RISK DISCLOSURE STATEMENT
THE RISK OF LOSS IN TRADING COMMODITIES 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 FUTURE OR SELL A COMMODITY OPTION YOU MAY SUSTAIN A TOTAL LOSS OF THE INITIAL MARGIN FUNDS 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 TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS.
FOREIGN TRADING DISCLOSURE: YOU SHOULD ALSO BE AWARE THAT THIS COMMMODITY TRADING ACCOUNT MAY TRADE FOREIGN FUTURES AND/OR OPTION 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 PROTECTIONS TO THE COMMODITY TRADING ACCOUNT AND IT’S PARTICIPANTS. 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 TRANSACTIONS FOR THE POOL MAY BE EFFECTED.THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND OTHER SIGNIFICANT ASPECTS OF THE COMMODITY MARKETS. YOU SHOULD THEREFORE CAREFULLY STUDY THIS DISCLOSURE DOCUMENT AND COMMODITY TRADING BEFORE YOU TRADE, INCLUDING THE DESCRIPTION OF THE PRINCIPAL RISK FACTORS OF THIS INVESTMENT, AT PAGE 5.
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 PROGRAM DIRECTLY WITH A FUTURES COMMISSION MERCHANT
TABLE OF CONTENTS
INTRODUCTION
EcoFutures LLC is a California Limited Liability Company located at 4550 Norma Drive, San Diego CA, 92115, where all books and records are maintained. EcoFutures registered as a Commodity Trading Advisor beginning March 12, 2008 and became a NFA member on March 12, 2008.
PRINCIPALS
Paul Trentalange is the sole principle of EcoFutures.
Business Background
Dr. Paul Trentalange, RIA:
Dr. Paul Trentalange RIA, has owned and operated two successful healthcare facilities for the past 20 years in conjunction with coordinating all aspects of investment management activities and record keeping. He simultaneously tracked Market Trends and made trades for members of his family and friends from 1993- Present. Dr. Trentalange is currently registered with the Commodity Futures Trading Commission as an associated person. On March 12, 2008 he became listed as a principal of EcoFutures LLC CTA and on March 12, 2008 he registered as an associated person.
Commodity Trading Advisor’s Past Performance (CTA): EcoFutures CTA has yet to commence trading. Neither this Trading Advisor nor any of its principals have previously traded any accounts. There is NO Performance Statement.
Futures Commission Merchant (FCM)
EcoFutures LLC CTA clients may open a trading account with the FCM Man Financial Global.
Clients are free to choose an Introducing Broker of their choice or are not required to use an Introducing Broker.
MF Global Inc. ("MFG") is registered under the Commodity Exchange Act, as amended, as a futures commission merchant and a commodity pool operator, and is a member of the National Futures Association in such capacities. In addition, MFG is registered with the Financial Industry Regulatory Authority as a broker dealer. MFG was formerly known as Man Financial Inc. ("MFI") until the change of name to Man Financial Global, was affected on July 19, 2007. MFG is a member of all major U.S. futures exchanges and most major U.S. securities exchanges. MFG’s main office is located at 717 Fifth Avenue, 9
th
floor, New York, New York 10022-8101. MFG’s telephone number at such location is (212) 589-6200.
At any given time, MFG is involved in numerous legal actions and administrative proceedings, which in the aggregate, are not, as of the date of this Memorandum and/or Disclosure Document ("Memorandum"), expected to have a material effect upon its condition, financial or otherwise, or to the services it will render to the Partnership. There have been no administrative, civil or criminal proceedings pending , on appeal or concluded against MFG or its principals within the five years preceding the date of this Memorandum that MFI would deem material for purposes of Part 4 of the Regulations of the Commodity Futures Trading Commission, except as follows:
In May 2006, MFI was sued by the Receiver for Philadelphia Alternate Asset Fund ("PAAF") and associated entities for common law negligence, common law fraud, violations of the Commodity Exchange Act and RICO violations ("the Litigation").
In December, 2007, without admitting any liability of any party to the Litigation to any other party to the Litigation, the Litigation was settled with MFI agreeing to pay $69 million, plus $6 million of legal expenses, to the Receiver, in exchange for releases from all applicable parties and the dismissal of the Litigation with prejudice. In a related action, MFI settled a CFTC administrative proceeding (In the Matter of MF Global, f/k/a Man Financial Inc., and Thomas Gilmartin) brought by the CFTC against MFI and one of its employees for failure to supervise and record keeping violations. Without admitting or denying the allegations, MFI agreed to pay a civil monetary penalty of $2 million and accepted a cease and desist order. MFI has informed the General Partner, the Trading Advisor and the Placement Agent that the settlements referenced above will not materially affect MFG or its ability to perform as a clearing broker.
On February 20,2007, MFI also settled a CFTC administrative proceeding (In the Matter of Steven M. Camp and Man Financial Inc., CFTC Docket No. 07-04) in which MFI was alleged to have failed to supervise one of its former associated persons (AP) who was charged with fraudulently soliciting customers to open accounts at MFI. The CFTC alleged that the former AP misrepresented the profitability of a web-based trading system and of a purported trading system to be traded by a commodity trading advisor. Without admitting or denying the allegation, MFI agreed to pay restitution to customers amounting to $196,900.44 and a civil monetary penalty of $120,000. MFI also agreed to a cease and desist order and to strengthen its supervisory system for overseeing sales solicitations by employees in connection with accounts to be traded under letters of direction in favor of third party system providers.
On March 6, 2008, and thereafter, 4 virtually identical proposed class action securities suits were filed against MF Global Ltd., certain of its officers and directors, and Man Group plc. The complaints allege that the registration statement and prospectus issued in connection with MF Global Ltd’s initial public offering in July 2007, were materially false and misleading to the extent that representations were made regarding the company’s risk management policies, procedures and systems. The allegations are based upon the company’s disclosure of $141.5 million in trading losses incurred in a single day by an associated person in his personal trading account, which losses the company was responsible to pay as an exchange clearing member.
MFG acts only as clearing broker for the futures accounts to be traded pursuant to this Memorandum and as such is paid commissions for executing and clearing trades. MFG has not passed upon the adequacy or accuracy of this Memorandum and will not act in any supervisory capacity with respect to the General Partner of the commodity pool or to the Commodity Trading Advisor, as the case may be, nor participate in the management of the General Partner or of the commodity pool or of the Trading Advisor. Therefore, prospective investors should not rely on MFG in deciding whether or not to participate in the commodity pool or the trading program of the Trading Advisor.
* * * *
This information is provided solely to assist you in complying with Part 4 of Commodity Futures Trading Commission Regulations, and does not constitute an undertaking to update this information in the future. We will, however, provide an update to this information upon receipt of a written request for such information.
PRINCIPAL RISK FACTORS AND OTHER CONSIDERATIONS
In addition the risks inherent in trading commodity interests pursuant to instructions provided by the CTA, there exists additional risk factors, including those described below, in connection with a client advised by the CTA. Perspective clients should consider all of the risk factors described below and elsewhere in this Disclosure Document before making a decision to participate.
Risk of Options: Options buyers have the right, but not the obligation, to take delivery of the underlying futures contract at the determined strike price. Sellers have the obligation to deliver the underlying in the event that the option is exercised.
Option trading may not be less risky than trading outright futures contracts. There is a difference in risk exposure between purchasing options and selling options. Unlike option buying, selling involves unlimited loss potential and limited profit potential. However, buyers of options can only lose the premium that they paid for the option plus commissions and fees associated with the purchase.
If you sell a commodity option, you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain a position. Option selling involves theoretical unlimited risk. You may be called upon, by your broker to deposit a substantial amount of additional funds on short notice. Not doing so could result in liquidation of your positions; you will be responsible for any debit in your account balance. COMMODITY TRADING IS SPECULATIVE AND VOLATILE. Price movements for commodities are influenced by, among other things, changing supply and demand relationships: trade, fiscal, monetary, and exchange control programs, and policies of governments; United States and foreign political and economic events and policies; changes in national and international interest rates and rates of inflation, currency devaluation and reevaluations; and emotions of the market place. None of these factors can be controlled by the commodity trading advisor and no assurance can be given that any advice will result in profitable trades for a client or that the client will not incur losses.
Risk of Option Trading: Option trading plays a dominant role in our trading strategy. It is important to note, that option trading may not be less risky than trading outright futures contracts. Additionally, selling options involves unlimited loss potential and limited profit potential.
The option market will likely offer less liquidity than that of any given futures contract. Thus, entry and exit may see considerable slippage in extreme market conditions. Because short option trading involves margin, your broker may ask you to deposit a substantial amount of additional funds should a margin call occur. Not doing so could result in liquidation of your positions you will be responsible for any debit in your account balance.
Risk of Day Trading: From time to time, a portion of the CTA’s trading may include "day trading". Day trading occurs when a commodity futures or option contract is bought and sold with in the same day. Since day trades may occur, the risk of increased commissions exists due to an increase in the frequency of trades. Further, in the event these positions are held over night, the margin required to maintain the positions would be increased. The frequency of trading will depend on market volatility and the Net Asset Value of the account at any given time.
Commodity Trading is Highly Leveraged. The low margin deposits normally required in commodity trading (typically between 2% and 15% of the value of the contract purchased or sold) permit an extremely high degree of leverage. Accordingly, a relatively small price movement in a contract may result in immediate and substantial losses to the investor. The commodity trading advisor does not expect to margin more than 50% of an account’s net assets on a daily basis. Subject to margin volatility, this percent could be greater with regard to any given account net asset value.
Commodity Trading may be Illiquid. It is not always possible to execute a buy or sell order at the desired price, or to close out an open position, due to market illiquidity. Such illiquidity may be caused by intrinsic market conditions (lack of demand or overabundant supply) or it may be the result of extrinsic factors like the imposition of early price fluctuation limits (which set a floor and ceiling on the price at which a trade may be executed. The risk of loss in trading futures and options can be substantial. Therefore; you should carefully consider whether such trading is suitable for you.
Participating Client’s Futures Commission Merchant may Fail, (FCM). Under CFTC regulations, FCMs are required to maintain client’s assets in a segregated account. If FCM fails to do so, the client may be subject to a risk of loss of some or all of the funds on deposit with the client’s FCM in the event of its bankruptcy. Thus, in the case of FCM bankruptcy a client may not receive any of their deposited funds. In addition, even if the FCM does properly segregate client’s accounts, a client may be subject to a risk of loss of the funds on deposit with the client’s FCM. In the case of any such bankruptcy or client loss, a client might recover, in respect of property specifically traceable to the client, only a pro rata share of all property available for distribution to all of the FCM’s clients.
Trading on Foreign Commodity Exchanges. EcoFutures currently does not, but may in the future engage in trading on commodity exchanges outside the United States. Trading on such exchanges is not regulated by any United States governmental agency and may involve certain risks not applicable to trading on United States exchanges. For example, some foreign exchanges, in contrast to United States exchanges, are "principals’ markets" in which performance is the responsibility only of the individual member with whom the trader has entered into a futures contract and not of an exchange or clearing corporation. Moreover, such trading may be subject to whatever regulatory provisions are applicable to transactions effected outside the United States, whether on foreign exchanges or otherwise. Trading on foreign exchanges involves the additional risk of expropriation, burdensome or confiscatory taxation, moratoriums, and investment controls or political or diplomatic events which might adversely affect EcoFutures trading activities. Trading on foreign exchanges is also subject to the risk of changes in the exchange rate between United States dollars and the currencies in which contracts traded on such exchanges are settled. Some foreign futures exchanges require margin for open positions to be converted to the local currency of the contract. Whenever margin is held in a foreign currency, the client is exposed to potential gains and losses if exchange rates fluctuate. Although the CFTC is prohibited by stature from promulgating rules which govern in any respect, any rule, contract term or action of any foreign commodity exchange, the CFTC has full authority to regulate the sale of foreign futures contracts within the United States and has adopted regulations which may restrict the Clients for whom, or counterparties with whom EcoFutures may trade, and the contracts and markets on which EcoFutures trades, which may have an impact on future performance results.
Proprietary Trading: The CTA and its principals reserve the right to trade for its own accounts. Customers will not be allowed to inspect the records of the CTA or principals accounts.
The customer understands that the CTA and/or its principals or representatives may have a position in or may intend to buy or sell a commodities or commodity futures contracts which are the subject of market recommendations furnished to the customer, and that the market position of EcoFutures or its principals or representatives may or may not be consistent with the recommendations furnished to the customer by the CTA.
As of the date of this disclosure document Paul Trentalange does have a proprietary trading account with MF Global. EcoFutures LLC does not currently have a Proprietary trading account.
Conflict of Interest: A potential conflict of interest could arise where Paul Trentalange or EcoFutures, LLC CTA representatives take a position in their own proprietary account that is opposite or ahead of the position taken by the client. A potential conflict of interest could arise in the priority of order entry where Paul Trentalange or representatives take a position in their proprietary account in the same contract and contract months and Trentalange or CTA representative’s orders are filled prior to the clients.
A potential conflict of interest could arise since the CTA advises more than one account. Speculation position limits allow EcoFutures LLC CTA to control a limited number of contracts in any one commodity. The CTA is potentially subject to a conflict among the interests of all the accounts EcoFutures advises which are competing for shares of that limited number of contracts. The conflict exists between the client’s interest in maintaining a larger position in a specific commodity and EcoFuture’s interest in maintaining a smaller position in an individual client’s account in order to also provide positions in the specific commodity to other accounts under management and EcoFutures and its principal’s accounts.
Additionally, EcoFutures management of other client’s accounts could increase the level of competition for the same trades selected by Paul Trentalange for clients and could affect priority of order entry. Due to price volatility, occasional variations in liquidity, and differences in order of execution, it is not always possible for the CTA to obtain an identical trade execution for all of its clients. Although unintentionally, such variations and differences may produce differences in the performance of clients’ accounts over time. In order to treat its clients fairly when block orders for clients’ accounts are filled at different prices, the CTA will assign trades on a predetermined, fair and systematic basis among all accounts it manages based on information about order execution it receives for the FCM carrying the client accounts managed by the CTA.
The principal(s) may trade for their own accounts. Orders for the aforementioned accounts may not be part of a block order but might be placed before or after other orders for clients’ accounts and might or might not obtain more favorable order execution. EcoFutures principals or members will never intentionally receive a better fill then a client. At this time EcoFutures requires the use of MF Global to act as a clearing broker to execute trades on behalf of CTA. The CTA is unaware of any potential conflict of interest beyond the scope of those discussed above. MF Global will also act as an FCM and Clearing Broker to execute trades on behalf of the CTA.
Tape Recording. The CTA in their sole role and absolute discretion, may record on tape or otherwise, any telephone conversations between any of the CTA’s employees and the client or any other employees or agents of the client. The client hereby agrees and consents to such recordings and waives any and all rights to object to the admissibility into evidence of any such recording in any legal proceeding between the CTA and the client, or any employees or agents of the client, or any proceeding brought by any exchange, self regulatory organization or government agency.
Consent to Jurisdiction. All actions or proceedings arising with respect to any controversy arising out of their Agreement effected for Client’s account(s) shall be litigated at the discretion and election of the CTA only in courts whose site is within the State of California. Client shall accept court service of process by registered and certified mail addressed to the address set forth below to this Agreement and any such service shall constitute personal service of such process. Client waives any right Client may have to transfer or change the venue of any litigation brought against Client by the CTA.
Governing Law. This Agreement and all transactions subject to this Agreement, shall be governed by the Commodity Exchange Act, as amended: the rules, regulations and orders promulgated under such Act by the Commodity Futures Trading Commission, the rules of the Nation Futures Association, and where applicable the Laws of the State of California. If any provision is found unenforceable, then this Agreement shall be enforced and construed as if that invalid portion did not appear herein. The Client may bring arising out of transactions under this Agreement no action, regardless of form, more than two years after the cause of the action arose.
TRADING PROGRAM
The following description of EcoFutures (advisor) and its trading methods and strategies is general and is not intended to be exhaustive. Commodity trading methods are proprietary and complex, so only the most general descriptions are possible; no attempt has been or could be made to provide a precise description of Advisor’s strategy.
While Advisor believes that the description of its methods and strategies included herein may be of interest to prospective Clients, such persons must beware of the inherent limitations of such description. Advisor from time to time may change or refine the trading systems employed.
Diversified-
Minimum investment $50,000
The advisor uses a fundamentally based discretionary approach to trading. Our trading decisions are determined by first analyzing global events and general economic factors as well as studying fundamental supply and demand factors. We employ a trading system that involves technical trend analysis and money management principles. Our fundamental, technical, and statistical analyses are used to determine the parameters of the trades, taking into account the most favorable risk/reward scenario.
THE TRADING ADVISOR IS FREE TO TRADE ALL DOMESTIC AND FOREIGN FUTURES AND OPTIONS, IE. NYBOT, (COTTON, COFFEE, ORANGE JUICE AND SUGAR) CBOT, (GRAINS, METALS, INTEREST RATES, OTHERS) AS SEEN FIT BASED ON THE AVAILABLE MARGIN OF ALL HOLDINGS. A TRADING OPPORTUNITY IS SIGNALED WHEN ITS’ PRICE REACHES A CERTAIN LEVEL DETERMINED BY THE TRADING SYSTEM. THE TRADING SYSTEM HAS A PREDEFINED PROFIT GOAL AND RISK EXPOSURE. STOP-LOSS MEASURES ARE UTILIZED AS WELL AS THE USE OF DERIVITIVE HEDGING TECHNIQUES TO QUANTIFY MARKET EXPOSURE. THE SYSTEM INCORPORATES THE USE OF MONEY MANAGEMENT STOPS TO HELP LIMIT RISK. STOP ORDERS HOWEVER, WILL NOT NECESSARILY BE EFFICTIVE IN LIMIT MARKETS OR IN FAST MOVING MARKETS. MARKET CONDITIONS ARE MONITORED FOR LIQUIDITY, RANGE OF MOVEMENT AND IMPLIED VOLATILITY MEASURES AGAINST HISTORICAL VOLATILITY. IN DOING SO, THE ADVISOR EMPLOYS MONEY MANAGEMENT SKILLS ACQUIRED OVER YEARS OF EXPERIENCE. THE LIQUIDATION LEVEL IS DETERMINED BY MARKET PARAMETERS AND MAY BE EITHER A PROFIT TAKING OR A STOP-LOSS POINT.
FEES AND EXPENSES. EcoFutures CTA may charge a monthly management fee based on the month-end equity of the Clients account and a monthly incentive fee on Net Trading Profits. CTA fees that are applicable to each account are specifically described in each Client’s Trading Agreement. Because EcoFutures may structure each account (including the applicable fees) to meet specific Client needs, the foregoing description of EcoFutures fees represents a general guideline only.
Commissions: All accounts traded through the recommended FCM MF Global Clients will pay a commission rate of no more than $12.50 plus fees per option contract, (per side) that is initiated, as well as no more than $12.50 plus fees rate (per side), for all futures contracts executed. Fees included are exchange fees, ranging approximately 2 to $4 for CME and CBOT trades and $4 to $7 for NYBOT NYMEX and COMEX. (Refer to page 6 for Risks of Day Trading)
Net Asset Value (NAV): The NAV calculates the assets minus liabilities plus or minus the value of open positions when marked-to-the market.
Management Fee: Ecofutures will charge a maximum of 1/12 of 2.25% of the month end net asset value of a Clients’s account, including open trade equity and prior to reduction for incentive fees. Management fees, in months that additions are made to Client’s account, shall be time-weighted based on the day of the month in which funds are traded.
Incentive Fee: EcoFutures receives a monthly Incentive Fee of 10%. Clients will pay Incentive Fees only on the Net Trading Profits recognized by its capital account. With respect to each Client’s account, "Net Trading Profit" for any given month, is the net realized and unrealized trading profits on the assets of such capital account, less brokerage commissions, floor brokerage, transfer fees, NFA and exchange fees, less any net trading loss from a previous month or months.
Incentive Fees are first payable as of the end of each month with respect to a Client’s account and will be calculated for the period since the commencement of trading. Each Client must sign a Trading Agreement, which allows the Futures Commission Merchant (FCM) to deduct such fees directly from their accounts.
If any payment of Incentive Fees is made to EcoFutures on account of Net Trading Profits earned by a Client’s account and such Client’s account thereafter fails to earn Net Trading Profits or experiences losses for a subsequent month (as described above), EcoFutures will be entitled to retain any Incentive Fees previously paid to EcoFutures in respect of such Net Trading Profits. However, no subsequent Incentive Fees will be payable until such Client’s accounts has again earned Net Trading Profits; provided, however, that if Net Assets are reduced because of withdrawals which occur in a month, in which a Client’s account experiences a trading loss, the trading loss for that month, which must be recovered before such Client will be deemed to experience Net Trading Profits will be equal to the amount determined by (x) dividing Net assets after such withdrawals by the Net Assets immediately before such withdrawals and (y) multiplying that fraction by the amount of the un-recovered trading loss experienced in the calendar month prior to such withdrawals. In the event that the Client experiences a trading loss in more than one month without the payment of an intervening Incentive Fee and the Net Assets of such Client’s account are reduced in more than one such month because of withdrawals, then a adjustment to the trading loss for the month may be made in accordance with the formula described above and only such reduced amount of trading loss will be carried forward and used to offset subsequent trading profits.
Fees and Expenses
A client’s account will have to earn substantial trading profits to avoid depletion of their funds due to such commissions, costs, and fees. The CTA does not expect Brokerage Commissions to exceed 10% of an account’s Net Asset Value on any given month. A client is responsible for bearing any and all expenses; losses and fees incurred as a result of maintaining and having the CTA trade the client’s account. In the Client Agreement (copy enclosed), the client agrees to indemnity and hold harmless the CTA and any future shareholders, directors, officers, employees, principals, affiliates, and agents in that regard.
Miscellaneous
If a client withdraws from the CTA on a date other than at the end of a calendar month, incentive fees will be calculated and billed as if such termination dates were at the end of the month. At this time, the clients’ obligations to pay future fees will terminate. A client is not entitled to a refund of any management fees and/or incentive fees paid or accrued to the date of their withdrawal from the program.
Litigation
Neither EcoFutures nor Paul Trentalange has ever been party, nor are there any pending, to any material, administrative, civil or criminal proceedings or actions.
CONCLUSION: In view of the foregoing, a prospective client of the CTA should consider carefully the highly speculative nature risks of loss inherent in trading the financial futures and trading markets. A client should be financially capable of accepting such risks and engaging in such trading. A client should have significant resources beyond any funds which they deposit in the commodity trading account to be advised by the CTA and such fund should represent risk capital to the client.
I (WE) hereby acknowledge that I (we) have received, read, and understand the Disclosure Document for EcoFutures, LLC. Dated _____________________,
Including Investment Management Agreement, Privacy Statement, Fee Payment Authorization, and have carefully considered the matters outlined and referred to therein in determining whether to open a commodity trading account advised by EcoFutures LLC, CTA.
_______________________________________
Client Signature
________________________________________
Client Name (Print)
________________________________________
Date
________________________________________
Joint Party Signature
________________________________________
Joint Party Name (Print)
________________________________________
Date
ECOFUTURES LLC CTA
4550 NORMA DRIVE
SAN DIEGO, CA 92115
619 922-5064
EMAIL:
info@ecofuturesfund.com
Investment Management Agreement
This agreement is entered into between EcoFutures LLC., herein referred to as the ‘Advisor’, and an individual, partnership, corporation, trust or other legal entity, herein referred to as the ‘Client’, whose signature herein appears below on page 16 of this agreement. Commencement date of this agreement will begin on the latest signature date of either the Advisor or Client as shown on page 16 of this agreement. In consideration of the mutual covenants, conditions, promises and other good and valuable consideration set forth herein, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Acknowledgements of the Advisor
A) The Advisor shall trade the Clients account(s), pursuant to the trading authority granted to the Advisor in this agreement.
B) The Advisor will use his best efforts to secure profits for the Client through trading activities and will act only in the best interests of the Client in furnishing trading advice and will act only in the best interest of the Client in furnishing trading advice and services in a manner consistent with the program outlined in the Disclosure Document above.
C) The Advisor agrees that he will not take any action in fulfilling his advisory obligation to other clients as would unfairly affect the Client’s trading.
D) The Advisor may in the future develop amendments to the trading program currently in use and in all likelihood, employ them for all accounts managed by the Advisor. The Advisor will not notify its clients of any modifications to existing strategies or the addition of new strategies, unless specifically requested by the Client or considered to be material by Advisor.
2. Acknowledgements of the Client
A) The Client is fully advised as to the speculative nature in allocating funds to the Advisor
B) The Client acknowledges and is aware that any trading account opened by the Client
with clearing members of a futures exchange or any financial institution must meet all requirements imposed by such exchange, firm or institution. Opening an account with an exchange firm, or institution does not constitute approval of any trading program or system of the Advisor.
C) The Client acknowledges and is fully aware that the Advisor, as a part of regular business, may enter into advisory agreements with various clients that may differ from this agreement. The Advisor’s performance of such services is agreeable and acceptable to the Client.
3. Obligations of the Client
In order to assist in effecting the provisions and objectives of this agreement, the Client shall have the following obligations:
A) The Client will open a trading account with a brokerage firm and the account will be carried
by the brokerage firm in the Client’s name or number as a managed trading account. The
Client shall bear all brokerage fees and expenses associated with the trading of his account.
B) The Client shall not authorize, direct or effect any trading involving the funds of the managed
account during the existence of this agreement and related power of attorney or similar auth-
orization. Further, the Client shall not withdraw any funds from the managed account
without giving notice (either verbal or written) to the Advisor prior to any such withdrawal.
C) Client hereby appoints the Advisor an appropriate limited power of attorney and/or such
other authorization as may be required by the brokerage firm or financial institution where
Client accounts are held. Client will grant sufficient authority to the Advisor to carry out the
purposes of this agreement and to execute such other authorizations the brokerage firm,
Advisor or any exchange may request from time to time. Such limited power of attorney or
other authorization shall appoint the Advisor as the sole and exclusive agent of the Client’s
account with respect to buying or selling (including short sales) market interests as defined
in the Advisor’s Disclosure Document. Trading in futures contracts, commodities, and
commodity options, all at such times, in such amounts and at such prices as the Advisor
may deem prudent. The Advisor is to communicate such orders directly to the brokerage
firm or financial institution and such firms shall be authorized to accept and execute such
orders. The Advisor, on behalf of the Client, may invest any assets of the account in
government obligations and/or any money market funds offered by any firm holding
the account of the Client. The power of attorney or other authorizations shall be a
continuing power and shall remain in full force until the termination of this agreement
but the termination of this agreement shall not affect any transaction initiated prior to
such termination. The Client agrees that the power of attorney or other authorization
will not be cancelled during the effectiveness of this agreement.
The Client will also execute any other reasonable documentation necessary to properly
effect the provisions of his agreement. Such limited power of attorney granted to the
Advisor will be deemed to terminate with the termination of this agreement and will
not require written notice.
D) It is agreed the following matters are the responsibilities of the Client and brokerage firm handling the account:
1) To carry the managed account in the name or number designated by the Client;
2) To designate the managed account on the books of the brokerage firm as an account
managed by the Advisor;
3) To see that each trade executed for the managed account is designated as a trade
executed for an account managed by the Advisor;
4) To handle any loss, deficiencies for margin calls directly between the client and the
brokerage firm on a timely basis;
5) To make and deliver regular reports of trades and report of account balances to the
client and to the Advisor
6) To make any required reports to an exchange regarding the existence of any
managed account;
7) To see that all trades selected by the Advisor and reported to the brokerage
firm are properly effected;
8) To expedite payment of all fees owed to the Advisor under the terms of this
agreement.
4. Termination of the Investment Management Agreement
A) The term of this agreement will be on a day-to-day basis and either party, without
cause, for any reason may terminate it. Notice of termination may be conveyed
verbally or in writing between the Client and Advisor. If a Client contacts the
brokerage firm or financial institution to terminate this agreement, it will not constitute
a legal termination.
B) Upon giving or receiving notice of termination, the Advisor may cease entering orders for
the account or he may (in his sole discretion), order all or any part of the open positions in the
account to be liquidated. Thereafter, the Client accepts full responsibility for existing positions
in the account at that time and the Advisor is not responsible to render any further services
concerning the account.
5. Notices and Assignabilities
A) All notices relevant to the terms of this agreement shall be in writing and shall be delivered in
person, by facsimile, by email or sent by registered mail. Notices intended for the Client of the
of the Advisor shall be sent to the addresses, facsimile telephone number or email address
shown in this agreement. Notices sent to the Advisor from the Client without a confirmation
that they were in fact delivered does not legally bind the Advisor.
B) The Advisor may assign all or any rights and responsibilities from this agreement to any firm,
partnership, corporation or other legal entity with which the Advisor is affiliated as a principal
employee, if it is in the authority of the Advisor’s company operating agreement to do so.
6. Relationship to Parties
The relationship between the Advisor and the Client shall be limited to this agreement and for the
purposes of managing the Client’s account for the benefit of the Client. The Advisor is an independent
contractor and this agreement shall not be deemed to establish a joint venture between the Advisor and
the Client. Nothing herein contained shall be construed as creating a general partnership or other similar
relationship or as authorizing any party to act as a general agent or to enter into any contract or other
agreement on behalf of any other party.
7. Management of Account; Performance is Not Guaranteed
The Advisor agrees to manage the account for the Client’s benefit and to initiate buy, or sell or spread
orders for market interests. The Client shall bare all risk of gain or loss in the account and all expenses
of this account. No assurance can be given that Advisor’s advice will result in profits for the Client or
that the Client will incur losses or that losses will be limited. The Advisor is not qualified to give any
advice with respect to the tax treatment of profits or losses in the account. The Advisor cannot
guarantee that trading will stop at specific levels of equity as predetermined by Client. The Advisor
recommends that the Client should make the decision to cease trading rather than have the Advisor
cease trading the program when a specified equity level is reached or at a specific point in time. Neither
the Advisor nor any of its affiliated entities or parties will be held liable under such conditions.
8. Client’s Representations
A) The Client is aware of the speculative nature and risk of loss inherent in the market interest
specified by the Advisors Disclosure Document and states to be financially, intellectually
and emotionally capable of engaging in such activity. All funds in the account represent
risk capitol to the Client and Client understands there is the potential for a significant risk
of loss in participating with the Advisor.
B) The Client has additional resources beyond the value of the account and any such funds may
in the future be committed to the account.
C) The Client recognizes that the Advisor may request and obtain information concerning the
suitability standards of all his clients. Such information will be considered confidential by
the Advisor except in those cases of review as required by industry regulators.
9. Non-Exclusive Advice
The Advisor’s services are not exclusive and the Advisor will render similar services to others and
such services will often be based upon the same advice. The Client acknowledges the advice given
by the Advisor is the confidential property of the Advisor and the Client will not disclose the same
to third parties without the prior written consent of the Advisor.
10. This written agreement constitutes the entire agreement among the parties hereto and may be amended
only by a written amendment executed by the parties hereto. This agreement shall be governed by and
construed in accordance with the laws of the state of California and the United States and cannot be
changed orally, shall inure to the benefit of and bind upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns. The captions in this agreement are inserted as a
matter of convenience and for reference only and shall not define, limit or describe the scope and
intent of any of the provisions of this agreement.
11. Compensation of Advisor
A) The Advisor will send all statements of incentive fees (when applicable) directly to the broker-
age firm or FCM holding the Client’s account. All incentive fees charged by the Advisor will
automatically be shown as a matter of record on the client’s daily and month end account state-
ment as prepared by the FCM. Direct debit of the Client’s account will establish a written
record of billing and payment to the Advisor for incentive fees. Incentive fee billing statement
will be sent to the brokerage firm or FCM on or after the 1
st
of the following month in which
incentive fees are due. The brokerage firm or FCM agrees to ensure prompt delivery of such
fees owed to the advisor, within 7 calendar days after receipt of invoice, by direct debit of the
balance from the Client’s account. Any obligations of payment for fees by the Client to the
Advisor will not be waived if the Client’s account, relevant to this Agreement is terminated
and the account equity balance is transferred to another location. The Client hereby agrees
with the Advisor, and instructs the brokerage firm or FCM to pay the Advisor out of the assets
in the Client’s account, upon receipt of a billing statement from the Advisor. The Client and
Advisor hereby jointly and severally agree to indemnify all financial companies associated with
the implementation of this agreement, including the brokerage firm or FCM, and to hold them
harmless from any loss or claim associated with any payment of fees from the account, if the
payment is subsequently shown to be in error or subject to dispute.
B) In the event that either party terminates this agreement, incentive fees will be computed and
payable based on new profits in the client’s account up to the effective date of termination.
C) In consideration for advisory and management services provided by the Advisor, it is under-
stood the Client under one of the following fee arrangements will compensate the Advisor.
1. Management Fee 2.25%,---Incentive Fee 10% of new Net Trading Profits (both
realized and unrealized, minus order execution fees) marked to the market at the
end of the last trading day of the calendar month. Net Trading Profits will include
accrued earned interest (if any) and will be calculated from the last incentive fee
period or from the beginning balance as applicable. The Client will commence
paying incentive fees at the end of the calendar month, following the first trade
that is entered in the Client’s account by the Advisor and monthly thereafter as
applicable. Incentive Fees are not refundable in the event of a loss in the account
in subsequent months, however no subsequent Incentive Fees will be payable
until such Client’s account has again earned Net Trading Profits (as described on
page 9 of the Advisor’s Disclosure Document).
2. Alternative Incentive Fee Agreement should be attached, if applicable, and signed
by all parties.
THE CLIENT AND THE ADVISOR MUST RETAIN SIGNED COPIES OF THIS DOCUMENT. PLEASE RETURN THE ORIGINAL PAGES OF THIS ENTIRE INVESTMENT MANAGEMENT AGREEMENT, INCLUDING THE SIGNATURE PAGE (6 PAGES) ALONG WITH THE PRIVACY STATEMENT.
WITH THE SIGNATURE (S) BELOW AND BY DEPOSITING FUNDS WITH THE FCM, CLIENT(S) ACKNOWLEDGE(S) THEIR ACCEPTANCE OF ALL OF THE ABOVE TERMS AND CONDITIONS OF THIS AGREEMENT, INCLUDING HAVING RECEIVED A COPY OF THE CURRENT DISCLOSURE DOCUMENT.
CLIENT SIGNATURE (S) ______________________________________________________
_______________________________________________________
CLIENT PRINTED NAME (S) ________________________________________________________
_______________________________________________________
ADDRESS ________________________________________________________
TELEPHONE _______________________________________________________
FAX _______________________________________________________
EMAIL _______________________________________________________
DATE _______________________________________________________
FCM _______________________________________________________
ACCOUNT NUMBER ______________________________________________________
INITIAL SIZE OF ASSET ALLOCATION ________________________________________________
ECOFUTURES LLC. _______________________________________________________
Paul Trentalange, Principal
DATE ______________________________________________________
EcoFutures LLC, CTA
4550 Norma Drive
San Diego, CA 92115
PRIVACY STATEMENT
Pursuant to the Commodity Futures Trading Commissions new rules, financial institutions like ECOFUTURES are required to provide privacy notices to their clients. We at ECOFUTURES
consider privacy to be fundamental to our relationship with our clients. We are committed to
maintaining the confidentiality, integrity, and security of our current and former clients’ non-
public information.
Accordingly, we have developed internal policies to protect confidentiality while allowing clients’
needs to be met. We will not disclose any non-public personal information about clients, except
to service providers as required by applicable law or regulation. In the normal course of serving
our clients, information we collect may be shared with companies that perform various services such
as accountants or auditors. Specifically, we may disclose to these service providers non-public
personal information including:
Any party that receives this information will use it only for the services required and as allowed by
Applicable law or regulation, and is not permitted to share or use this information for any other
purpose. To protect the personal information of individuals, we permit access only by authorized
employees who need access to that information to provide services to our clients and us.
In order to guard clients’ non-public personal information, we maintain physical, electronic and
procedural safeguards that comply with the U.S. federal standards. If the relationship between a
client and ECOFUTURES ends, ECOFUTURES will continue to treats’ personal information as
described in this notice. An individual client’s right to privacy extends to all forms of contact with
ECOFUTURES including telephone, written correspondence and electronic media, such as the
Internet. ECOFUTURES reserves the right to change this privacy notice, and to apply changes to
information previously collected, as permitted by law. ECOFUTURES will inform clients of any
such changes as required by law.
CLIENT SIGNATURE (S): _______________________________________________________
_______________________________________________________
DATE: ___________________________________________________
FEE PAYMENT AUTHORIZATION
MF GLOBAL
In connection with my commodity trading account (Number _____________________) carried by you, you hereby are authorized to deduct and pay to ECOFUTURES CTA ("CTA") such incentive and management fees ("FEES") as it may specify in writing to you from time to time. The CTA shall be solely responsible for determining the amount of such fees, and you are hereby directed to comply with instruction you receive from CTA without further direction or confirmation for the undersigned. This fee payment authorization shall remain in effect until terminated in writing by the undersigned.
__________________________________ ______________________________________
Client Signature Joint Party Signature
__________________________________ ______________________________________
Client Name (Print) Joint Party Name (Print)
__________________________________ ________________________________________
Date Date