5/15/2013 NFA court action against: STONEHENGE ASSET MANAGEMENT LLC, MICHAEL, STEVEN ALAN: 50k fine

This information was copied from the NFA website

Resource link: http://www.nfa.futures.org/basicnet/Case.aspx?entityid=0411098&case=12BCC00029&contrib=NFA

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Narrative for 0212526 – MICHAEL, STEVEN ALAN
**TO VIEW DOCUMENTS, GO TO CASE DOCUMENTS.**COMPLAINT:

On October 15, 2012, NFA issued a Complaint charging Stonehenge and Michael with submitting misleading information to NFA about the status of the SD3 pool; failing to observe high standards of commercial honor and just and equitable principles of trade; using inflated figures in its promotional material; aggregating the funds of SD1’s different investment classes together in the SDMaster trading accounts thereby making the equity of participants in investment classes with higher funding levels available to margin the positions of participants in investment classes with lower funding levels; misallocating pool funds to pay Stonehenge and Michael’s expenses; making untimely reimbursements and redemptions; using misleading offering memorandum for SD1; and failing to supervise the overall operations of the firm. The Complaint charged Stonehenge with failing to obtain acknowledgements confirming that investors met the definition of a QEP; failing to provide a disclosure document to individuals it solicited to invest in the SD3 pool; submitting inaccurate PQRs; failing to prepare SD1 account statements in accordance with U.S. Generally Accepted Accounting Principles; and allowing SD1 to make a loan to Stonehenge. Michael is charged with failing to abide by the terms of the settlement and Decision in a 2010 BCC case.

ANSWER:

On January 2, 2013, Stonehenge and Michael filed an Answer to the Complaint in which they denied the material allegations contained therein.

DECISION:

On May 15, 2013, pursuant to a settlement offer submitted by Stonehenge and Michael, Stonehenge was ordered to engage an independent third-party administrator to provide full administrative services to any pool operated by Stonehenge, including, but not limited to, effecting redemptions and ensuring that expenses paid by any such pools are properly authorized and disclosed to participants. Also, Stonehenge and Michael are jointly and severally liable for the payment of $50,000 to NFA.

Narrative for 0411098 – STONEHENGE ASSET MANAGEMENT LLC
**TO VIEW DOCUMENTS, GO TO CASE DOCUMENTS.**COMPLAINT:

On October 15, 2012, NFA issued a Complaint charging Stonehenge and Michael with submitting misleading information to NFA about the status of the SD3 pool; failing to observe high standards of commercial honor and just and equitable principles of trade; using inflated figures in its promotional material; aggregating the funds of SD1’s different investment classes together in the SDMaster trading accounts thereby making the equity of participants in investment classes with higher funding levels available to margin the positions of participants in investment classes with lower funding levels; misallocating pool funds to pay Stonehenge and Michael’s expenses; making untimely reimbursements and redemptions; using misleading offering memorandum for SD1; and failing to supervise the overall operations of the firm. The Complaint charged Stonehenge with failing to obtain acknowledgements confirming that investors met the definition of a QEP; failing to provide a disclosure document to individuals it solicited to invest in the SD3 pool; submitting inaccurate PQRs; failing to prepare SD1 account statements in accordance with U.S. Generally Accepted Accounting Principles; and allowing SD1 to make a loan to Stonehenge. Michael is charged with failing to abide by the terms of the settlement and Decision in a 2010 BCC case.

ANSWER:

On January 2, 2013, Stonehenge and Michael filed an Answer to the Complaint in which they denied the material allegations contained therein.

DECISION:

On May 15, 2013, pursuant to a settlement offer submitted by Stonehenge and Michael, Stonehenge was ordered to engage an independent third-party administrator to provide full administrative services to any pool operated by Stonehenge, including, but not limited to, effecting redemptions and ensuring that expenses paid by any such pools are properly authorized and disclosed to participants. Also, Stonehenge and Michael are jointly and severally liable for the payment of $50,000 to NFA.

05/15/2013 
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