Tag Archives: Commodity Pool Operator

CPO Annual Report Guidance

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CFTC Release Provides Guidance on Annual Report Requirements

CFTC Rule 4.22(c) requires commodity pool operators to provide each investor in the commodity pool with certain information on an annual basis.  These Annual Reports must be provided to investors (generally in hard copy) within 90 days of the end of the CPO’s fiscal year (generally the calendar year).  These Annual Reports must also be filed with the NFA within 90 days of the end of the CPO’s fiscal year.  Because of the technical nature of the Annual Report requirement, the CFTC has released a reminder which provides information on a variety of technical aspects of the Rule.  Continue reading →

Commodity Hedge Fund Reminder

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CPOs Reminded to Always File Timely Reports

The following release details the CFTC sanctions against four commodity pool operators (CPOs) for failure to make timely filings with the NFA.  The CPOs failed to make filings of the respective commodity pool annual report.  This report must be provided to all pool participants (investors) and must also be filed with the NFA.  In certain circumstances the NFA will provide extensions to CPOs.  We also note that the filing requirement applies to those CPOs who run hedge fund of funds which are also commodity pools.  Continue reading →

Another Commodity Pool Operator Fraud – Lesson in Hedge Fund Due Diligence

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We frequently discuss scams involving the investment management and hedge fund industry as a warning to potential hedge fund investors to take the hedge fund due diligence process seriously.  In the CFTC release posted below, we have a classic scam where the sponsors of a commodity/futures fund acted in a fraudulent manner and used the assets of the fund for their own personal reasons.  We have listed the items which the consent order found and how an experienced hedge fund due diligence team could have protected the investor from fraud. Continue reading →

Hedge Fund Strategy – Energy Focused Hedge Funds

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We have previously provided an overview of hedge fund trading strategies.  While we mentioned the major trading strategies, we did not mention some of the more niche trading strategies like energy focused hedge funds.  Energy focused hedge funds can utilize a number of different trading strategies from investing only in energy related companies to investing only in energy commodities (commodity pools). Like many of the different strategies, the structure of energy hedge funds will depend on a number of factors including the instruments traded and the expected lifespan of the investments.  Additionally, if the energy hedge fund does trade in commodities, the manager may need to be registered as a CPO.  Continue reading →

Fraudulent Commodity Pool Operator Issued Injunction

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A commodity pool operator is issued an injunction for fraudulent behavior.  In classic fashion, this fraudster touted performance results which were grossly inaccurate.  The scheme ended earlier this year and investors lost almost $6 million dollars.  As we’ve noted before, hedge fund investors (including those investors in commodity and futures hedge funds) need to make sure to complete due diligence on the hedge fund and hedge fund manager.  The release below details the events and injunction.  Continue reading →