AlphaMetrix Group LLC, a Chicago-based firm that funnels investor money to fund managers, must repay about $600,000 to participants in commodity pools by Nov. 1, the National Futures Association said.
AlphaMetrix will be prohibited from placing trades for any of its pools except for liquidating open positions if it fails to meet the repayment deadline, the self-regulatory body for the U.S. derivatives industry said in an e-mailed statement today. The company has about $700 million under management, according to the statement.
AlphaMetrix said in an Oct. 10 letter that it had discovered “significant cash-flow issues.” The firm, which had marketed itself as a haven for investors from fraudsters such as Bernard Madoff, fired its chief financial officer and hired accounting firm Arthur F. Bell Jr. & Associates LLC to review its internal controls and recordkeeping.
The firm had deducted advisory fees for some participants in commodity pools that it operates, according to the NFA’s statement. Those fees were to be reinvested in the pools but were not, the NFA said.
The investment adviser is in talks to sell a stake to some of the managers to which it owes fees, two people familiar with the matter said this month. It is also speaking with banks and money managers about selling itself or securing a loan, said one of the people, who asked not to be identified because the information is private.
In addition to directing investors’ money to fund managers, AlphaMetrix holds conferences and had enlisted former British Prime Ministers Tony Blair and Gordon Brown for events this year in Monaco and Miami Beach, Florida. Blair earned $300,000 plus expenses for speaking at the Florida event in January, Bloomberg Markets magazine reported earlier this year, citing a person familiar with the matter. Blair’s spokeswoman said at the time that the fee was lower than reported.
AlphaMetrix also hosted a performance last year by CeeLo Green, a singer from American soul group Gnarls Barkley and a judge on TV singing competition “The Voice.”