U.S. Commodity Futures Trading Comm'n v. McCrudden

U.S. DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
Business Law

New York Law Journal

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Judge Denis Hurley

McCrudden owned and managed Managed Accounts Assets Management (MAAM) and Alnbri Management, which in turn operated the Hybrid Fund II commodity pool despite being neither registered with the Commodity Futures Trading Commission (CFTC) as commodity pool operators nor validly exempt from such requirement. Default was entered against MAAM and Alnbri after neither appeared in the CFTC's action charging them and McCrudden with violating the Commodity Exchange Act and its accompanying regulations. In addition to his four dismissal motions, the court denied McCrudden vacatur of the clerk's entry of default as to MAAM and Alnbri. The court rejected McCrudden's attempt to dismiss the complaint as brought with "malicious intent," evidenced by the CFTC's unwillingness to engage in settlement discussions. It noted that CFTC requested, and participated in, an ultimately unsuccessful settlement conference before a magistrate judge. McCrudden's challenge to the CFTC's decision to bring suit against him—where it did not do so against control persons of "big firms"—was not an appropriate question for the court to address, especially given that his protests lacked any specific factual basis.

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