Texas-based commodity pool operators ("CPOs") John B. Oden and Oden Capital Management, LLC agreed to settle CFTC charges alleging violations of numerous commodity pool rules, including the failure of Mr. Oden to register as a CPO prior to operating two commodity interest pools. The CPOs will be banned from trading and solicitation for five years, and will jointly pay a $100,000 civil monetary penalty.
The CFTC Order determined that Mr. Oden, the controlling person of Oden Capital Management, LLC, falsely claimed exemption from registration under CFTC Rule 4.13(a)(2). Additionally, the CFTC Order found that Mr. Oden (i) failed to provide the required notice to prospective participants of said exemption, (ii) failed to promptly furnish each pool participant with copies of certain monthly statements for the pool, which "would have been necessary to show the net profit or loss on all commodity interests closed since the date of the previous statement," (iii) improperly comingled pool participant funds with his personal and family accounts, and (iv) improperly used "promotional materials that showed trading returns based on hypothetical results without also including required disclosure language."
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