferred the funds to their own account.  In total, Worth Asset and Kauselar misappropriated over $4.6 million.

The settlement agreement requires Worth Asset and Kaulesar to pay a $1,565,000 in fines and$4,696,640 in restitution to their customers. They have also received permanent trading and registration bans.

Kaulesar and Worth Asset were never registered with the CFTC or with the National Futures Association.  However, the CFTC determined that it had jurisdiction over them because they made false statements in connection with their solicitation of customers to purchase physical commodity contracts.

Blau & Malmfeldt invites victims of Worth Asset to contact us at 312-443-1600 for a complimentary case evaluation.  Blau & Malmfeldt is a law firm that represents investors across the United States in securities, commodity futures, partnership and shareholder rights disputes.

NFA Expels Member Firm Level III Management, LLC

The National Futures Association recently announced its termination of Metairie, Louisiana commodity pool operator and commodity trading advisor Level III Management LLC from NFA membership.  NFA has also ordered Level III Management’s principal and associated person Bruce Gwyn to withdraw from membership for a period of at least seven years.

According to NFA, 24 investors contributed approximately $1.7 million to Level III Trading Partners LP, a commodity pool managed by Level III Management.  During NFA’s unannounced examination of Level III Management in June 2012, NFA discovered that the Level III Pool had only $200,000 in assets.  NFA determined that Gwyn had siphoned more than $240,000 from the pool’s accounts to pay personal expenses.

In addition, NFA determined that Level III Management had caused the Level III Pool to invest in penny stocks in companies with connections to Gwyn.  NFA also determined that Level III Management and Gwyn had provided misleading information to pool investors.

NFA concluded that Level III Management had failed to  “observe high standards of commercial honor and just and equitable principles of trade and ailing to cooperate with NFA” in violation of NFA’s general conduct rule.

Blau & Malmfeldt invites Level III Pool customers to contact us at 312-443-1600 for a complimentary case evaluation.  Blau & Malmfeldt is a law firm that represents investors across the United States in securities, commodity futures, partnership and shareholder rights disputes.

 

NFA Takes Emergency Action against Commodity Pool Operator Newport Private Capital, LLC

The National Futures Association (NFA) recently ordered Newport Private Capital, LLC, a commodity pool operator and commodity trading adviser and its former principals, Jonathan M. Hansen and David M. Giunta, to cease from entering new positions in commodity futures markets.

Newport Private Capital’s troubles stem from a $4 million loan that it caused one of its commodity pools, the Financial Futures Fund, to make to another entity controlled by Hansen and Giunta.  According to the NFA, the entity receiving the loan, the SURE Fund, was involved in real estate investing, and the loan was made via a promissory note that the Financial Futures Fund received in exchange for making the loan.  The SURE Fund defaulted on the promissory note in 2012.

NFA Compliance Rule 2-45 prohibits commodity pool operators from taking loans from commodity pools or from causing commodity pools to make loans to their affiliates.  NFA enacted this rule in 2009 after determining that another commodity pool operator had defrauded one of its commodity pools by causing it to loan money to its introducing broker.

In September 2013, NFA entered an emergency enforcement action charging Newport Private Capital, Hansen, and Giunta with violations of NFA Compliance Rule 2-45.  NFA ordered Respondents Hansen and Giunta to pay back the entire amount due on the note by January 2014.  NFA took subsequent action against them when they failed to comply with NFA’s order.

While NFA has put Newport Private Capital out of business, it has not recovered money on behalf of the Financial Futures Fund.  It is possible that a private law firm taking an aggressive approach to collection might have more success.

Blau & Malmfeldt invites investors in the Financial Futures Fund to contact our law firm to discuss recovery.  Blau & Malmfeldt is a law firm that represents investors across the United States in securities, commodity futures, partnership and shareholder rights disputes.