Chicago, IL – June 28, 2007 – Laurence Rosenberg, former Chairman of the Chicago Mercantile Exchange and Director of Lake Shore Asset Management Limited (LAM), faces charges of recordkeeping fraud and providing inconsistent statements to regulators, the Commodity Futures Trading Commission (CFTC) announced today.
On June 26, 2007, the U.S. District Court for the Northern District of Illinois issued an ex parte statutory restraining order freezing the assets of LAM, a Bermuda-based company with a Chicago office. The order also prohibits the company from altering or disposing of its records and denies CFTC access. This action follows a complaint filed by the CFTC alleging violations of the Commodity Exchange Act and CFTC regulations.
According to the complaint, Rosenberg initially told the National Futures Association (NFA) that all of LAM’s business was conducted in Bermuda, with calls to the Bermuda office being forwarded to Toronto, Canada, where trading and recordkeeping allegedly occurred. However, the address provided for the Toronto office was found to be a mail drop, not a functioning business location.
Further investigation revealed significant discrepancies in the reported assets under management. On June 14, 2007, Rosenberg claimed LAM managed approximately 250 accounts with a total of $1 billion in assets. However, a subsequent inspection of LAM’s web pages by the NFA showed total assets of only $466,710,761.
The CFTC alleges that LAM refused to provide access to its books and records for inspection and was unable or unwilling to provide accurate information regarding pool participants and trading performance. Additionally, Rosenberg and other principals allegedly made inconsistent statements concerning assets, ownership, U.S. investors, and the location of company records.
The CFTC is seeking preliminary and permanent injunctions, civil monetary penalties, and other equitable relief. A status hearing is scheduled for July 11, 2007, and the statutory restraining order will remain in effect until that date. The case is CFTC v. Lake Shore Asset Management Limited, No. 07 C 3598 (N.D. Ill.).
Source: CFTC.gov
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