The National Futures Association (NFA), the self-regulatory organisation for the U.S. derivatives industry, recently announced that it has ordered Gautam Prakash, formerly of Monsoon Capital LLC, to not reapply for membership for seven years.
In particular, the US regulator has ordered Prakash not to reapply for membership or principal status with any NFA Member during this suspension period.
Prakash was a principal and former associate of Monsoon, a minority-owned asset manager, based in Bethesda, Maryland. The company was an NFA Member commodity trading advisor and commodity pool operator.
In addition to banning Prakash for a period of seven years, the derivatives regulator has also ordered Monsoon to not reapply for membership, or apply for principal status with any NFA Member for a two year period.
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The Decision from the regulator, issued by the NFA’s Business Conduct Committee (BCC), is based on a Complaint issued by the BCC, as well as a settlement offer that was submitted by both Monsoon and Prakash, mentioned in the statement from the regulator.
“The Complaint alleged that Monsoon and Prakash submitted false and inflated reimbursement requests for travel expenses and improperly used pool assets for a personal securities transaction,” the NFA said in its statement on Wednesday.
“The Complaint also alleged that Monsoon arranged a $1 million loan from its pools to itself, which proceeds were then transferred to Prakash’s personal bank account for a personal securities transaction.”
SEC Orders Prakash and Monsoon to Cease and Desist
The NFA is not alone in its actions against both Prakash and Monsoon. According to a court document seen by Finance Magnates, the Securities and Exchange Commission (SEC) ordered a cease and desist order against the two parties in April this year.
In the document, the SEC determined that Monsoon, an SEC-registered investment adviser, and Prakash, its founder and owner, had misused over $1 million worth of private asset funds.