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 order, issued September 5, 2017, also demands W Resources 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 to oil and gas assets. However, beginning in October 2013, the firm operated these funds without registering with the CFTC as a CPO, a direct violation of federal regulations.
Furthermore, W Resources failed to file a notice of exemption with the National Futures Association (NFA) or seek any form of relief from the CFTC, compounding the regulatory breaches. The CFTC order stipulates that W Resources must maintain existing commodity positions until they either register with the CFTC, properly notify the NFA of an applicable exemption, or obtain no-action relief from the agency.
This effectively bars W Resources from entering into new commodity interest transactions until it achieves full compliance with federal regulations. The case was led by CFTC Division of Enforcement staff members David W. Oakland, Steven Ringer, Lenel Hickson, and Manal Sultan.
The $150,000 civil monetary penalty underscores the CFTC’s commitment to ensuring all commodity pool operators adhere to registration requirements, protecting investors and maintaining market integrity.
Source: CFTC.gov
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