BRENTWOOD, TN – Hope Hope, principal of Hope Advisors LLC (HAL), has been penalized $100,000 by the U.S. Commodity Futures Trading Commission (CFTC) for operating a commodity pool without proper registration and for deficiencies in financial reporting to investors. The CFTC issued the order on April 15, 2015.
The investigation revealed that HAL operated Hope Investments LLC (HIL) as a commodity pool from March 2011 through January 23, 2013, without registering as a Commodity Pool Operator (CPO) with the CFTC. This failure to register violates the Commodity Exchange Act, which requires CPOs to meet specific financial and ethical standards, allowing the CFTC to oversee their activities.
Additionally, the CFTC found that HAL’s monthly statements to HIL participants were incomplete. These statements only displayed realized gains and losses, omitting unrealized gains and losses as required by CFTC Regulation 4.22(d). This regulation is designed to provide pool participants with a comprehensive view of the pool’s performance and financial health.
According to the CFTC, Hope Hope became aware of the registration requirement in August 2012 and subsequently began the registration process, achieving registration on January 24, 2013. Corrective measures were also taken regarding the monthly statements. A consultant was hired to create a compliant performance report, and, beginning in August 2013, HAL began issuing two reports monthly – one detailing realized gains/losses and another, compliant with CFTC regulations, showing both realized and unrealized gains and losses.
The CFTC stated that no customers suffered financial harm as a result of these omissions. The $100,000 civil monetary penalty serves as a reminder of the importance of adhering to registration requirements and providing accurate financial reporting in the commodity pool industry.
The case was led by CFTC staff members Diane M. Romaniuk, Ava M. Gould, Judith McCorkle, Scott R. Williamson, and Rosemary Hollinger, with assistance from the National Futures Association.
Source: CFTC.gov
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