The Commodity Futures Trading Commission (CFTC) filed a contempt of court motion against Lake Shore Asset Management Limited (LAM) for refusing to open its books, and a judge has frozen $238 million the firm has on deposit with its brokers.
The CFTC says LAM has not produced a list of all accounts under management, account opening documents, monthly statements, copies of all correspondence between the defendant and each account holder and all disclosure documents and offering memoranda for funds under its management. The complaint also says LAM’s principals, including LAM’s director Laurence Rosenberg, made inconsistent statements about assets in the pools and managed accounts, LAM’s ownership, U.S. investors in the pools and the location of its books and records.
In a press statement Philip Baker, Lake Shore’s managing partner, says the firm has begun discussions with the CFTC and the National Futures Association (NFA) to clarify its activities and their relationship to its U.S. registration and that the attorney responsible for the filings has resigned.
“Our new legal counsel is reviewing the U.S. regulator’s requests and is actively pursing the appropriate way in which Lake Shore can satisfy these while working within the confines of international law and regulations,” Baker says. “The separations of the anticipated U.S. onshore activities of our Bermuda-based CTA from our ongoing offshore activities were not clearly presented as was intended.”
CFCT requires annual review
The CFTC has adopted rules requiring each registered futures commission merchant, introducing broker, commodity trading advisor (CTA), commodity pool operator and leverage transaction merchant to conduct an online review of the person’s registration information maintained by the NFA. The rule becomes effective Aug. 1.
CORRECTIONS
In “Managed Money Review,” July 2007, the May and year-to-date returns as of May for Morgan Stanley Charter Aspect L.P. are 6.31% and 3.80%, and 5.64% and 0.15% for Morgan Stanley Charter Campbell. In the same issue, the Barclay Hedge Fund Index returns were for April, not March. Futures regrets the errors.
HOT NEW CTAs
Futures is looking for the best new CTAs to profile in our annual feature. If you have managed customer funds for at least one year and have less than $15 million under management, mail your disclosure document and audited track record to Dan Collins, Futures Magazine, 111 W. Jackson Blvd., Suite 2210, Chicago, IL 60604. E-mail: dcollins@futuresmag.com. Deadline: Friday, Aug. 18, 2007.
