Commodity Pool Operator (CPO) and Commodity Trading Advisor (CTA) AlphaMetrix is to pay USD5.6 million in restitution and penalties to settle US Commodity Futures Trading Commission (CFTC) charges.
A court order requires AlphaMetrix to pay restitution of USD2.8 million and a civil monetary penalty of USD2.8 million and requires parent company AlphaMetrix Group to pay disgorgement of USD2.8 million. The Order also prohibits AlphaMetrix from further violating anti-fraud provisions of the Commodity Exchange Act (CEA), as charged.
The Order stems from CFTC charges that AlphaMetrix failed to pay at least USD2.8 million in rebates owed to some of its commodity pool participants by investing the rebate funds in the pools and instead transferred the funds to its parent company, which had no entitlement to the funds. Nevertheless, AlphaMetrix sent these pool participants account statements that included the rebate funds as if they had been reinvested in the pools, even though they were not.
A civil action filed by the court-appointed receiver (see Deborah Thorne, not individually but as Court-Appointed Receiver of AlphaMetrix, LLC and AlphaMetrix Group, LLC v. Kins et al, Case No 14-2472) remains pending in the U.S. District Court for the Northern District of Illinois. In that action, the receiver seeks to recover funds from former officers of AlphaMetrix and AlphaMetrix Group.
The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
CFTC Division of Enforcement staff members responsible for this action are Stephanie Reinhart, David Terrell, Joseph Patrick, Scott Williamson, and Rosemary Hollinger. The Division thanks the CFTC’s Division of Swaps and Intermediary Oversight and the National Futures Association for their assistance in this matter.
