Washington, D.C. – Dallas, Texas-based W Resources, LLC 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 mandated a 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 financial exposure related to physical oil and gas assets. Beginning in October 2013, the company operated these funds without registering with the CFTC as a CPO, a direct violation of federal regulations.
Furthermore, W Resources failed to file the required notice of exemption with the National Futures Association (NFA) or seek any form of relief from the CFTC regarding its registration status. This oversight constitutes a significant breach of regulatory compliance within the commodity trading industry.
As part of the agreement with the CFTC, W Resources is required to maintain existing commodity positions until their expiration dates. The company is prohibited from entering into any new commodity interest transactions until it either registers with the CFTC, demonstrates eligibility for an exemption, or receives a no-action letter from the commission.
The case was led by CFTC Division of Enforcement staff members David W. Oakland, Steven Ringer, Lenel Hickson, and Manal Sultan. The CFTC continues to prioritize the registration of CPOs to ensure transparency and protect investors in the commodity markets.
Source: CFTC.gov
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