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Felix Shipkevich October 28, 2011

The NFA has taken emergency action against Commodity Pool Operator (“CPO”) TS Capital Management. The Member Responsibility Action (“MRA”) has been issued because the Association believes it is necessary to protection participants in commodity pools and other investments controlled by TS Capital Management and the firm’s owner and CEO, David Stroud.

According to the MRA, TS Capital Management did not cooperate with auditors during an investigation of the firm. The CPO failed to produced books, records, and other information requested by the NFA. Furthermore, over the course of the audit the NFA learned that TS Capital Management is affiliated with several unregistered entities also run by Stroud. Stroud gave the auditors misleading information about transactions between the CPO and its unregistered affiliates. Consequently, the NFA has not been able to determine whether TS Capital Management has dealt properly with investors, if the CPO misused investor funds, and whether it gave false or misleading information to investors.

Under the MRA, TS Capital Management is prohibited from soliciting or accepting any money or investments for any pool or other investment vehicles over which the CPO or its principals exercise control. The CPO and its principals are also prohibited from placing any trades, or disbursing or transferring any participant, investor, or customer funds without prior NFA approval. The MRA will remain in effect until TS Capital Management can demonstrate it is in complete compliance with NFA regulations. The firm is entitled to a prompt hearing from the Association’s Hearing Committee.

Read more about this NFA enforcement action.
Creative Commons License photo credit: kevin dooley

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