For Release: July 5, 2007
Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on July 3, 2007, it filed a contempt of court Motion against Lake Shore Asset Management Limited (LAM) for rule to show cause why LAM should not be held in contempt of court for violating the Statutory Ex Parte Restraining Order (SRO) entered on June 27, 2007, by Judge Blanche M. Manning, of the United States District Court for the Northern District of Illinois. (See CFTC News Release 5349-07, June 28, 2007.)
Specifically, the CFTC’s Motion alleges that LAM has neither allowed CFTC staff to inspect and copy its books and records, nor has it produced the requested documents to the CFTC, as mandated by the court’s order.
In particular, the defendant LAM has not provided the CFTC with a list of all accounts under management, account opening documents for those accounts, monthly statements for each account, copies of all correspondence between the defendant and each account holder, and all Disclosure Documents and Offering Memoranda for funds under its management.
The CFTC’s Motion also alleges that while the asset freeze previously entered by the court on June 27, 2007, appears to have frozen approximately $238 million on deposit with futures commission merchants (FCMs), the CFTC cannot determine whether or not all customer funds are accounted for because the CFTC does not have access to customer records. The CFTC’s Motion further alleges that LAM continues to hide behind unspecified Swiss “bank secrecy” laws and has only produced minimal and selective documents to CFTC staff.
Because LAM is a registered commodity trading advisor (CTA) and commodity pool operator (CPO), the CFTC alleges it is entitled to inspect all of LAM’s books and records, not simply selected documents that LAM believes are responsive to the SRO.
The matter is set for a status hearing on July 11, 2007, before Judge Manning.
Last Updated: July 6, 2007