Category Archives: CFTC News

CFTC Files Lawsuit Against Commodity Pool Operator AlphaMetrix, LLC

On November 4, 2013, the U.S. Commodity Futures Trading Commission (CFTC) filed a fraud lawsuit against Chicago-based AlphaMetrix, LLC.  AlphaMetrix is registered with the CFTC and with the National Futures Association as a commodity pool operator, commodity trading advisor, swap firm, and forex firm.

The complaint, filed in the U.S. District Court for the Northern District of Illinois, alleges that AlphaMetrix misappropriated funds from commodity pools the firm operated and misled some of its pool participants. A federal district judge issued a restraining order on AlphaMetrix’s assets soon after the complaint was filed.

AlphaMetrix appears to have told some of its clients that it would reinvest their funds for them, but instead transferred approximately $2.8 million of those funds to its parent company, AlphaMetrix Group, LLC.  The parent company had no legitimate entitlement to the $2.8 million it received between January 1 and October 31, 2013.

The firm issued statements to its clients that reflected increases in their net asset values as if the funds had been invested properly.  If the CFTC’s allegations prove to be true, the transfers of funds to the parent company and the misreporting of customer NAVs would constitute violations of the Commodity Exchange Act.

Earlier in October, the president and CEO of AlphaMetrix Group hinted at the problem in a letter in which he admitted that the firm was facing “significant cash flow issues” and was delaying fee rebates owed to some of its clients.

Blau & Malmfeldt is a law firm that represents investors across the United States in securities, commodity futures, partnership and shareholder rights disputes.  Contact us at 312-443-1600 to learn about the services we offer.

Commodity Futures Broker Vision Financial Markets, LLC Fined Twice in September 2013

The Commodity Futures Trading Commission (CFTC) fined Vision Financial Markets, LLC (Vision) twice in September 2013.  Vision is registered with the CFTC and with the National Futures Association (NFA) as a Futures Commission Merchant (FCM).

The Stamford, Connecticut-based firm was first charged for “failing to diligently supervise its employees” who improperly handled a customer’s interest accounts. The CTFC claimed that employees used a faulty software program that incorrectly calculated futures equivalent net positions, and that the employees failed to correct the mistake for approximately six months. The employees also did not use the proper delta when calculating the aggregate amount for the customer’s futures equivalent net positions, nor did they properly aggregate the customer’s multiple trading accounts when doing their calculations.

Every firm registered with the CFTC is required to supervise its employees and their business activities by “establishing, implementing, and executing an adequate supervisory structure and compliance programs.” Vision failed to do so, the CFTC said, violating the Commission’s rules.

Vision agreed to pay $140,000 to settle, but a less than a week later, the CFTC fined the firm again, claiming that Vision failed to segregate its customers’ funds and futures positions from August 2008 to June 2009. The firm used the futures and options customer funds to purchase securities, but failed to hold those securities in separate accounts for its customers – a violation of the Commodity Exchange Act.

The firm allegedly told its customers that their invested funds were being “deposited in segregated funds bank accounts,” even though the funds were actually being held in an internal account at Vision.

Vision did not properly segregate the securities until the NFA informed the firm that its customer funds were being held incorrectly. Vision then transferred the securities to a segregated account, although the firm was aware of the issue well before the NFA detected the problem.

On the charge relating to its failure to segregate customer funds and positions, Vision agreed to a $525,000 settlement.

It appears that the CFTC and the NFA have begun to take a more hands on approach to enforcing segregation rules in the wake of the Peregrine and MF Global blowups.

Blau & Malmfeldt is a law firm that represents investors across the United States in commodity futures, securities, partnership and shareholder rights disputes.