The NFA has issued an emergency action against Colorado-based Commodity Pool Operator (“CPO”) Denver Difference Energy, LCC, and the firm’s principal and Associated Person (“AP”) Mukeeze Muwanga. The NFA states that the CPO has failed to cooperate with an investigation into the firm’s finances.
According to the Member Responsibility Action (“MRA”)/Associate Responsibility Action (“ARA”), in April 2011 the CPO filed a financial statement showing the pool received $2,500 in limited partner funds. However, the statement was not accompanied by the required disclosure document, triggering an unscheduled NFA audit. When the audit began earlier this month, the NFA requested bank and trading records for Denver Difference’s pool. No account held more than $1000, and one had a negative balance. The MRA/ARA says that auditors knew at least one participant was still owed $3,000 by Muwanga and his CPO, which the AP had thus far failed to return.
The NFA alleges that the financial records showed suspicious withdrawals from company accounts and deposits into Muwanga’s personal bank account. When auditors demanded additional bank records, the AP ignored the request and filed to withdraw the CPO’s NFA membership. These actions lead the auditors to conclude that Muwanga had improperly handled client assets, and prompted this emergency action.
The MRA/ARA suspends Denver Difference and Muwanga from NFA membership, and prohibits them from disbursing or transferring any customer funds without approval. The actions will remain in effect until the members can prove that they are in compliance with all Association regulations. The CPO and AP may request a hearing to plead their case.