November 6, 2013

CFTC Obtains Restraining Order against Commodity Pool Operator and Commodity Trading Advisor, AlphaMetrix, LLC, Alleging Misappropriation of Pool Funds and Sending False or Misleading Statements

CFTC Complaint Also Names AlphaMetrix’s Parent Company, AlphaMetrix Group, LLC, as Relief Defendant

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that it filed a Complaint in the U.S. District Court for the Northern District of Illinois on November 4, 2013, against AlphaMetrix, LLC (AlphaMetrix), a Chicago-based Commodity Pool Operator (CPO) and Commodity Trading Advisor (CTA). 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 November 5, 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 $700 million in assets under management as of August 31, 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 January 1 and October 31, 2013, AlphaMetrix failed to reinvest at least $2.8 million of the rebates owed to participants and instead transferred the funds to its parent company, AlphaMetrix Group, LLC, 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, LLC, to disgorge funds it received as a result of AlphaMetrix’s unlawful conduct.

CFTC Division of Enforcement staff members responsible for this case 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.

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Last Updated: November 6, 2013