The U.S. Commodity Futures Trading Commission (CFTC) announced that today entered an Order requiring Dallas, Texas-based W Resources, LLC (W Resources) to pay a $150,000 civil monetary penalty for acting as a Commodity Pool Operator (CPO) without registering with the CFTC and to cease and desist from further violating the Commodity Exchange Act (CEA), as charged.
The Order finds that W Resources operated W North Fund LLC, W North Fund II LLP, and W North Fund III LLP (together, W North Funds) as commodity pools by trading commodity options to hedge financial exposure to physical oil and gas assets. However, the Order finds that, beginning in or about October 2013, W Resources operated and continues to operate the W North Funds without registering with the CFTC as a CPO, in violation of the registration provisions of the CEA. Additionally, W Resources did not file a notice of exemption with the National Futures Association (NFA) under CFTC Regulations, or otherwise seek relief from the CFTC.
According to the Order, W Resources agrees to carry to expiration any position in commodity interests existing on the date of the Order, and will not transact in any other commodity interests, until and unless it registers with the CFTC, notifies NFA of an applicable exemption from registration, or otherwise seeks and receives no-action relief from the CFTC.
CFTC Division of Enforcement staff members responsible for this case are David W. Oakland, Steven Ringer, Lenel Hickson, and Manal Sultan.