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CTA Disclosure Document

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CTA Disclosure Document Disclosure Document Managed Account Agreement Opes Capital Group, LLC 9454 Wilshire Blvd, Suite 803 Beverly Hills, CA 90212 Phone: 310-247-8038 Fax: 310-388-3995 Trading Program The date of this Disclosure Document is July 30, 2012, 2012 and may not be utilized after April 30, 2013 THE COMMODITY FUTURES TRADING COMMISSION HAS NOT PASSED UPON THE MERITS OF PARTICIPATING IN THIS TRADING PROGRAM NOR HAS THE COMMISSION PASSED ON THE ADEQUACY OR ACCURACY OF THIS DISCLOSURE DOCUMENT. THE DELIVERY OF THIS DISCLOSURE DOCUMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE SHOWN ABOVE. 1 RISK DISCLOSURE STATEMENT THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. IN CONSIDERING WHETHER TO TRADE OR TO AUTHORIZE SOMEONE ELSE TO TRADE FOR YOU, YOU SHOULD BE AWARE OF THE FOLLOWING: IF YOU PURCHASE A COMMODITY OPTION YOU MAY SUSTAIN A TOTAL LOSS OF THE PREMIUM AND OF ALL TRANSACTION COSTS. IF YOU PURCHASE OR SELL A COMMODITY FUTURES CONTRACT OR SELL A COMMODITY OPTION OR ENGAGE IN OFF-EXCHANGE FOREIGN CURRENCY TRADING YOU MAY SUSTAIN A TOTAL LOSS OF THE INITIAL MARGIN FUNDS OR SECURITY DEPOSIT AND ANY ADDITIONAL FUNDS THAT YOU DEPOSIT WITH YOUR BROKER TO ESTABLISH OR MAINTAIN YOUR POSITION. IF THE MARKET MOVES AGAINST YOUR POSITION, YOU MAY BE CALLED UPON BY YOUR BROKER TO DEPOSIT A SUBSTANTIAL AMOUNT OF ADDITIONAL MARGIN FUNDS, ON SHORT NOTICE, IN ORDER TO MAINTAIN YOUR POSITION. IF YOU DO NOT PROVIDE THE REQUESTED FUNDS WITHIN THE PRESCRIBED TIME, YOUR POSITION MAY BE LIQUIDATED AT A LOSS, AND YOU WILL BE LIABLE FOR ANY RESULTING DEFICIT IN YOUR ACCOUNT. UNDER CERTAIN MARKET CONDITIONS, YOU MAY FIND IT DIFFICULT OR IMPOSSIBLE TO LIQUIDATE A POSITION. THIS CAN OCCUR, FOR EXAMPLE, WHEN THE MARKET MAKES A “LIMIT MOVE.” THE PLACEMENT OF CONTINGENT ORDERS BY YOU OR YOUR TRADING ADVISOR, SUCH AS A “STOP-LOSS” OR “STOP-LIMIT” ORDER, WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS, SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS. A “SPREAD” POSITION MAY NOT BE LESS RISKY THAN A SIMPLE “LONG” OR “SHORT” POSITION. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY INTEREST TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. IN SOME CASES, MANAGED COMMODITY ACCOUNTS ARE SUBJECT TO SUBSTANTIAL CHARGES FOR MANAGEMENT AND ADVISORY FEES. IT MAY BE NECESSARY FOR THOSE ACCOUNTS THAT ARE SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIAL TRADING PROFITS TO AVOID DEPLETION OR EXHAUSTION OF THEIR ASSETS. THIS DISCLOSURE DOCUMENT CONTAINS, AT PAGE 14, A COMPLETE DESCRIPTION OF EACH FEE TO BE CHARGED TO YOUR ACCOUNT BY THE COMMODITY TRADING ADVISOR. THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND OTHER SIGNIFICANT ASPECTS OF THE COMMODITY INTEREST MARKETS. YOU SHOULD THEREFORE CAREFULLY STUDY THIS DISCLOSURE DOCUMENT AND COMMODITY 2 INTEREST TRADING BEFORE YOU TRADE, INCLUDING THE DESCRIPTION OF THE PRINCIPAL RISK FACTORS OF THIS INVESTMENT, AT PAGE 8. YOU SHOULD ALSO BE AWARE THAT THIS COMMODITY TRADING ADVISOR MAY ENGAGE IN TRADING FOREIGN FUTURES OR OPTIONS CONTRACTS. TRANSACTIONS ON MARKETS LOCATED OUTSIDE THE UNITED STATES, INCLUDING MARKETS FORMALLY LINKED TO A UNITED STATES MARKET MAY BE SUBJECT TO REGULATIONS WHICH OFFER DIFFERENT OR DIMINISHED PROTECTION. FURTHER, UNITED STATES REGULATORY AUTHORITIES MAY BE UNABLE TO COMPEL THE ENFORCEMENT OF THE RULES OF REGULATORY AUTHORITIES OR MARKETS IN NON-UNITED STATES JURISDICTIONS WHERE YOUR TRANSACTIONS MAY BE EFFECTED. BEFORE YOU TRADE YOU SHOULD INQUIRE ABOUT ANY RULES RELEVANT TO YOUR PARTICULAR CONTEMPLATED TRANSACTIONS AND ASK THE FIRM WITH WHICH YOU INTEND TO TRADE FOR DETAILS ABOUT THE TYPES OF REDRESS AVAILABLE IN BOTH YOUR LOCAL AND OTHER RELEVANT JURISDICTIONS. THIS COMMODITY TRADING ADVISOR IS PROHIBITED BY LAW FROM ACCEPTING FUNDS IN THE TRADING ADVISOR’S NAME FROM A CLIENT FOR TRADING COMMODITY INTERESTS. YOU MUST PLACE ALL FUNDS FOR TRADING IN THIS TRADING PROGRAM DIRECTLY WITH A FUTURES COMMISSION MERCHANT OR RETAIL FOREIGN EXCHANGE DEALER, AS APPLICABLE. 3 TABLE OF CONTENTS Page ORGANIZATION, NAME AND ADDRESS ..................................................................................... 5 PRINCIPALS & BUSINESS BACKGROUNDS ................................................................................ 5 SUB-ADVISOR ................................................................................................................................. 6 FUTURES COMMISSIONS MERCHANT & INTRODUCING BROKER ........................................ 7 THE TRADING PROGRAM – PRINCIPLE RISK FACTORS .......................................................... 8 TRADING PROGRAM AND STRATEGY ......................................................................................13 FEES.......................................................................................................................................................14 CONTRIBUTIONS AND WITHDRAWALS ....................................................................................16 PARTIALLY FUNDED (NOTIONAL) ACCOUNTS .......................................................................17 CONFLICTS OF INTEREST ............................................................................................................17 PAST PERFORMANCE ...................................................................................................................18 LITIGATION ....................................................................................................................................20 TRADING FOR ADVISOR’S OWN ACCOUNT .............................................................................22 ORDER ENTRY AND ALLOCATION ............................................................................................22 TAX CONSIDERATIONS ................................................................................................................22 PRIVACY POLICY ..........................................................................................................................23 APPENDIX A: OPES CAPITAL GROUP, LLC MANAGED ACCOUNT AGREEMENT AND POWER OF ATTORNEY 4 No person is authorized by Opes Capital Group, LLC to give any information or to make any representations, with respect to the trading program (“Trading Program”) described below, other than those contained in this Disclosure Document. ORGANIZATION, NAME AND ADDRESS Opes Capital Group, LLC (“the Advisor”), a California limited liability company, provides futures trading advisory services to selected clients (herein after referred to as “Clients” and each will be a “Client”). The Advisor maintains its business office at 9454 Wilshire Blvd, Suite 803, Beverly Hills, CA 90212. The books and records of Advisor are maintained at 9454 Wilshire Blvd, Suite 803, Beverly Hills, CA 90212. The Advisor’s business telephone number is 310-247-8038. The Advisor’s fax number is 310- 388-3995. PRINCIPALS & BUSINESS BACKGROUNDS The Advisor is a California limited liability company that was formed on July 17, 2009. The effective date of this Disclosure Document is July 30, 2012. The Disclosure Document is presented to potential Clients to inform each such potential Client about the Advisor and the Advisor’s Trading Program. The Advisor became registered with the Commodity Futures Trading Commission (“CFTC”) as a commodity trading advisor (“CTA”) on July 21, 2009, and became a Member of the National Futures Association (“NFA”) on July 21, 2009. The Principals of the Advisor are Joshua Farahi and Justin Farahi, who are also Associated Persons of the Advisor. Joshua Farahi Principal, Director of Operations and Director of Investments Mr. Farahi is a Principal of the Advisor. In his capacity as Director of Operations, Mr. Farahi is responsible for the management and day to day activities of the Advisor. As Director of Investments, he is responsible for the portfolio strategy and overseeing all trading, including any trades executed by the Sub-Advisor (discussed below). From March of 2000 until January 2010, Mr. Farahi worked for NewPoint Securities, LLC, a registered broker dealer. At NewPoint Securities Mr. Farahi has served in a number of business and compliance roles including Vice President, Branch Principal, Investment Advisor Representative, and Insurance Agent. In these roles he has been responsible for supervising registered representatives of the firm and managing the firm’s compliance requirements. Mr. Farahi holds the following series exam licenses: Series 3, Series 4, Series 7, Series 24, Series 28, Series 54, Series 55, and Series 66. Mr. Farahi became listed as a Principal of the Advisor from July 21, 2009 to July 20, 2010 and relisted on August 3, 2010. He was registered as an Associated Person of the Advisor on July 21, 2009. He became an Associate Member of the NFA on July 21, 2009. Mr. Farahi became an Associated Member of MJF Capital Management, LLC on July 21, 2009. Mr. Farahi withdrew his Associated Membership with MJF Capital Management, LLC on June 14, 2012. Mr. Farahi is currently an Associated Person and Principle of MJF Capital Management, LLC (“MJF”). MJF is a CFTC registered commodity pool operator which provides investment advice to a commodity pool. MJF is currently pending withdrawal as a commodity pool operator. 5 Justin Farahi Principal,
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