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 an order on September 5, 2017, compelling W Resources to cease and desist from further violations of the Commodity Exchange Act (CEA).
The investigation revealed 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) – trading commodity options to mitigate financial risk associated with physical oil and gas assets. Starting in approximately October 2013, the company operated these funds without registering with the CFTC as a CPO, a direct violation of CEA registration requirements.
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 breach. The CFTC order mandates that W Resources maintain any existing commodity positions until their expiration.
Crucially, the company is prohibited from entering into any new commodity interest transactions until it either registers with the CFTC, successfully claims an applicable exemption from registration with the NFA, or receives a no-action relief determination from the CFTC. This effectively halts W Resources’ activity in commodity pools until full 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 penalty underscores the CFTC’s commitment to enforcing registration requirements for CPOs and protecting the integrity of commodity markets.
Source: CFTC.gov
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