The US Commodity Futures Trading Commission (CFTC) has filed a complaint against AlphaMetrix, a Chicago-based commodity pool operator and commodity trading advisor.
The complaint alleges that AlphaMetrix misappropriated funds belonging to commodity pools it operated and sent false or misleading account statements to at least some of the pool participants.
On 5 November 2013, 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.
According to the CFTC complaint, AlphaMetrix operates approximately 90 pools that had approximately USD700m in assets under management as of 31 August 2013. The complaint alleges that AlphaMetrix had agreements with some participants in which AlphaMetrix agreed to rebate certain fees by reinvesting the funds in the pools for the participants. However, as alleged, between at least 1 January and 31 October 2013, AlphaMetrix failed to reinvest at least USD2.8m of the rebates owed to participants and instead transferred the funds to its parent company, AlphaMetrix Group, which had no legitimate claim to those funds and is named as a relief defendant in the complaint. The complaint states that AlphaMetrix nevertheless sent the participants account statements, which included the funds that were supposed to have been invested in calculating the net asset value of their interests, and, as a result, misstated to participants the true value of their investments.
In its continuing litigation, the CFTC seeks preliminary and permanent injunctions against AlphaMetrix, enjoining AlphaMetrix from committing further violations of the Commodity Exchange Act, as charged, and ordering it to pay restitution, disgorgement, and a civil monetary penalty, among other appropriate relief. The CFTC also seeks an order requiring AlphaMetrix Group to disgorge funds it received as a result of AlphaMetrix’s unlawful conduct.