Queston about a moron

I know a guy that started a hedge fund and blew it out. He lost 13 million dollars in about three months.....all that was left was 200k.

Amazingly enough he's got a new fund. All he trades are S&P futures contracts. Doesn't he legally have to register as as CPO if all he trades are futures contracts. If he registers as a CPO then he has to disclose his previous track record.

Is this correct?

 

He can advertise a |98%| (ie. absolute 98%) return with a small * to the footnote. Like this:

"We produce |98%|* returns over three months! Invest with us now!"

Given the general level of reading comprehension, math skills and propensity to read the small print, he'll have 13m under management again in no time...

*Since we are a 'long & short' fund, returns are given as mathematical absolute figures. Past performance doesn't reflect future outcome.

 

do i know you?

 

who is the moron? I am sure that this hedge fund manager gets more women than u do.

ps is this manager an immigrant

 

sounds like Timothy Sykes, trying to write another book about how he lost his money...

 

Futures-trading funds have several ways in which they can be exempt from registration with the NFA. The most common way to be exempt: all investors must be qualified eligible participants. Qualified eligible participants either have > $5mm in assets, or are accredited investors with up to $2mm in securities investments.

And if they're exempt, then they don't need to satisfy the NFA's disclosure requirements.

 

I thought there was a rule that said if your fund was over a certain percentage that you had to register....meaning if your fund is 90% traded in futures you must register as a CPO.

I know if you are under 400k you don't have to register but I didn't know if all investors are accredited that also exempts you.

 

I just took my series 3 a week ago, so I have all of these facts floating around in my head.

There are various ways to be exempt. Here's a complete summary:

http://www.nfa.futures.org/NFA-registration/easyReferenceGuidePart4.pdf

Note that it's not enough just to have all of your investors be accredited under 4.13(a)(4): they must be "qualified eligible", for this category of exemption.

 

So this guy can never register as a CPO