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List Members,
I am writing to the list because so many people have posted outright lies
about our situation. Although I don't feel comfortable disclosing this
information, I feel like I have to respond.
First of all, we have indeed done a Reg. D Private Offering. The Offering
was for a total of $500,000 which was to be used for two purposes:
1) To meet the Capital Requirement to become registered as a Non Clearing
FCM. The minimum requirement for this is $250,000. Contrary to a previous
post, once we become a Non-Clearing FCM, we will continue to clear through
LFG on a omnibus basis. An example of this is Vision L.P. which is
registered as an FCM but clears through Lind Waldock.
2) To provide Working Capital for the business. To date we have raised just
over $250,000 which has been used to expand our business over ten-fold since
inception. Every penny raised has been accounted for, and the NFA has gone
through our accounts item by item. Again, it is no ones business outside of
our Members what has gone on, but I will document everything I am stating to
anyone interested via private E-Mail & by fax.
Over the last 2.5 years our firm has overcome approximately $150,000 in
deficit customer accounts which were deducted from our income. Needless to
say, this has put a severe strain on our cash flow. This has also been
documented for the NFA by our clearing firms. Throughout all of this ATG
has managed to continue to grow and post impressive growth in income.
The NFA came into our office for an audit on 5-11-98 and left on 5-20-98.
During the course of the audit no rule violations were cited. The NFA is a
Self Regulatory Organization for the Futures Industry. As far as I knew
Private Offerings were under the Jurisdiction of the SEC. The NFA decided
that they were going to investigate our Offering regardless of jurisdiction.
On 6-15-98 we had a hearing in the NFA office on this matter. At the
hearing each side presented their case. It was clear that we did exactly
what we proposed with the funds from our offering and have violated no NFA
rules.
Due to the fact that we have been charged for the deficits in customer
accounts and never paid back, the only thing we have failed to do to this
point is an audited annual financial report. The cost of an audited
financial statement is approximately $15,000 for our firm. We have offered
to have a former NFA auditor who is now a CPA prepare this for us.
The bottom line is that we have done nothing against NFA rules and we have
only two members who have complained about not receiving annual reports.
One of them is now working with us on getting our books in order. The other
has been offered a buyback of his interests.
In my opinion, the action taken against us is not only unfair but
unwarranted. The NFA promised us a written ruling on our hearing "within a
reasonable amount of time" as of today, no ruling has been offered. We have
done nothing to warrant any action regarding our futures business or our
Private Offering.
Sincerely,
Richard Spohr
ATG
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