NFA bars Quants Capital Management from membership for one year
NFA also permanently barred Quants and its ex-principal Kisacikoglu from acting as a principal of an NFA Member.
United States National Futures Association (NFA) has announced it has barred former commodity pool operator Quants Capital Management, Inc. and its former principal and associated person Gokhan Kisacikoglu from membership for one year. NFA is also barring permanently Quants and Kisacikoglu from acting as a principal of an NFA Member.
The Decision, issued by an NFA Hearing Panel, is based on a Complaint issued by NFA’s Business Conduct Committee (BCC). The Hearing Panel found that Quants and Kisacikoglu used misleading and deceptive promotional material that included unsubstantiated positive performance information and presented hypothetical information as if it were actual performance. The Hearing Panel also determined that Quants failed to prepare and distribute required monthly account statements.
While an NFA member (from May 2010 to January 2018) Quants operated two pools that engaged in trading – Quants Strategy Equity Fund and Quants Fund.
NFA’s complaint charges that Quants violated NFA Compliance Rules by failing to prepare and distribute pool account statements. The Complaint also charges that Quants together with Kisacikoglu violated NFA Compliance Rules by preparing and distributing a misleading disclosure document and using deceptive and misleading promotional material.
Monthly account statements were not provided to Quants’ investors on time.
Also, the Complaint alleges that the respondents, in their disclosure document and promotional material, included positive performance information related to MedSecurities accounts. Kisacikoglu represented to NFA that the profitable performance was derived from trading recommendations that Quants provided to seven account holders at MedSecurities Investments. But the respondents were unable to prove that they exercised discretion over these accounts. The only results that NFA could substantiate revealed significant losses.
Finally, the Complaint charges that Quants and Kisacikoglu used a tear sheet that failed to clearly identify performance results as hypothetical and included a disclaimer that made it unclear whether the returns are actual or hypothetical.
In determining the penalty, the NFA Panel took into account that this is the second BCC complaint against the respondents. In September 2013, Quants and Kisacikoglu were ordered to pay a fine for failing to comply with recordkeeping requirements.
