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December 13, 2013
NFA takes emergency enforcement action against Illinois firm Novo Trading LLC and one of its principals, Thomas Henry O'Connell Jr.
December 13, Chicago - National Futures Association (NFA) announced today that it has taken an emergency enforcement action against Novo Trading LLC, an NFA Member commodity trading advisor (CTA) located in Oak Park, Illinois, and Thomas Henry O'Connell Jr., a principal and associated person (AP) of Novo.
NFA has taken the Member Responsibility Action (MRA) and Associate Responsibility Action (ARA) to protect customers of Novo since Novo and O'Connell are soliciting customers with false and misleading promotional material with inaccurate rates of return (ROR) and grossly overstated assets under management (AUM). Novo and O'Connell have also deliberately misled and lied to NFA during its examination of Novo, and they have failed to cooperate with NFA throughout its attempted examination of Novo.
Specifically, Novo posts promotional material on at least two websites, Autumn Gold and BarclayHedge—aggregators of CTA performance information—which Novo uses to solicit potential customers. Novo's promotional material advertises the benefit of "30 plus years of trading experience [of] Jerry Considine [and] Novo Trading LLC" and claims that Novo has AUM of $56 million and RORs which are steadily profitable on a month-to-month basis and go back as far as 2008. Jerry Considine (Considine) is a listed principal of Novo but not a registered AP or NFA Associate. However, when requested by NFA, neither O'Connell nor Considine could provide bank records, customer account statements and other performance records which would verify Novo's purported AUM and RORs.
Based on Novo and O'Connell's failure to produce all of the requested bank records, NFA cannot determine the source of funds in the Novo bank account and cannot rule out the possibility that Novo and Considine used customer money to fund trading accounts for Considine's own benefit or the benefit of his family members.
Novo, O'Connell, Considine and any current or former employees of Novo and any person acting on behalf of Novo are prohibited from soliciting or accepting any funds from customers or investors, soliciting investments for any managed accounts or placing any trades, except liquidation or risk reducing trades in any accounts in the name of Novo, O'Connell, Considine, or any customer accounts over which Novo, O'Connell, Considine or any current or former employee of Novo exercise control or manage. They also are prohibited from disbursing or transferring any funds over which they or any person acting on their behalf exercises control without prior approval from NFA.
The MRA/ARA will remain in effect until such time as Novo and O'Connell have demonstrated to the satisfaction of NFA that they are in complete compliance with all NFA Requirements.
Novo and O'Connell may request a hearing before NFA's Hearing Committee.