NFA takes enforcement action against KS Global Strategies and Khaled Salama

The National Futures Association (NFA) said on November 19 that it had taken emergency action against KS Global Strategies, Inc. (KS Global Strategies), a commodity pool operator (CPO) and commodity trading adviser (CTA) located in Larkspur, California, and its principal, Khaled Salama.

NFA took action against the company and Salama due to a series of money transfers with affiliated entities and pools, which resulted in at least $410,000 worth of prohibited loans being made to Salama and KS Global Strategies by commodity pools they operated.

During the course of its investigation, NFA learned that KS Global Strategies and Salama arranged loans from one of the firm's commodity pools, the Sophia Fund, then funnelled the loans through an affiliated fund (the Roosevelt Fund) to another pool, the KSGS Global Opportunities Fund, in an apparent attempt to conceal them. NFA Compliance Rule 2-45 prohibits loans from commodity pools to their CPOs.

KS Global Strategies and Salama are ordered to repay in full all existing direct and indirect loans or advance of pool assets to KS Global Strategies, Salama, or any affiliated person or entity within 120 days of the issuance of the enforcement action.

Additionally, KS Global Strategies and Salama are prohibited from soliciting or accepting any customer or pool participants funds until the loans are paid in full. They are also prohibited from disbursing or transferring any funds (other than to margin existing positions) from any customer and/or pool accounts without prior approval from NFA.

The action against the two will remain in effect until KS Global Strategies and Salama demonstrate to the satisfaction of NFA that they are in complete compliance with all NFA requirements. This includes complete compliance with NFA Compliance Rule 2-45. KS Global Strategies and Salama may request a hearing before NFA's Hearing Committee.