Commodity Futures Trading Commission
Office of External Affairs (202) 418-5080
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581

Release: 5149-05
For Release: December 22, 2005


CFTC Finds that Veras, Along with Owners and Managing Members James McBride and Kevin Larson, Failed to Disclose Illegal and Deceptive Trading Practices to Pool Participants

Order Imposes $500,000 Penalty on Veras, McBride, and Larson, and Revokes Their Registrations

WASHINGTON, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today the issuance of an order filing and settling an enforcement action against Veras Investment Partners, LLC (Veras), a registered commodity pool operator and commodity trading advisor in Sugar Land, Texas, and James McBride and Kevin Larson, managing members who were registered with the CFTC as agents of Veras.

According to the CFTC’s order, Veras operated two primary commodity pools as hedge funds that traded commodity futures contracts and securities. The CFTC’s order finds that Veras, McBride, and Larson each failed to disclose to commodity pool participants certain deceptive and illegal market timing and late trading practices that Veras used to execute its securities trading strategies.

The order finds that Veras used deceptive techniques to engage in market timing in mutual funds that previously had detected and restricted, or that otherwise would not have permitted, Veras’s market timing. As also set forth in the order, Veras and its managing members engaged in “late trading,” thereby obtaining a trading advantage not available to all investors. According to the order, these practices violated federal securities laws.

The order further finds that Veras did not disclose to commodity pool participants that Veras would engage in such violative market timing and late trading practices. The order concludes that the failure to disclose such information operated as a fraud or deceit on commodity pool participants in violation of the Commodity Exchange Act (CEA), which prohibits fraud by commodity pool operators and its associated persons.

Without admitting or denying the findings in the order, respondents consented to the entry of the order, which requires respondents to cease and desist from further violations of the Act that are alleged; orders them, jointly and severally, to pay a civil monetary penalty of $500,000; revokes respondents’ registrations; and bans McBride and Larson from trading commodity futures and options for others, and from seeking registration, claiming exemption from registration, or acting in any capacity requiring registration or exemption from registration (with limited exceptions) for a period of 18 months.

The Securities and Exchange Commission and the New York Attorney General’s Office filed and settled related actions against Veras, McBride, Larson and others today. A copy of the CFTC order may be found at

The following Division of Enforcement staff members were responsible for this case: James Holl, III, Erin Vespe, Gretchen Lowe and Vincent McGonagle.

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The CFTC encourages members of the public to bring to our attention any suspicious activities involving futures or commodity options, including matters involving foreign currency (forex) investments or suspicious Internet websites.

You may contact the CFTC at 1-866-FON-CFTC (1-866-366-2382), visit us at our Customer Protection web page: (, or fill out our Internet Report Form identifying your concerns (

In addition, the CFTC publishes a series of Consumer Advisories at alerting the public to warning signs of possible fraudulent activity and offering precautions individuals should take before committing funds.

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Media Contacts
Alan Sobba
(202) 418-5080
Dennis Holden
(202) 418-5088
Office of External Affairs

SEC Media Contact
John Nester
(202) 551-4125

Related Document
CFTC Order