Trading Advisers Accused of Pooling Accounts

     CHICAGO (CN) – A branch manager and her supervisor for a commodity trading firm misrepresented pooled accounts as “proprietary” when they were actually funded by third parties in Australia and elsewhere, the Commodity Futures Trading Commission claims in Federal Court. The pooled accounts allegedly contained more than $21 million.




     The CFTC says Grace E. Reisinger and her supervisor, Steven D. Erdman, prepared and submitted “false account opening documents” to Cadent Financial Services, a futures commission merchant, for each of the accounts they introduced.
     From March 10, 2006 to April 1, 2009, New World Holdings “failed to maintain books and records that are required to be maintained by the Commodity Exchange Act,” the lawsuit claims.
     The account opening documents that New World provided to Cadent falsely represented that all money used to fund trading in the pooled accounts came from “individuals who were the principals … that no funds came from any third parties, and that the accounts were not being traded on behalf of any third parties,” the CFTC says.
     Reisinger and Erdman allegedly admitted that the pooled accounts should “not have been introduced and/or carried as proprietary accounts because the accounts were funded by pooled funds of third-party clients.”
     The CFTC demands disgorgement, an injunction and civil penalties.

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