CFTC Wins Judgment Against Commodity Pool Blue Guru
Today, The Commodity Futures Trading Commission (CFTC) announced today that Defendant Mark R. Slobodnik, operating as Blue Guru, LLC, was ordered to pay approximately $370,000 in fines in connection with a $1.76 million commodity pool fraud.
The Order stems from a CFTC Complaint alleging that Slobodnik, a former member of the Chicago Mercantile Exchange (CME), and co-defendants Richard D. Carter and Blue Guru, LLC with fraud, misappropriation and failing to register with the CFTC. The Order finds that from April 2014 to the filing of the Complaint, Slobodnik willfully misrepresented material facts to participants and prospective participants of Blue Guru concerning the profits they were making on their participation interests in the commodity pool. Among the misrepresentations, Slobodnik told prospective and actual participants that Blue Guru would use their money to trade futures, including the Dow Jones E-mini and the S&P 500 E-mini contracts on the CME, when, in fact, the defendants used less than two-thirds of the $1.76 million they solicited and received for trading. According to the Order, Slobodnik informed prospective participants that they would earn 8 percent per year on their investment plus 50 percent of any gross net trading profits, and was present or aware of communications advising participants that their funds were earning consistent trading profits, when in fact, much of the trades were negative.
As with any CPO, representations to your customers are highly scrutinized and must be accurate. If you have questions regarding representations as a CPO or other registered entity, seek competent counsel.
About Kennyhertz Perry’s Commodities, Futures, and Derivatives Practice Group
Kennyhertz Perry advises clients on a wide range of commodities and derivatives regulatory matters. Kennyhertz Perry has experience in all types of derivative transactions and design structures to meet clients’ specific trading, financial and/or credit needs. The roots of the practice are in the commodities markets, where Kennyhertz Perry partner Braden Perry spent time as a Senior Trial Attorney with the Commodity Futures Trading Commission. Our lawyers regularly advise our clients on compliance with the complex laws and regulations governing the securities and derivatives industries, including the Commodity Futures Modernization Act of 2000, the Commodity Exchange Act, the Gramm-Leach-Bliley Act, the Securities Acts of 1933 and 1934, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the SEC and CFTC regulations, the rules of the various derivatives exchanges and clearinghouses and other industry self-regulatory organizations and the “Blue Sky” state securities laws. Keeping abreast of regulatory developments is imperative, and enables our lawyers to guide clients on comment-making about proposed legislation and regulation, provide ongoing operational and compliance counseling, and offer advice on appropriate modifications of transaction structure and documentation.
Clients also benefit from Kennyhertz Perry’s experience in related areas of law, such as litigation, banking, securities, insurance, and its regular practice before the Commodity Futures Trading Commission. Leaders in the financial industry choose Kennyhertz Perry because the firm’s lawyers tailor their advice to the unique issues presented by each matter they handle.
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