For Release: February 14, 2008
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that LJH Global Investments, LLC (LJH) will pay a $125,000 civil monetary penalty to settle charges that it failed to file annual reports on time for commodity pools it operates, as required by CFTC regulations. LJH is a registered commodity pool operator (CPO) based in Naples, Florida.
The CFTC order finds that LJH is a CPO for commodity pools that operate as funds-of-funds. LJH claimed exemptions from annual reporting requirements for these pools because it claimed that it offered or sold participations in the pools solely to qualified eligible persons. However, according to the order, a CPO for exempt pools must file the pools’ annual reports with the National Futures Association (NFA) and distribute the reports to pool participants either 90 days or, if the CPO receives an extension, 150 days after the end of the pools’ fiscal year.
Specifically, the order finds that, between fiscal years 2002 and 2005 (ending December 31), LJH failed to file and distribute the required annual reports for certain pools in a timely manner. The CFTC order further finds that, in two of its pools’ annual reports, LJH failed to provide appropriate footnote disclosure and failed to present and compute those reports in accordance with generally accepted accounting principles.
An annual report is designed to “provide [pool] participants with the information necessary to assess the overall trading performance and financial condition of the pool.” (See Commodity Pool Operators and Commodity Trading Advisors; Final Rules, 44 Fed. Reg. 1918 [CFTC Jan. 8, 1979] (announcing the adoption of Rule 4.22.) Without timely reporting, the CFTC’s goal of providing pool participants with complete and necessary data is hampered, according to the CFTC order.
The following CFTC Division of Enforcement staff members are responsible for this matter: Glenn I. Chernigoff, Gretchen L. Lowe, and Vincent A. McGonagle.
Last Updated: February 14, 2008