NFA Bars Commodity Pool Operator

Michael Volpe

After spending a decade in finance, Michael Volpe has been a freelance investigative journalist since 2009. His work has been published locally in the Chicago Reader, Chicago Crusader, Chicago Heights Patch, and New City. Nationally, Volpe's work has appeared in a wide variety of publications including the Washington Examiner, the Daily Caller, Crime Magazine, the Southern Christian Leadership Conference Newsletter, and Counter Punch. Volpe has been recognized by whistleblowers as leading the charge in getting their stories out. His first book Prosecutors Gone Wild was published in October 2012, his second book The Definitive Dossier of PTSD in Whistleblowers was published in February 2013 and his third book Bullied to Death was published in August 2015.

NFA Bars Commodity Pool Operator

August 19, 2019

The NFA announced the action against Beverstone Fund Management.

“NFA has permanently barred Beverstone Fund Management (Beverstone), an NFA Member commodity pool operator and commodity trading advisor located in George Town, Cayman Islands, and its principal and sole associated person Roland Kaehler from membership and from acting as a principal of an NFA Member.”

“Specifically, the Committee finds that Beverstone and Kaehler made false and misleading statements to its participants,” a decision by the NFA found dated August 15, 2019.

The decision spelled out the specific transgressions.

After sustaining heavy losses in two feeder funds, Beverstone provided an indemnification agreement to clients, promising to pay investors for losses of nearly $6 million if they kept their funds in place until September 30, 2018.

Here is how NFA described what happened next.

“At the time (May 1, 2018), Kaehler and Beverstone sent ‘indemnification agreements’ to participants, the Feeder Funds had incurred about $5.85 million in net losses, which would have been the minimum amount Beverstone and Kaehler were agreeing to pay the participants. However, Kaehler admitted to NFA neither he nor Beverstone had sufficient liquid assets to satisfy the amounts due under the ‘indemnification agreement’. Kaehler told NFA that at the time he signed the ‘indemnification agreements’ he intended to satisfy them by achieving trading gains in the Feeder Funds- notwithstanding the fact that the cumulative ROR for the Master Fund was approximately negative 87%.”

The Feeder Fund lost another $408,000 from May 1- when the indemnification agreements were signed and September 1, according to the complaint.

“During the week of November 26, 2018, NFA asked Kaehler how he intended to satisfy the amounts due under the indemnification agreements. Kaehler said he planned to liquidate some of his assets including his ownership in a commercial building in Toronto, a second personal residence in Prague,” the NFA complaint noted further.

NFA soon discovered he had no such ownership interests.

“As a consequence, Beverstone and Kaehler failed to demonstrate that they had the financial wherewithal to  fulfill, even in part, their financial obligations,” the complaint stated.

Beverstone is a repeat offender.

In 2018, Beverstone was charged with failing to file quarterly reports; they were fined $30,000, according to the NFA for that infraction.

NFA has barred Beverstone from any NFA activity.

The NFA is a self-regulatory organization which regulates the futures industry.

“In 1974, Congress established the Commodity Futures Trading Commission (CFTC). The same legislation that established the CFTC also authorized the creation of registered futures associations, giving the industry the opportunity to create a self-regulatory organization. NFA’s formal designation as a “registered futures association” was granted by the CFTC on September 22, 1981. NFA began its regulatory operations in 1982,” according to the NFA’s website.

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