The Commodity Futures Trading Commission announced that the U.S. District Court for the Northern District of Illinois entered a consent order imposing permanent injunctive relief, civil monetary penalties, disgorgement and other equitable relief against commodity pool operators LJM Partners Ltd and LJM Management Ltd, former chairman and owner Anthony J. Caine, and former chief portfolio manager Anish Parvataneni. The order requires Caine and Parvataneni to pay civil monetary penalties of USD 500,000 and USD 200,000, respectively, and requires LJM and Caine to pay USD 4,624,271 in joint and several disgorgement (including pre-judgment interest) and Parvataneni to pay USD 721,093 in disgorgement (including pre-judgment interest). It also imposes registration bans of three years for Caine and one year for Parvataneni, restricts them from managing or advising trading for third parties for the same periods (with limited family exceptions), and permanently enjoins the defendants from further violations of the Commodity Exchange Act and CFTC regulations as charged. The consent order stems from the CFTC’s May 2021 complaint alleging that, from at least June 2016 through February 2018, the defendants made false and misleading statements to prospective and existing pool participants and others about LJM’s short options trading strategies, including statements about maximum daily loss and risk management, and failed to disclose changes that increased LJM’s risk profile in late 2017 and early 2018. The complaint also described LJM having more than USD 1 billion in assets under management in January 2018 before suffering over 80% trading losses on 5 and 6 February 2018 when the Cboe Volatility Index spiked by more than 20 points, after which LJM closed. The CFTC noted a prior order against LJM’s former chief risk officer for USD 247,444 in penalties and disgorgement, and that the court also entered an order resolving the Securities and Exchange Commission’s related charges against the same defendants.
Commodity Futures Trading Commission 2025-07-01
Commodity Futures Trading Commission obtains consent order imposing USD 700,000 penalties, USD 5.35 million disgorgement and registration bans on LJM commodity pool operators
The Commodity Futures Trading Commission announced a consent order by the U.S. District Court for the Northern District of Illinois against LJM Partners Ltd, LJM Management Ltd, and key individuals, imposing penalties and registration bans for misleading statements and risk management failures. The order includes USD 4.6 million in disgorgement and USD 700,000 in penalties, with registration bans for Anthony J. Caine and Anish Parvataneni. This follows a CFTC complaint about false statements and significant losses in February 2018.