NFA Orders Spartan Asset Group to Exit Membership Over Deficient Promotional Materials

The US National Futures Association (NFA) has ordered Spartan Asset Group LLC, a Michigan-based commodity trading advisor, to withdraw from NFA membership and barred the firm from reapplying, following findings related to deficient promotional practices.

The decision was issued by an NFA Hearing Panel and stems from a complaint brought by the NFA's Business Conduct Committee. The outcome followed a settlement offer submitted by Spartan, in which the firm neither admitted nor denied the allegations outlined in the complaint.

According to the NFA, the case centered on promotional materials used by Spartan that failed to meet regulatory standards. The Committee alleged that the firm used marketing content it knew, or should have known, was deficient, violating NFA Compliance Rule 2-29 governing promotional material and Rule 2-4, which requires members to observe just and equitable principles of trade.

The complaint specifically alleged that Spartan and its principal, John Perry, presented hypothetical performance results on the firm's website without clearly labeling them as hypothetical. In addition, the materials did not include the required disclaimers explaining the limitations of hypothetical results or disclose the material assumptions used to generate those figures.

Regulators also said the firm failed to include adequate risk disclosures in sections of its website referencing actual trading profits. According to the NFA, Spartan did not sufficiently discuss the risk of loss or state that past performance is not necessarily indicative of future results, as required under NFA rules.

Further compounding the issue, the complaint alleged that Spartan and Perry were unable to demonstrate that performance results shown for four of the firm's trading programs were representative of actual client experience. This raised concerns that the figures could mislead prospective customers about realistic outcomes.

The NFA also found that Spartan continued to use the same deficient promotional materials even after it knew, or should have known, that they failed to comply with regulatory requirements.

The enforcement action underscores the NFA's continued focus on promotional accuracy and transparency, particularly around performance claims. For commodity trading advisors, the case serves as a reminder that hypothetical results, risk disclosures, and representativeness standards remain core compliance obligations, not optional marketing considerations.