Friday, 1 August 2014
Last updated 14 hours ago
Jun 5 2009 | 1:01pm ET
The National Futures Association has taken an emergency enforcement action against M25 Investments, M37 Investments, David Fearis, president of M25 and a director of M37, and Ronald Larson, president of M37.
Both firms are located in Waxahachie, Texas.
The NFA said its action was deemed necessary “to protect the investing public and futures markets based on evidence that M25 and M37 may be operating a Ponzi scheme in which they obtained loans from unsophisticated persons and in return gave these persons unsecured promissory notes that M25 and M37 have promised to repay.”
However, it appears that Fearis and Larson have allegedly funneled the borrowed funds to other entities controlled by principals of the firms and that there seems to be a $3.7 million shortfall between what is owed on the notes and the combined assets of M25 and M37.
In addition, Fearis and Larson continue to solicit loans, even though they don’t have the money to repay the existing loans and have failed to disclose this to their existing and prospective lenders.
Effective immediately, the NFA has banned Fearis and Larson from soliciting or accepting funds from investors and any loans from lenders without prior approval. The pair is also prohibited from placing any trades for themselves or customers. They are also prohibited from disbursing or transferring any accounts, which are in the names of or controlled by either M25 or M37.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…