Washington, D.C. – W Resources, LLC, a Dallas, Texas-based firm, has been ordered to pay a $150,000 penalty by the U.S. Commodity Futures Trading Commission (CFTC) for operating as an unregistered Commodity Pool Operator (CPO). The CFTC issued the order on September 5, 2017, and simultaneously directed the company to cease and desist from further violations of the Commodity Exchange Act (CEA).
The CFTC found that W Resources managed three commodity pools – W North Fund LLC, W North Fund II LLP, and W North Fund III LLP (collectively, the W North Funds) – by trading commodity options intended to hedge against financial risks associated with physical oil and gas assets. However, beginning in October 2013, the company failed to register with the CFTC as a CPO, a requirement under the CEA.
Further investigation revealed that W Resources also did not file a notice of exemption with the National Futures Association (NFA) nor sought any form of relief from the CFTC, compounding the violation. The CFTC order mandates that W Resources maintain any existing commodity positions until their expiration.
The company is prohibited from entering into any new commodity interest transactions until it either registers with the CFTC, successfully notifies the NFA of an applicable exemption, or obtains no-action relief from the agency. This effectively halts all trading activity until compliance is achieved.
The case was led by CFTC Division of Enforcement staff members David W. Oakland, Steven Ringer, Lenel Hickson, and Manal Sultan. The CFTC is committed to ensuring all market participants adhere to registration requirements, protecting investors and maintaining market integrity.
Media contact for this case is Dennis Holden at 202-418-5088.
Source: CFTC.gov
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