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NOTICE OF MEMBER AND ASSOCIATE RESPONSIBILITY ACTIONS:
On July 10, 2006, NFA issued a Member Responsibility Action ("MRA") against Jordan Assets Ltd. and Wallace Neal Jordan whereby:
1. JAL and Jordan are suspended from NFA membership and associate membership, respectively, effective immediately and until further notice;
2. JAL and Jordan are prohibited from acting in any manner which requires registration under the Commodity Exchange Act;
3. JAL and Jordan are prohibited from soliciting or accepting any customer or pool participants’ funds or placing trades on behalf of any customers or commodity pools they operate except to liquidate existing positions;
4. JAL and Jordan are prohibited from disbursing or transferring any funds of customers or commodity pools from any accounts (bank, trading, or any other types of accounts) without prior approval from NFA; and
5. JAL and Jordan are required to provide copies of this MRA and ARA via overnight courier to all customers having accounts, which either JAL or Jordan control, and to all pool participants in any pools that JAL or Jordan operate or over which either of them exercises control, including, but not limited to, the Jordan Index Fund LP (the "Index Fund" or "the pool") and to all banks and other financial institutions with which money is on deposit in the name of the pool or JAL or in the name of a customer and that either JAL or Jordan control.
This action is effective immediately and is deemed necessary to protect the commodity futures markets, customers, or other Members or Associates because JAL and Jordan have failed to produce to NFA books and records requested by NFA as part of an examination of JAL and, thus, have failed to cooperate with NFA in the examination of JAL, and have failed to demonstrate that JAL is in full compliance with all NFA Requirements. Further, JAL and Jordan appear to have acted in a manner that is contrary to the interest of their customers by selling a debenture of questionable value, which was previously held in Jordan's name, to the pool JAL operated.
The MRA and ARA will remain in effect until such time as JAL has demonstrated to the satisfaction of NFA that it is in complete compliance with all NFA Requirements.
On August 2, 2006, NFA's Hearing Panel issued a Decision modifying the MRA as follows:
1. JAL and Jordan continue to be suspended from NFA Membership and Associate membership, prohibited from acting in any manner which requires registration under the CEA, prohibited from accepting any customer or pool participants’ funds for placing trades on behalf of any customers or commodity pools they operate except to liquidate existing positions and prohibited from disbursing or transferring any funds of customers or commodity pools from any accounts without prior approval from NFA until:
a. JAL provides each participant in the Index Fund as of June 30, 2006 with a copy of the "Notice of Regulatory Action" attached to this Decision.
b. JAL provides NFA with a list of participant redemption requests made since April 11, 2006 and informs NFA whether the Fund has met the redemption requests, and if not, how and by what date JAL will meet the requests.
c. JAL revises the Index Fund’s disclosure document to the satisfaction of NFA and provides a copy of the revised disclosure document to all participants in the Fund as of June 30, 2006.
2. These revisions to the Fund’s disclosure document must include, but are not limited to, including information on any relevant regulatory actions taken against Jordan and/or JAL; including information on the Fund’s security holdings in GJI and providing the following information regarding the Boston Restaurant Associates, Inc. debenture:
a. the date of the purchase by the Index Fund and the material terms of the debenture;
b. the date Jordan purchased the debenture from GJI and the amount Jordan paid;
c. the date GJI purchased the debenture, who sold the debenture to GJI and the amount GJI paid for the debenture;
d. a description of JAL’s and Jordan’s affiliation with GJI;
e. a description of the market for the BRA debenture;
f. the current fair market value of the debenture and how it was determined;
g. a complete description of the circumstances surrounding the December 2005 interest payment that was received by Jordan and the method used by Jordan to repay the Fund;
h. the percentage of pool assets represented by the debenture as of the most current date available; and.
i. whether the Fund’s purchase of the debenture will effect the Fund’s ability to meet redemption requests.
PETITION FOR STAY:
On August 29, 2006 JAL and Jordan filed a Petition for Stay ("Petition"). NFA is awaiting the CFTC's decision on the Petition. A Notice of Appeal has not been filed.
PETITION FOR STAY:
On August 29, 2006 Jordan filed a Petition for Stay ("Petition"). NFA is awaiting the CFTC's decision on the Petition. A Notice of Appeal has not been filed.
NOTICE OF APPEAL:
On September 12, 2006, JAL and Jordan filed a Notice of Appeal with the CFTC.
ORDER DENYING STAY:
On September 26, 2006, the CFTC denied JAL and Jordan's Petition for Stay.
On April 12, 2007, the CFTC granted NFA's motion to dismiss JAL and Jordan's appeal. The appeal was dismissed as unperfected.