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May 02, 2017
NFA orders London, England commodity pool operator and commodity trading advisor Duet Asset Management Ltd. to pay a $1 million fine
May 2, Chicago—National Futures Association (NFA) has ordered Duet Asset Management Ltd., an NFA Member commodity pool operator and commodity trading advisor located in London, England, to pay a $1 million fine.
The Decision, issued by NFA's Business Conduct Committee (BCC), is based on a Complaint authorized by the BCC on May 2, 2017, and a settlement offer submitted by Duet Asset Management Ltd. The Complaint alleged, among other things, that Duet Asset Management Ltd. caused its pools to make prohibited loans and advances to entities affiliated with its chief executive officer, Henry Gabay, a listed principal of the firm, and used pool assets to make these loans and invest in other transactions that furthered the interests of Gabay and his affiliates, rather than those of pool participants.
The Complaint also alleged that Duet Asset Management Ltd. permitted Gabay and his affiliates to misuse pool assets by pledging these assets as collateral to guarantee financial obligations of Gabay and his affiliates, failed to adequately disclose material information to participants in two pools regarding Gabay and his affiliates' involvement in one of the pools' investments, and paid redemptions that did not take into account the highly illiquid nature of particular stock holdings.
The Complaint further alleged that Duet Asset Management Ltd. used misleading promotional material regarding the personal investments of the chief investment officer for Duet Asset Management's Global Plus Fund and permitted an unregistered individual—Gabay—to act as an associated person (AP) of the firm without being registered as such.
In addition to the $1 million fine, the BCC ordered Duet Asset Management Ltd. to provide notice of NFA's disciplinary action to its former, current and future clients, and to register Gabay as an AP of the firm.