June 07, 2013 NFA takes emergency enforcement action against New York firm SK Madison, Michael Seward who cannot account for at least $900,000 in SK Pool fund

copied from the nfa website

resource link  http://www.nfa.futures.org/NFA-regulation/regulationNewsRel.asp?ArticleID=4237

_________________________________________________________

For Immediate Release
June 07, 2013

NFA takes emergency enforcement action against New York firm SK Madison, LLC and its sole principal, Michael Seward

June 7, Chicago – National Futures Association (NFA) announced today that it has taken an emergency enforcement action against SK Madison, LLC (SK Madison), an NFA Member commodity trading advisor (CTA) located in New York, N.Y., and Michael James Seward, the sole principal and associated person (AP) of SK Madison.

NFA has taken the Member Responsibility Action (MRA) and Associate Responsibility Action (ARA) to protect customers of SK Madison since the firm and Seward cannot account for at least $900,000 in the SK Madison Commodities LLC Fund’s (SK Pool) participants’ funds. NFA also has reason to believe that the SK Pool participants are unaware of the true value of the SK Pool. Additionally, SK Madison and Seward have been unable to produce any accounting records to explain or justify the $900,000 it withdrew from the SK Pool’s bank account, leading NFA to conclude that Seward and other firm personnel have converted pool participant funds for their personal use. Finally, NFA believes that Seward deliberately misled NFA throughout the investigation regarding the amount contributed by participants to the SK Pool.

SK Madison and Seward, 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, pools or other investment vehicles. Additionally, SK Madison and Seward or anyone acting on their behalf, are prohibited from placing any trades except for liquidation or risk reducing trades. They also are prohibited from disbursing or transferring any funds of customers, investors, pools or pool participants without NFA’s prior approval.

The MRA/ARA will remain in effect until such time as SK Madison and Seward have demonstrated to the satisfaction of NFA that the firm is in complete compliance with all NFA Requirements.

SK Madison and Seward may request a hearing before NFA’s Hearing Committee.

The complete text of the MRA/ARA is available on NFA’s website (www.nfa.futures.org).

The following Compliance staff members are responsible for this case: Louis Berardocco (212-513-6030) and Joseph Bonnema (212-513-6031).

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