September 30, 2013
CFTC Charges TOTE Fund LLC, MJS Capital Management LLC and their Principal, Michael J. Siegel with Commodity Pool Fraud
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that it filed a civil enforcement action in the U.S. District Court for the District of New Jersey, charging two California firms, TOTE Fund LLC (TOTE) and MJS Capital Management LLC (MJS), and their principal, Michael J. Siegel of Northfield, New Jersey, with misappropriating funds in connection with two commodity pools.
The CFTC’s Complaint, filed on September 27, 2013, alleges that, from August 2007 through at least October 2010, TOTE, MJS, and Siegel, operated two commodity pools, the Monarch Futures Fund LLC (Monarch) and the QEP Futures Fund LLC (QEP). Pool participants placed approximately $1.375 million in the QEP and Monarch pools.
The Complaint further alleges that, from at least January 2008 through at least October 2010, the Defendants misappropriated funds totaling approximately $191,689 from Monarch and QEP pool participants by withdrawing money from the pools for non-pool expenses and taking fees to which they were not entitled. As alleged in the Complaint, despite earning incentive, management, and administrative fees of approximately $319,909 based on his trading for Monarch and QEP, Siegel transferred approximately $511,598 from bank accounts in the names of Monarch, QEP, and TOTE to his personal bank accounts, to a credit card account, and to at least one individual. Siegel used some of these funds to pay personal expenses, according to the Complaint, and MJS and Siegel also misappropriated funds by failing to return funds to at least two pool participants who sought to withdraw their funds from QEP.
As further alleged, TOTE, acting through Siegel, also failed to provide Monarch pool participants with copies of monthly statements received by TOTE from Futures Commission Merchants, as required by CFTC Regulation.
In its continuing litigation, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans, and permanent injunctions against further violations of the Commodity Exchange Act.
CFTC Division of Enforcement staff members responsible for this case are Kara Mucha, James Garcia, Michael Solinsky, Gretchen L. Lowe, and Vincent A. McGonagle.
Last Updated: September 30, 2013