For Release: July 31, 2007
U.S. Commodity Futures Trading Commission Sanctions Merrill Lynch Investment Managers, LLC and Merrill Lynch Alternative Investments, LLC for Repeated Failure to File Annual Reports on Time for Many of the Commodity Pools they Operate
CFTC Order Requires the Commodity Pool Operators to Pay a Civil Monetary Penalty of $500,000
Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today the issuance of an order filing and simultaneously settling charges against Merrill Lynch Investment Managers, LLC (MLIM) and Merrill Lynch Alternative Investments, LLC (MLAI), both of Plainsboro, New Jersey. MLIM and MLAI have been registered as commodity pool operators (CPOs) since November 3, 1999 and October 10, 1986, respectively.
The CFTC order finds that, beginning in 2001 and continuing through at least 2005, MLIM and MLAI repeatedly failed to distribute to pool participants and file with the National Futures Association (NFA) their commodity pools’ annual reports in a timely manner, in violation of a CFTC regulation.
The furnishing of the 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 order.
The order requires MLIM and MLAI to, among other things, pay a civil monetary penalty of $500,000.
The following CFTC Division of Enforcement staff are responsible for this case: Matthew Elkan, Kathleen Banar, Richard Glaser, and Richard Wagner.
Last Updated: July 31, 2007