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By Christine Gaylican, Opalesque Asia:
The United States Commodity Futures Trading Commission (CFTC) announced on Tuesday that it had moved to permanently revoke the registrations of New York-based Commodity pool operator Linuxor Asset Management LLC (LAM) and its affiliate Commodity Trading Advisor Linuxor Capital Management LLC (LCM) for allegations of fraud.
Included in the case is trading advisor Abbas A. Shah, listed as principal of LCM's and LAM's.
The CFTC's Notice of Intent to Revoke Registration, filed on September 1, 2009, alleged that Shah and LAM are subject to disqualification from registration based on a consent order of permanent injunction issued by the U.S. Court District for the Southern District of New York.
The said court ruling resolved the federal fraud charges earlier filed by CFTC against Shah, et al. (Case No. 05-CV-8091 (LAK) (S.D.N.Y.)) on Dec. 17, 2008.
The New York District Court indicated that Shah and LAM engaged in fraud by knowingly sending two separate electronic mails to a LAM pool participant.
In the said e-mails, which were presented evidence, Shah "falsely represented that Linuxor pool had recovered more than half of its capital losses at a time when he knew that the pool had suffered additional losses."
Furthermore, the court also found the company officer had "knowingly misrepresented the net asset value of the pool by more than $3 million" and never corrected this false statement.
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