CFTC Ex. 537

Case: 1:20-cv-03758 Document #: 77-21 Filed: 11/05/21 Page 1 of 10 PageID #:1361
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UNITED STATES DISTRICT 

COURT NORTHERN DISTRICT 

OF ILLINOIS EASTERN 

DIVISION

Commodity Futures Trading 

Commission,

Plaintiff,

v.

Long Leaf Trading Group, Inc., 

James A. Donelson, Timothy M. 

Evans, Jeremy S. Ruth, and 

Andrew D. Nelson,

Defendants.

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Case No. 20-3758

Hon. Thomas A. 

Durkin

Defendant Long Leaf Trading’s Answers and 

Objections to Plaintiff CFTC’s Second Set of Requests for Admission 

Pursuant to Rule 36 of the Federal Rules of Civil Procedure Defendant Long 

Leaf Trading Group, Inc. ("Defendant" or “Long Leaf”), by and through its attorney, 

James M. Falvey, Falvey Law Office, responds to Plaintiff CFTC’s (“Plaintiff” or 

“CFTC”) Second Set of Requests for Admission (“Request” or “Requests”) as 

follows:

General Statement & Objections

In certain Requests for Admission, below, Long Leaf made reasonable inquiry 

and the information it knows or can readily obtain is insufficient to enable it to admit 

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or deny the Request because, as to the time period prior to Mr. James Donelson 

becoming a principal of Long Leaf, there is limited information available. Mr. 

Donelson became a principal in December 2017 (the period of time from December 

2017 to December 2019 will be referred to as the “Donelson Period”). Where 

possible, for the period of time prior to Donelson becoming a principal, Long Leaf 

relied on its books and records to admit or deny such Request (the period of time 

prior to December 2017 will be referred to as the “Evans Period”). 

Long Leaf is of the view that a prior principal, and founder of Long Leaf, Tim 

Evans, may be the only person able to answer certain Requests. Tim Evans’ present

location is thought to be in Mexico. However, thus far, he has yet to be contacted by 

Long Leaf, nor the CFTC (as acknowledged by the CFTC in the Court hearing on

January 19, 2021, as well as in phone calls between Donelson’s/Long Leaf’s counsel

and the CFTC). Accordingly, should Evans become available and willing to shed

light on certain Requests, Long Leaf will supplement its responses. Also, if Long 

Leaf discovers additional facts, perhaps via a witness that has knowledge of facts 

currently unknown to Long Leaf, then Long Leaf will supplement its responses.

Specific Objections and Answers

24. Admit that Long Leaf Trading did not track the performance of 

the trades recommended pursuant to the trading program.

ANSWER: Long Leaf denies this Request for Donelson Period. After a 

diligent inquiry, Long Leaf is unable to answer this Request for the Evans 

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Period because it lacks knowledge or information sufficient to form a belief 

about the truth of the admission.

25. Admit that as of the date that James A. Donelson began recommending 

trades to Long Leaf Trading customers in connection with the trading program, 

Long Leaf Trading had not disclosed to customers or prospective customers that 

James A. Donelson had never previously recommended trades to any customer in 

any capacity, including as a trading principal.

ANSWER: Long Leaf objects to this Request as it states facts that are not 

accurate. Specifically, before Mr. Donelson began recommending trades, he worked 

with Scott Gecas on development and structure of trades during the first year of his 

ownership of Long Leaf. Without waiving the objection, Long Leaf denies this 

request.

26. Admit that, in any professional capacity (that is, in any capacity where 

James A.Donelson was being compensated for providing professional services), 

James A. Donelson had never designed or implemented options trading strategies

before December 1, 2017.

ANSWER: Long Leaf denies this Request. Mr. Donelson had designed 

hedging strategies for currency exposure while employed at GETCO Group. These 

strategies were ultimately not implemented.

27. Admit that any options trading that James A. Donelson conducted 

before December 1, 2017, in a personal capacity (that is, for his personal account 

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or for others withoutcompensation) resulted in net losses.

ANSWER: Long Leaf admits this Request as to the personal trading of Mr. 

Donelson. His personal trading of options were in the form of hedges, which resulted

in net losses.

28. Admit that Long Leaf Trading never disclosed to customers or 

prospective customers that James A. Donelson had no experience profitably trading

options in any capacity before December 1, 2017.

ANSWER: Long Leaf admits this Request.

29. Admit that Long Leaf Trading did not disclose to customers or 

prospective customers the largest monthly draw-down for the (i) life of the trading

program and (ii) year-to-date expressed as a percentage of client funds.

ANSWER: Long Leaf objects to this request as it is not relevant. That is, 

Long Leaf was not required to make these disclosures as an Introducing Broker

("IB”). These are requirements of a Commodity Trading Advisor (“CTA”) per 

the regulations and Long Leaf was not a CTA. Subject to the foregoing 

objection, Long Leaf admits that it did not make these disclosures to customers 

or prospective customers during the Donelson Period. As to the Evans Period,

Long Leaf is unable to answer this Request because it lacks knowledge or 

information sufficient to form a belief about the truth of the admission.

30. Admit that Long Leaf Trading did not ever attempt to identify or 

calculate its largest monthly draw-down for the trading program for the (i) life of 

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the trading program and (ii)year-to-date expressed as a percentage of client funds.

ANSWER: Long Leaf objects to this request as it is not relevant. That is, 

Long Leaf was not required to attempt to identify or calculate its largest 

monthly draw-down for the trading program for the (i) life of the trading 

program and (ii) year-to-date expressed as a percentage of client funds as an IB. 

These are requirements of a CTA per the regulations and Long Leaf was not a 

CTA. Subject to the foregoing objection, Long Leaf admits that it did not make 

these calculations during the Donelson Period. As to the Evans Period, Long 

Leaf is unable to answer this Request because it lacks knowledge or 

information sufficient to form a belief about the truth of the admission.

31. Admit that Long Leaf Trading did not disclose to customers or 

prospective customers the number of accounts opened and closed during the life of 

the trading program witha positive net lifetime rate of return as of the date the

account was closed.

ANSWER: Long Leaf objects to this request as it is not relevant. That is, 

Long Leaf was not required to disclose to customers or prospective customers 

the number of accounts opened and closed during the life of the trading 

program with a positive net lifetime rate of return as of the date the account was 

closed as an IB. These are requirements of a CTA per the regulations and Long 

Leaf was not a CTA. Subject to the foregoing objection, Long Leaf admits that 

it did not make these calculations during the Donelson Period. As to the Evans 

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Period, Long Leaf is unable to answer this Request because it lacks knowledge 

or information sufficient to form a belief about the truth of the admission.

32. Admit that Long Leaf Trading did not disclose to customers or 

prospective customers the number of accounts opened and closed during the life of 

the trading program witha negative net lifetime rate of return as of the date the 

account was closed.

ANSWER: Long Leaf objects to this request as it is not relevant. That is, 

Long Leaf was not required to disclose to customers or prospective customers 

the number of accounts opened and closed during the life of the trading 

program with a negative net lifetime rate of return as of the date the account

was closed as an IB. These are requirements of a CTA per the regulations and 

Long Leaf was not a CTA. Subject to the foregoing objection, Long Leaf 

admits that it did not make this disclosure during the Donelson Period. As to 

the Evans Period, Long Leaf is unable to answer this Request because it lacks 

knowledge or information sufficient to form a belief about the truth of the 

admission.

33. Admit that Long Leaf Trading did not attempt to calculate or track 

the lifetimerates of return for the customer accounts that participated in the 

trading program.

ANSWER: Long Leaf objects to this request as it is not relevant. That is, 

Long Leaf did not attempt to calculate or track the lifetime rates of return for 

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the customer accounts that participated in the trading program as an IB. These 

are requirements of a CTA per the regulations and Long Leaf was not a CTA.

Subject to the foregoing objection, Long Leaf admits that it did not make this 

disclosure during the Donelson Period. As to the Evans Period, Long Leaf is 

unable to answer this Request because it lacks knowledge or information 

sufficient to form a belief about the truth of the admission.

34. Admit that in 2019 Long Leaf Trading authorized its brokers to 

provide to prospective customers information concerning the performance of 

the trading program thatreflected positive net returns.

ANSWER: Long Leaf admits that it provided trade performance

information to prospective customers during 2019 based on actual results of 

trades made by Long Leaf. To the extent that the Request seeks any additional 

information, it is denied.

35. Admit that in connection with the trading program Long Leaf Trading 

tailored itstrading recommendations to specific customer accounts based on the 

amount of equity in the account.

ANSWER: Long Leaf denies that, during the Donelson Period, it 

tailored its trading recommendations to specific customer accounts based on the 

amount of equity in the account. As to the Evans Period, Long Leaf is unable to 

answer this Request because it lacks knowledge or information sufficient to 

form a belief about the truth of the admission.

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36. Admit that Long Leaf Trading’s customer solicitation process including 

multiplesteps, including the “demo” and the “custom.”

ANSWER: Long Leaf admits that its customer solicitation process

included multiple steps during 2018. However, denies this request as to 2019, 

as the customer solicitation process (in 2019) did not include multiple steps, 

and did not include a “custom” step. As to the Evans Period, Long Leaf is 

unable to answer this Request because it lacks knowledge or information 

sufficient to form a belief about the truth of the admission.

37. Admit that, to the extent the National Futures Association (“NFA”) 

reviewed Long Leaf Trading’s solicitation materials in 2019, the NFA only 

reviewed material related tothe “demo” and not related to the “custom.”

ANSWER: Long Leaf admits that the NFA reviewed Long Leaf’s 

solicitation materials in 2019. Further, Long Leaf admits that the NFA did not review 

any “custom” materials because there was no custom presentation in 2019.

Dated: April 19, 2021 /s/ James M. Falvey

James M. Falvey

Falvey Law Office

200 S. Wacker Drive, Suite 3100

Chicago, Illinois 60606

312.404.5839 (office & mobile)

jimfalvey@yahoo.com

Attorney for Defendants

James A. Donelson & 

Long Leaf Trading

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Certificate of Service

I, James M. Falvey, hereby certify that on April 19, 2020, I provided service to 

the persons listed below via email:

Commodity Futures Trading

Chicago Regional Office

Andrew D. Nelson Ashley J. Burden

267 May St. E. Senior Trial Attorney

Elmhurst, IL 60126 aburden@cftc.gov

adnelson0503@gmail.com 

Joseph C. Platt

Pro se Trial Attorney

jplatt@cftc.gov

Andrew S. May

Partner Elizabeth M. Streit

Hinshaw & Culbertson LLP Chief Trial Attorney

151 North Franklin Street, Suite 2500, estreit@cftc.gov

Chicago, IL 60606

amay@hinshawlaw.com Joseph J. Patrick

Investigator

jpatrick@cftc.gov

/s/ James M. Falvey

James M. Falvey

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