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.