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Technology > Investment Platforms > Turnkey Asset Management

O'Herron Permanently Barred from Futures Trading

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WASHINGTON (–A federal district court judge signed a consent order settling an enforcement action of the Commodity Futures Trading Commission against commodity pool operator John F. O’Herron and his company, O’Herron Asset Management Inc.

The order finds that, from January 1998 to June 2000, Mr. O’Herron, of Manistee, Mich., received approximately US$2.7 million of investor funds for the purpose of pooling and trading in commodity futures contracts, through O’Herron Asset Management. He diverted US$1.4 million of these funds for personal use.

The order, from Judge Joseph G. Scoville of the U.S. district court for the western district of Michigan, permanently enjoined Mr. O’Herron and his firm from further violations of the Commodity Exchange Act, required Mr. O’Herron to pay restitution of the diverted US$1.4 million to investors, pursuant to an income-based ten-year payment plan, and banned him permanently from any further futures trading.

The order, which was entered on Oct. 9, did not impose civil monetary penalties, due in part to Mr. O’Herron’s sworn representations to the CFTC and other evidence he provided concerning his financial condition. The CFTC, however, added that if it learns that those representations are inaccurate or misleading, it may petition to court again to impose such penalties.

Mr. O’Herron, who could not be reached for comment, has been registered as a commodity trading adviser since at least 1989, but he has never been registered as a CPO.

In soliciting investors, he falsely represented that he had a successful track record in trading U.S. Treasury bond futures. In fact, in the words of the court order, his actual record “is not even remotely similar to what he has represented.”

In a parallel criminal proceeding, Mr. O’Herron pleaded guilty on July 8, to felony mail fraud charges. His sentencing hearing is scheduled for Oct.18.


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