Federal Court Orders LJM Partners and Executives to Pay Over $6 Million in CFTC Fraud Action

The U.S. District Court for the Northern District of Illinois has entered a consent order requiring Chicago commodity pool operators LJM Partners Ltd and LJM Management Ltd, alongside former chairman and owner Anthony J. Caine and former chief portfolio manager Anish Parvataneni, to pay more than $6 million in monetary relief, the Commodity Futures Trading Commission (CFTC) announced. The consent order imposes permanent injunctive relief, civil monetary penalties, disgorgement, and registration and trading bans against the defendants following CFTC enforcement action. Under the terms of the order, Caine and Parvataneni are required to pay civil monetary penalties of $500,000 and $200,000, respectively. In addition, LJM and Caine were ordered to pay $4,624,271 in disgorgement jointly and severally, including pre-judgment interest, while Parvataneni must pay $721,093 in disgorgement including pre-judgment interest. The court also issued a three-year registration ban for Caine and a one-year registration ban for Parvataneni. Both individuals are prohibited from managing or advising trading on behalf of any third parties for three years and one year, respectively, with exceptions limited to trading for themselves, their spouses, or their children. The defendants are permanently enjoined from committing further violations of the Commodity Exchange Act and CFTC regulations. The resolution stems from a CFTC complaint originally filed in May 2021 against LJM, Caine, and Parvataneni. In earlier related proceedings, the CFTC ordered former LJM Chief Risk Officer Arjuna Ariathurai to pay $247,444 in penalties, disgorgement, and pre-judgment interest for failing to disclose certain risk management information to current and prospective pool participants. The court also entered an order resolving related charges filed by the Securities and Exchange Commission against the same defendants. The CFTC acknowledged the assistance and cooperation of the SEC, the National Futures Association (NFA), and the Financial Industry Regulatory Authority (FINRA) throughout the investigation and litigation.