The National Futures Association ("NFA") charged a commodity trading advisor and pool operator ("CPO") for violations concerning the commingling and holding of pool assets in order to avoid certain membership fees.
According to the Complaint, the CPO Archimedes Fund Management LLC ("AFM") (i) "commingl[ed] [p]ool assets with its principal personal assets" and (ii) failed to hold pool assets in an account under the name of the pool. The NFA launched an investigation into AFM after it discovered a receivable balance of $2,064,492 from AFM's owner and sole employee, Michael Caponiti, to the pool. Mr. Caponiti later informed the NFA that he had entered into a nominee agreement so that his reduced membership fee rate with New York Mercantile Exchange ("NYME") would also apply to the Pool. This agreement would also allow the Pool to avoid NFA assessment fees on trades. When the NFA notified Mr. Caponiti that his actions violated CFTC and NFA regulations and rules, he ended the nominee agreement and returned pool assets to accounts under the name of the pool.
Mr. Caponiti repaid (i) $18,000 owed to the NYME from his personal account, and (ii) $1,238 owed to the NFA from the pool. The NFA concluded that Mr. Caponiti did not misappropriate any pool funds.
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