In response to a CFTC civil suit against AlphaMetrix alleging fraud, the firm issued a statement denying the charges alleged in the suit and re-iterated it is fully cooperating to properly liquidate funds on the its managed accounts platform.
The statement reads:
On November 5, 2013, the Federal Court in Chicago entered a Consent Statutory Restraining Order sought by the CFTC. AlphaMetrix agreed to the entry of the Order because it is consistent with its efforts to liquidate and return the funds. AlphaMetrix denies the allegations that it violated the Commodity Exchange Act as alleged in the complaint filed by the CFTC.
The Order appointed a Corporate Monitor for all commodity pools operated by AlphaMetrix. The Corporate Monitor is directed and authorized to ensure that at least 95% of pool participant funds are retuned to participants by no later than fifteen (15) days from the entry of the Order. AlphaMetrix will cooperate with the Corporate Monitor.
It is anticipated that additional pool participant funds will be released once tax, audit and other such service fees are estimated and accrued for as directed by the funds offering memorandum. AlphaMetrix is currently communicating with Deloitte to engage them to complete final audits. Deloitte has audited funds for AlphaMetrix since 2008.
The CFTC filed a lawsuit against AlphaMetrix, the embattled alternative investment account platform services provider, on . The suit claims that AlphaMetrix misappropriated $2.8 million claimed for its own use funds from CTA fees it had promised investors to be re-invested. Perhaps most ominous, the CFTC accused AlphaMetrix of distributing false and misleading account statements to conceal fraud and said they took the actions to prevent further violations of the Commodity Exchange Act. After the firm stated they would engage in an “orderly distribution” of investor assets, the firm had plans to continue certain business operations including the popular conference series and the fund administration business, according to a firm source. The case is U.S. Commodity Futures Trading Commission v. AlphaMetrix LLC, U.S. District Court, Northern District of Illinois, No. 13-07896.
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