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March 28, 2013
NFA takes emergency enforcement action against North Carolina firm James A. Shepherd Inc. and its principal, James A. Shepherd
March 28, Chicago - National Futures Association (NFA) announced today that it has taken an emergency enforcement action against James A. Shepherd Inc. (Shepherd Inc.), an NFA Member commodity pool operator (CPO) and commodity trading advisor (CTA) located in Southern Pines, N.C., and James A. Shepherd, the sole principal and associated person (AP) of Shepherd Inc.
NFA has taken the Member Responsibility Action (MRA) and Associate Responsibility Action (ARA) to protect participants in the Shepherd Fund and investors in other investment vehicles controlled by Shepherd Inc. and James Shepherd, because of their failure to cooperate with NFA in its examination of Shepherd Inc. and the Shepherd Major Play Option Fund L.P. (Shepherd Fund). In particular, Shepherd has failed to make himself available for questioning by NFA examiners, and has failed to provide support for certain assets reported in the Shepherd Fund's Dec. 31, 2012 audited financial statement that was filed with NFA.
Specifically, Shepherd Inc. and James Shepherd have failed to provide support for--or confirm--the approximately $6 million in cash that was reported in the Shepherd Fund's Dec. 31, 2012 audited financial statement as being on deposit at BB&T bank in the name of the Shepherd Fund. Consequently, NFA has been unable to determine whether Shepherd Inc. and James Shepherd have acted properly in their dealings with participants of the Shepherd Fund or whether they have misappropriated participants' funds and provided false information to NFA and participants concerning the assets of the Shepherd Fund.
Shepherd Inc., James Shepherd and any person acting on their behalf are prohibited from soliciting or accepting any funds from customers or investors, soliciting investments for any managed accounts, commodity pools or other investment vehicles, or placing any trades on behalf of customers, commodity pools or investors except liquidation or risk-reducing trades. Additionally, they are prohibited from disbursing or transferring any funds over which they exercise control without prior approval from NFA.
The MRA/ARA will remain in effect until such time as Shepherd Inc. and James Shepherd have demonstrated to the satisfaction of NFA that they are in complete compliance with all NFA Requirements.
Shepherd Inc. and James Shepherd may request a hearing before NFA's Hearing Committee.