Case Summary

COMPLAINT:

On November 17, 2011, NFA issued a Complaint charging Covenant with failing to maintain adequate support for hypothetical performance claims; using a misleading and inaccurate disclosure document; and failing to disclose material information in the disclosure document. The Complaint also charged Covenant and Young with using promotional material that included hypothetical performance results without including the past performance of proprietary trading.

ANSWER:

On January 3, 2012, Covenant and Young filed an Answer to the Complaint in which they denied the material allegations contained therein.

DECISION:

On June 20, 2012, pursuant to a settlement offer submitted by Covenant and Young, Covenant was ordered not to apply for NFA membership or principal status with an NFA Member until after September 30, 2012. Young was ordered not to apply for NFA membership, associate membership or principal status with an NFA Member until after September 30, 2012. During this period Young may not act in any capacity requiring registration, nor act as a principal of an NFA Member.

If, after September 30, 2012, Covenant or Young applies for NFA membership, associate membership or seeks to become a principal of an NFA Member, then they are jointly and severally liable for a $5,000 fine, due and payable at the time they apply for NFA membership, associate membership or seek to become a principal of an NFA Member. No application by Covenant or Young will be considered or approved unless and until the fine is paid in full.

Covenant and Young were also ordered to adopt and implement writtent compliance procedures which are of a corrective nature and address the deficiencies in the Complaint; employ, for three years, an experienced futures professional to conduct annual audits, prepare disclosure documents; and comply with NFA's taping and promotional material requirements.

COMPLAINT:

On November 17, 2011, NFA issued a Complaint charging Covenant with failing to maintain adequate support for hypothetical performance claims; using a misleading and inaccurate disclosure document; and failing to disclose material information in the disclosure document. The Complaint also charged Covenant and Young with using promotional material that included hypothetical performance results without including the past performance of proprietary trading.

ANSWER:

On January 3, 2012, Covenant and Young filed an Answer to the Complaint in which they denied the material allegations contained therein.

DECISION:

On June 20, 2012, pursuant to a settlement offer submitted by Covenant and Young, Covenant was ordered not to apply for NFA membership or principal status with an NFA Member until after September 30, 2012. Young was ordered not to apply for NFA membership, associate membership or principal status with an NFA Member until after September 30, 2012. During this period Young may not act in any capacity requiring registration, nor act as a principal of an NFA Member.

If, after September 30, 2012, Covenant or Young applies for NFA membership, associate membership or seeks to become a principal of an NFA Member, then they are jointly and severally liable for a $5,000 fine, due and payable at the time they apply for NFA membership, associate membership or seek to become a principal of an NFA Member. No application by Covenant or Young will be considered or approved unless and until the fine is paid in full.

Covenant and Young were also ordered to adopt and implement writtent compliance procedures which are of a corrective nature and address the deficiencies in the Complaint; employ, for three years, an experienced futures professional to conduct annual audits, prepare disclosure documents; and comply with NFA's taping and promotional material requirements.