Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today filed and simultaneously settled charges against Howard Winell, Winell Associates, Inc. and Maxie Partners GP, LLC (Maxie GP), all of New York, N.Y. The CFTC order finds that the respondents engaged in unauthorized trading and misappropriated funds in connection with operating a commodity futures and options pool.
Specifically, the CFTC order finds that, commencing in 2005, the respondents solicited and pooled approximately $20 million from approximately 25 pool participants to trade commodity futures and options on commodity futures through a commodity pool named Maxie Partners LP. In May 2007, one of the pool’s largest participants made a request to redeem its approximately $7 million. According to the order, the respondents segregated the $7 million to meet the participant’s redemption request, but, before making the redemption, the pool sustained significant losses and had margin calls of approximately $4 million issued by Futures Commission Merchants holding the pool’s trading accounts. The order further finds that to meet the margin calls and continue trading, Winell transferred approximately $7 million, the participant’s segregated funds, back to the pool’s trading accounts. Through the margin calls and trading, the respondents lost approximately $3.8 million of the participant’s funds. The order concludes that the respondents misappropriated a pool participant’s funds and engaged in unauthorized trading.
The order requires the respondents jointly and severally to pay restitution of $3,740,277.37 and a $1.5 million civil monetary penalty. The order also imposes permanent trading bans on the respondents (with a limited exception) and permanently bans them from CFTC registration.
The CFTC Division of Enforcement staff members responsible for this case are Timothy M. Kirby, Kevin K. Batteh, Gretchen L. Lowe and Vincent A. McGonagle.