NFA Orders Alggoritmica Portfolio Management to Exit Membership

The US National Futures Association (NFA) has ordered Alggoritmica Portfolio Management LLC to withdraw from its membership and barred the firm from reapplying, according to a decision issued by an NFA Hearing Panel.

Alggoritmica, a Wilmington, Delaware-based commodity pool operator and commodity trading advisor, was subject to the action following a complaint brought by NFA's Business Conduct Committee. The order also applies to the firm's sole principal and associated person, Lino David Flores Hidalgo, who must withdraw from NFA membership for three years and pay a $75,000 fine. If Hidalgo seeks NFA membership or principal status in the future, he would be required to comply with several additional undertakings.

The decision stems from a settlement offer submitted by Alggoritmica and Hidalgo, in which they neither admitted nor denied the allegations outlined in the complaint.

According to the Business Conduct Committee, Alggoritmica violated multiple NFA compliance rules. These included allegations that the firm failed to ensure its Alggoritmica Volatility Portfolio Fund LP qualified for an exemption claimed under US Commodity Futures Trading Commission Regulation 4.7, and that it used a misleading disclosure document. The committee also alleged that the firm permitted a prohibited loan or advance of fund assets to itself and to Hidalgo.

Further allegations stated that Alggoritmica and Hidalgo did not act in the best interests of the fund and its participants and failed to cooperate fully and promptly with NFA during its investigation. In its decision, the Hearing Panel found that Hidalgo committed the violations alleged against him in the complaint.