My feeling is that her fanboyz keep bringing up the metrics she cites in her 2015 Tasty Trade interview and other media interviews and press releases from her office and the fanboyz consume and distribute her bullshit as facts - but maybe they were unaware or blind to the 2016 SEC filing says that NFA performed an extensive audit, that she lost $50M+, and was over a protracted period of time executing option spreads in a timed fashion in unison with her regular client P&L reporting - but ONLY REPORTING TO HER CLIENTS the option leg position that offset the loss. And of course both NFA and SEC also claimed that she was pumping trades and timing those trades to boost management fee calculation schedules.
Point being, through this thread and others the Karen fanboyz kept taking what she personally stated AS FACT. Clearly it wasn’t. What do we know as fact? The NFA audit which the SEC used in their filings. If Karen could have produced material accounting and FCM statements that exonerated her, she wouldn’t have agreed to the SEC’s judgement against her two months ago. Karen agreed with the SEC, and in the consent decree Karen does not deny any of the SEC allegations of fraud and wrongdoing. And as of 10/31/2018 she is no longer registered with the NFA/CFTC/SEC to manage client money.
Notice how after Karen paid a $100K fine a couple years ago that the SEC wasn’t done with her. The fanboyz thought that she was in the clear (just a bump in the road) but they were mistaken - the fanboyz ignored the fact that SEC never dropped their case. Even then if they had read the SEC filings they would have learned about the NFA audit. In September 2018 there was the consent judgement. But they’re still not done with her. There will be an SEC public hearing scheduled in the future. The SEC will decide her accounting and asset management future.
It was also mentioned in this thread that just because Karen paid a $100K fine to the SEC prior to this latest consent judgement/disgorgement/civil penalty that she’s somehow insulated from client litigation because her clients should have known better. I happen to hold an NFA Series 3 and can tell you nothing is further from the truth. That’s like saying that because a drunk driver hit and killed a woman then served three years in jail for manslaughter that the offender is immune from civil lawsuit from the victim’s family because he satisfied the Court’s jail sentence and parole requirements.
Fraud tends to void contracts like client/adviser investment pool agreements and risk disclosures.
The OP of this thread is jubilant that Karen hasn’t been sued by her clients. I’m not a lawyer. Now that Karen has quite recently agreed to the government’s allegations - if she has any personal wealth or assets to speak of I venture a safe guess that will change in a hurry. To find this out for sure, it would take an attorney with access to a civil suit database.
