A London-based hedge fund manager has settled charges from the National Futures Association that it failed to cooperate during an inspection. The NFA charged IKOS Partners, a hedge fund with $2.3 billion in assets under management and Martin Coward, a firm principal, with failure to cooperate fully with examiners and respond in a timely fashion to document requests. IKOS is also a commodity pool operator and commodity trading adviser registered with the NFA, and an investment adviser registered with the Securities and Exchange Commission.

The problem of IKOS' failure to adequately respond to examiners' requests was ongoing and persistent, said Ron Hirst, NFA associate general counsel in Chicago. The NFA examination of IKOS began last May and was conducted over the telephone and through e-mail because the firm is located in London and Cyprus. Examiners' inquiries were handled by Lucien Gover, assistant compliance officer. Gover frequently failed to provide documents requested by examiners, which necessitated follow-up conversations, the complaint stated. During July and August, Gover ceased to respond to e-mails and telephone messages from examiners. In response to a letter sent by examiners, Gover said he believed he had satisfied all the examiners' requests, the complaint stated.

On Nov. 8, the NFA asked for 20 outstanding document requests. "IKOS and Coward's failure to cooperate promptly...impeded NFA's audit and delayed its completion," the complaint stated. IKOS Partners settled without admitting or denying the charges on the condition that charges against Coward be dropped, which they were. On March 21, the NFA ordered IKOS to pay a fine of $25,000 and to appoint a senior staff person to serve as the contact person during an NFA audit and be responsible for providing timely responses to books and records requests. Richard Heffner, associate at Dechert and counsel for IKOS and Coward, declined to comment.