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In Hedge Fund Alert, Asset Management Partner Deborah Monson Discusses Recent CFTC Action Against Elephas

Practices: Asset Management, Hedge Funds, Compliance for Hedge Funds, Derivatives & Commodities, Investment Management Litigation, Securities & Futures Enforcement

On July 2, the Commodity Futures Trading Commission (CFTC) fined Hong Kong investment manager Elephas Investment Management $160,000 for exceeding the number of Chicago Board of Trade (CBOT) contracts a speculative trader can hold for soft red winter wheat. Elephas also paid a penalty of more than $166,000 to CME Group, which operates the CBOT exchange.

Lawyers advising commodity-trading advisors say the action against Elephas Investment highlights the challenges of complying with position limits on agricultural futures, reports Hedge Fund Alert. The July 10 article, titled “Industry Lawyers Take Stock of CFTC Case,” features insights from asset management partner Deborah Monson. Ms. Monson said the Elephas case underscores the importance of establishing a “robust monitoring system. Pre-trade check, post-trade check, keeping numbers up to date — because limits change from time to time, as well as in the spot month.” Ropes & Gray has distributed a client advisory on the matter.

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