Attached files
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2010
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 333-119655
TriView Global Fund, LLC
(Exact name of registrant as specified in its charter)
Delaware 20-1689686
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
505 Brookfield Drive, Dover, DE 19901
(Address of principal executive offices, including zip code)
(800) 331-1532
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec. 232.405
of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files).
Yes [ ] No [ ] Not Applicable
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Non-accelerated filer [X]
Accelerated filer [ ] Smaller Reporting Company [ ]
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Act).
Yes [ ] No [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) f the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ] Not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. Not Applicable
Part 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
The reviewed financial statements for the Registrant for the three months
ended March 31, 2010 are attached hereto and made a part hereof.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
General Information
The Registrant (the "Fund") was granted an initial effective date by the
Securities and Exchange Commission on November 3, 2005. However, the Fund has
not yet commenced business. At some time in the future, the Fund will,
pursuant to the terms of the LLC Operating Agreement, engage in the business
of speculative and high risk trading of commodity futures and options markets
through the services of the commodity trading advisors its management has
selected. The Fund intends to sell the Fund Units that it has filed for
registration; however, as of the date of this Report, no sales have been made.
See Subsequent Events at the end of this Section.
Description of Fund Business
The Fund grants one or more commodity trading advisors ("CTAs") a power of
attorney that is terminable at the will of either party to trade the equity
assigned to each CTA by Fund management. See Subsequent Events at the end of
this section. Upon sale of the minimum of Units, trading will commence. The
Managing Member has reserved the right to add and delete CTAs and reallocate
equity assigned as it shall determine, in its sole discretion, without prior
notice to the members (investors). A CTA has discretion to select and enter
trades, and does not disclose the methods it uses to make those determinations
in its disclosure documents, or to the Fund or to Fund management. There is
no promise or expectation of a fixed or any other return to the investors.
The investors must look solely to trading profits for a return their
investment as the interest income is expected to be less than the fixed
expenses to operate the Fund.
Assets
When the Fund commences business, the Managing Member will deposit
subscription proceeds to the Fund's accounts, including the account at the
futures commission merchant to hold as security for the trades selected by the
commodity trading advisor. The Managing Member will use its best efforts to
put Fund equity not used for margin in accounts not maintained by or
accessible by the futures commission merchant (FCM). This includes U.S.
Treasuries held at the U.S. Treasury, investments in cash management funds
that invest in only U.S. Treasuries, and foreign treasuries held with the
respective issuing department of treasury, all held in the name of the Fund.
The Fund assets at the FCM will consist of cash used as margin to secure
futures (formerly called commodities) trades entered on its behalf by the
commodity trading advisors it selects. The futures held in the Fund accounts
at the FCM are valued at the market price on the close of business each day by
the FCM. The Capital accounts of the Members are immediately responsible for
all profit and losses incurred by trading and payment and accrual of the
expenses of offering membership interests for sale and the operation of the
Fund. The fixed costs of operation must be paid before the members may earn a
profit on their investment. See Subsequent Events at the end of the section.
The Fund does not intend to borrow from third parties. Its trades are entered
pursuant to a margin agreement with the FCM, which obligates the fund to the
actual loss, if any, without reference or limit by the amount of cash posted
to secure the trade. The members are not personally liable for the debts of
the Fund, including any trading losses. As of the date of this Report, there
have been no offers or sales to non-affiliates of Units. Once a Unit has been
sold and redeemed, it will not be resold. Capital available will be dependent
upon the marketing and sales effort put in place by Fund management to sell
the registered membership interests. See Subsequent Events at the end of this
section.
2
An Investment in the Fund Depends upon Redemption of Fund Units
The Fund Units are not traded and they have no market value. Liquidity of an
investment in the Fund depends upon the credit worthiness of the exchanges,
brokers, and third parties of off exchange traded futures that hold Fund
equity or have a lien against Fund assets for payment of debts incurred.
Those parties must honor their obligations to the Fund for the Fund to be able
to obtain the return of its cash from the futures commission merchant that
holds the Fund account.
The commodity trading advisors select the markets and the off exchange
instruments to be traded. The Managing Member selects the futures commission
merchants to hold the Fund assets. The commodity trading advisors and the
Managing Member believe all parties who hold Fund assets or are otherwise
obligated to pay value to the Fund are credit worthy. Margin is an amount to
secure the entry of a trade and is not a limit of the profit or loss to be
gained from the trade. The Managing Member intends to allocate approximately
98% of the Fund equity to be used as margin to enter trades. Although it is
customary for the commodity trading advisors to use 40% or less of the equity
available as margin, there is no limit imposed by the Fund upon the amount of
equity the advisors may commit to margin. It is possible for the Fund to
suffer losses in excess of the margin it posts to secure the trades made.
To have the purchase price or appreciation, if any, of the Units paid to them,
members must use the redemption feature of the Fund. Distributions, although
possible in the sole discretion of the Managing Member, are not expected to be
made. There is no current market for the Units sold, none is expected to
develop and the LLC Operating Agreement limits the ability of a member to
transfer the Units.
Results of Operations
The initial start-up costs attendant to the sale of Units by use of a
Prospectus which has been filed with the Securities and Exchange Commission
are substantial. The Operating Agreement grants solely to the Managing Member
the right to select the CTAs and to otherwise manage the operation of the
Fund. See the Registration Statement, incorporated by reference herein, for
an explanation of the operation of the Fund.
Through the date of this Report, the Fund has not yet commenced business.
Therefore, for non-financial reporting purposes (subscription and redemption
purposes), its net asset value (NAV) per Unit of $1,000 and its total NAV of
$2,000 remained unchanged during and in between the three months ended March
31, 2010 and March 31, 2009.
The Fund is subject to ongoing offering and operating expenses; however, upon
the commencement of business, profits or losses will be primarily generated by
the commodity trading advisors by methods that are proprietary to them. For
financial reporting purposes, the Fund experienced profits (losses) of
$(13,578) [$(6,789) per Unit] and $(6,562[$(3,281) per Unit] for the three
months ended March 31, 2010 and March 31, 2009. The increase in losses was
primarily due to higher compliance costs with respect to registration of the
Fund's securities in additional states. These results are not to be construed
as an expectation of similar profits or losses in the future.
The Fund has not paid any commissions or earned any interest income from
inception through March 31, 2010.
The Fund did not have any additions or withdrawals during or in between the
three months ended March 31, 2010 and March 31, 2009.
Inflation has had no material impact on the operations or on the financial
condition of the Fund from inception through March 31, 2010.
Subsequent Events - On May 7, 2010, the Fund filed an S-1 Registration
Statement to register $20,000,000 in Units and subsequently, on May 11, 2010
withdrew its prior filed Post Effective Amendment No. 5 to another S-1
Registration Statement. The new S-1 Registration Statement contains new
offering terms, including a different fee structure, which are summarized as
follows. The CTA selected to trade on behalf of the Fund is GT Capital CTA,
which will be paid a 1% management fee on Fund assets allocated to it to
trade, along with a 20% incentive fee on New Net Profit, as that term is
defined in the Fund's prospectus. The Managing Member will be paid brokerage
commissions of 10% annually of Fund net assets to clear domestic trades, plus
actual commissions charged for trades made on foreign exchanges and forward
markets, if any. From this 10%, it pays the introducing broker 7% to cover
the costs of trades made on domestic markets, plus actual charges for trades
made on foreign markets, if any, and retains the 3% balance. The introducing
3
broker pays the futures commission merchant the per round turn commissions for
domestic markets, or higher for trades made on foreign exchanges and forward
markets, if any. Upon the commencement of business, the Fund will reimburse
the Managing Member and its affiliates for all but $20,000 in incurred
offering and organizational expenses, the reimbursable amount of which is
estimated to be $225,000 and will be amortized by the Fund over 60 months, or
paid off sooner at the Managing Member's discretion. Annual operating costs
are estimated to be 0.75% of the Fund's net asset value. There will be a
twelve month lock-in commencing from the date an investment is admitted to the
Fund.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The business of the Fund is speculative and involves a high degree of risk of
loss. See the Fund's Registration Statement and prospectus contained therein,
incorporated herein, for a full description of the risks attendant to Fund
business.
Item 4T. Controls and Procedures
Disclosure Controls and Procedures
The Registrant has adopted procedures in connection with the operation of its
business including, but not limited to, the review of account statements sent
to the Managing Member before the open of business each day that disclose the
positions held overnight in the Fund accounts, the margin to hold those
positions, and the amount of profit or loss on each position, and the net
balance of equity available in each account. The Fund brokerage account
statements and financial books and records accounts are prepared by an
independent CPA Firm and then are reviewed each quarter and audited each year
by a different independent CPA firm.
The Managing Member of the Fund, under the actions of its sole principal,
Michael Pacult, has evaluated the effectiveness of the design and operation of
its disclosure controls and procedures (as defined in the Securities Exchange
Act of 1934 Rules 13a-15(e) or 15d-15(e)) with respect to the Fund as of the
end of the period covered by this Report. Based on their evaluation, Mr.
Pacult has concluded that these disclosure controls and procedures are
effective.
Changes in Internal Control over Financial Reporting
There were no changes in the Managing Member's internal control over financial
reporting during the quarter ended March 31, 2010 that have materially
affected, or are reasonably likely to materially affect, internal control over
financial reporting applicable to the Fund.
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
There have been no legal proceedings against the Fund, its Managing Member,
the CTA, the IB or any of their Affiliates, directors or officers. The FCM,
MF Global Inc. ("MFG"), (MFG was formerly known as Man Financial Inc. ("MFI")
until the change of name to MFG was effected on July 19, 2007), has had the
following described reportable events. Neither the Fund nor the Managing
Member is a party to any of these events and they are included in reliance
upon a report supplied by MFG without verification by the Managing Member.
MFG has represented to the Managing Member that that none of the events it has
reported below will not now, or at any time in the future, interfere with its
performance as the FCM for the Fund's account.
MF Global Inc. ("MFG") is registered under the Commodity Exchange Act, as
amended, as a futures commission merchant and a commodity pool operator, and
is a member of the National Futures Association in such capacities. In
addition, MFG is registered with the Financial Industry Regulatory Authority
as a broker-dealer. MFG was formerly known as Man Financial Inc. ("MFI")
until the change of name to MFG was effected on July 19, 2007. MFG is a
member of all major U.S. futures exchanges and most major U.S. securities
exchanges. MFG's main office is located at 717 Fifth Avenue, 9th Floor, New
York, New York 10022-8101. MFG's telephone number at such location is (212)
589-6200.
4
At any given time, MFG is involved in numerous legal actions and
administrative proceedings, which in the aggregate, are not, as of the date of
this report, expected to have a material effect upon its condition, financial
or otherwise, or to the services it will render to the Fund. There have been
no administrative, civil or criminal proceedings pending, on appeal or
concluded against MFG or its principals within the five years preceding the
date of this report that MFI would deem material for purposes of Part 4 of the
Regulations of the Commodity Futures Trading Commission, except as follows:
In May 2006, MFI was sued by the Receiver for Philadelphia Alternate Asset
Fund ("PAAF") and associated entities for common law negligence, common law
fraud, violations of the Commodity Exchange Act and RICO violations (the
"Litigation"). In December 2007, without admitting any liability of any party
to the Litigation to any other party to the Litigation, the Litigation was
settled with MFI agreeing to pay $69 million, plus $6 million of legal
expenses, to the Receiver, in exchange for releases from all applicable
parties and the dismissal of the Litigation with prejudice. In a related
action, MFI settled a CFTC administrative proceeding (In the Matter of MF
Global, f/k/a Man Financial Inc., and Thomas Gilmartin) brought by the CFTC
against MFI and one of its employees for failure to supervise and
recordkeeping violations. Without admitting or denying the allegations, MFI
agreed to pay a civil monetary penalty of $2 million and accept a cease and
desist order.
On February 20, 2007, MFI settled a CFTC administrative proceeding (In the
Matter of Steven M. Camp and Man Financial Inc., CFTC Docket No. 07-04) in
which MFI was alleged to have failed to supervise one of its former associated
persons ("AP") who was charged with fraudulently soliciting customers to open
accounts at MFI. The CFTC alleged that the former AP misrepresented the
profitability of a web-based trading system and of a purported trading system
to be traded by a commodity trading advisor. Without admitting or denying the
allegation, MFI agreed to pay restitution to customers amounting to
$196,900.44 and a civil monetary penalty of $120,000. MFI also agreed to a
cease and desist order and to strengthen its supervisory system for overseeing
sales solicitations by employees in connection with accounts to be traded
under letters of direction in favor of third party system providers.
On March 6, 2008, and thereafter, 5 virtually identical proposed class action
securities suits were filed against MFG's parent, MF Global Ltd. ("MF
Global"), certain of its officers and directors, and Man Group plc. These
suits have now been consolidated into a single action. The complaints seek to
hold defendants liable under Sec. 11, 12 and 15 of the Securities Act of 1933 by
alleging that the registration statement and prospectus issued in connection
with MF Global's initial public offering in July 2007 were materially false
and misleading to the extent that representations were made regarding MF
Global's risk management policies, procedures and systems. The allegations are
based upon MF Global's disclosure of $141.5 million in trading losses incurred
in a single day by an AP in his personal trading account ("Trading Incident"),
which losses MFG was responsible to pay as an exchange clearing member. The
consolidated cases have been dismissed on a motion to dismiss by defendants.
Plaintiffs have appealed.
On December 17, 2009, MFG settled a CFTC administrative proceeding in
connection with the Trading Incident and three other matters without admitting
or denying any allegations and accepting a charge of failing to supervise (In
the Matter of MF Global Inc. CFTC Docket No. 10-03). The three additional
matters that were settled involved allegations that MF Global failed to
implement procedures to ensure proper transmissions of price information for
certain options that were sent to a customer, specifically that the price
indications reflected a consensus taken on [a particular] time and date and
were derived from different sources in the market place; failed to diligently
supervise the proper and accurate preparation of trading cards and failed to
maintain appropriate written authorization to conduct trades for a certain
customer. Under the Commission's order, MFG agreed to pay an aggregate civil
monetary penalty of $10 million (which it had previously accrued) and agreed
to a cease and desist order. In addition, MFG agreed to specific undertakings
related to its supervisory practices and procedures and MFG agreed that it
would engage an independent outside firm to review and assess the
implementation of the undertakings and certain recommendations that MFG
previously accepted. At the same time, MFG, without admitting or denying the
allegations made by the CME, settled a CME disciplinary action relating to the
Trading Incident by paying a fine of $495,000.
5
On August 28, 2009, Bank of Montreal ("BMO") instituted suit against MFG and
its former broker, Joseph Saab ("Saab") (as well as a firm named Optionable,
Inc. and five of its principals or employees), in the United States District
Court for the Southern District of New York. In its complaint, BMO asserts
various claims against all defendants for their alleged misrepresentation of
price quotes to BMO's Market Risk Department ("MRD") as independent quotes
when defendants knew, or should have known, that David Lee ("Lee"), BMO's
trader, created the quotes which, in circular fashion, were passed on to BMO
through MFG's broker, thereby enabling Lee substantially to overvalue his book
at BMO. BMO further alleges that MFG and Saab knew that Lee was fraudulently
misrepresenting prices in his options natural gas book and aided and abetted
his ability to do so by MFG's actions in sending price indications to the BMO
MRD, and substantially assisted Lee's breach of his fiduciary duties to BMO as
its employee. The Complaint seeks to hold all defendants jointly and
severally liable and, although it does not specify an exact damage claim, it
claims CAD 680.0 million (approximately $635.9 million) as a pre-tax loss for
BMO in its natural gas trading, claims that it would not have paid brokerage
commissions to MFG (and Optionable), would not have continued Lee and his
supervisor as employees at substantial salaries and bonuses, and would not
have incurred substantial legal costs and expenses to deal with the Lee
mispricing. MFG has made a motion to dismiss, which is pending.
In or about October 2003, MFI uncovered an apparent fraudulent scheme
conducted by third parties unrelated to MFI that may have victimized a number
of its clients. CCPM, a German Introducing Broker, introduced to MFI all the
clients that may have been victimized. An agent of CCPM, Michael Woertche
(and his asssociates), apparently engaged in a Ponzi scheme in which allegedly
unauthorized transfers from and trading in accounts maintained at MFI were
utilized to siphon money out of these accounts, on some occasions shortly
after they were established. MFI was involved in two arbitration proceedings
relating to these CCPM introduced accounts. The first arbitration involved
claims made by two claimants before a NFA panel. The second arbitration
involves claims made by four claimants before a FINRA panel. The claims in
both arbitrations are based on allegations that MFI and an employee assisted
CCPM in engaging in, or recklessly or negligently failed to prevent,
unauthorized transfers from, and trading in, accounts maintained by MFI.
Damages sought in the NFA arbitration proceeding were approximately $1,700,000
in compensatory damages, unspecified punitive damages and attorney's fees in
addition to the rescission of certain deposit agreements. The NFA arbitration
was settled for $200,000 as to one claimant and a net of $240,000 as to the
second claimant during fiscal 2008. Damages sought in the FINRA proceeding
were approximately $6,000,000 in compensatory damages and $12,000,000 in
punitive damages. During the year ended March 31, 2009, the FINRA arbitration
was settled for an aggregate of $800,000.
MFI was named as a co-defendant in an action filed in Florida State Court by
Eagletech Communications Inc. ("Eagletech") and three of its alleged
shareholders against 21 defendants, including banks, broker-dealers and
clearing brokers, as well as "100 John Doe defendants or their nominee
entities". The complaint alleges that the defendants engaged in a criminal
conspiracy designed to manipulate the publicly traded share price of Eagletech
stock. Plaintiffs seek unspecified compensatory and special damages, alleging
that "Man Group PLC d/b/a Man Financial Inc" participated in the conspiracy by
acting as a clearing broker for a broker-dealer that traded in Eagletech
stock. The complaint asserts claims under RICO, the Florida Securities and
Investor Protection Act, the Florida Civil Remedies for Criminal Practices Act
and a related negligence claim. On May 9, 2007, defendants filed a notice
removing the State Court action to the United States District Court for the
Southern District of Florida pursuant to 28 U.S.C. Sec. 1441(a). On October 2,
2007, Plaintiffs filed a first amended complaint in the Federal Court action
asserting additional claims against MFG under Florida common law, including
civil conspiracy, conversion and trespass to chattels. On February 26, 2008,
the financial institution defendants, including MF Global Inc., filed a motion
to dismiss seeking dismissal of all claims asserted in the amended complaint
on the ground that the claims are barred by the Private Securities Litigation
Reform Act ("PSLRA") and preempted by the federal securities laws. On June 27,
2008, the Court partially granted the motion, holding that the federal RICO
claims are barred by the PSLRA and dismissing the RICO claims with prejudice.
The Court declined to exercise supplemental jurisdiction over the state law
claims and remanded those claims to the Florida State Court. On July 25, 2008,
plaintiffs filed a notice of appeal of the Court's June 27, 2008 decision to
the United States Court of Appeals for the Eleventh Circuit but subsequently
withdrew its appeal.
In December 2007, MFG, along with four other futures commission merchants
("FCMs"), were named as defendants in an action filed in the United States
District Court in Corpus Christi, Texas by 47 individuals who were investors
in a commodity pool (RAM I LLC) operated by Renaissance Asset Management LLC.
The complaint alleges that MFG and the other defendants violated the Commodity
Exchange Act and alleges claims of negligence, common law fraud,
6
violation of a Texas statute relating to securities fraud and breach of
fiduciary duty for allegedly failing to conduct due diligence on the commodity
pool operator and commodity trading advisor, having accepted executed trades
directed by the commodity trading advisor, which was engaged in a fraudulent
scheme with respect to the commodity pool, and having permitted the improper
allocation of trades among accounts. The plaintiffs claim damages of $32.0
million, plus exemplary damages, from all defendants. All of the FCM
defendants moved to dismiss the complaint for failure to state a claim upon
which relief may be granted. Following an initial pre-trial conference, the
court granted plaintiffs leave to file an amended complaint. On May 9, 2008,
plaintiffs filed an amended complaint in which plaintiffs abandoned all claims
except a claim alleging that the FCM defendants aided and abetted violations
of the Commodity Exchange Act. Plaintiffs now seek $17.0 million in claimed
damages plus exemplary damages from all defendants. MFG filed a motion to
dismiss the amended complaint which was granted by the court and appealed by
the plaintiffs.
The Liquidation Trustee ("Trustee") for Sentinel Management Group, Inc.
("Sentinel") sued MFG in June 2009 on the theory that MFG's withdrawal of
$50.2 million within 90 days of the filing of Sentinel's bankruptcy petition
on August 17, 2007 is a voidable preference under Section 547 of the
Bankruptcy Code and, therefore, recoverable by the Trustee, along with
interest and costs.
In May 2009, investors in a venture set up by Nicholas Cosmo ("Cosmo") sued
Bank of America and MFG, among others, in the United States District Court for
the Eastern District of New York, alleging that MFG, among others, aided and
abetted Cosmo and related entities in a Ponzi scheme in which investors lost
$400 million. MFG has made a motion to dismiss which is currently pending
before the court.
In the late spring of 2009, MFG was sued in Oklahoma State Court by customers
who were substantial investors with Mark Trimble ("Trimble") and/or
Phidippides Capital Management ("Phidippides"). Trimble and Phidippides may
have been engaged in a Ponzi scheme. Plaintiffs allege that MFG "materially
aided and abetted" Trimble's and Phidippides' violations of the anti-fraud
provisions of the Oklahoma securities laws and they are seeking damages "in
excess of" $10,000 each. MFG made a motion to dismiss which was granted by the
court. Plaintiffs have appealed.
MFG and an affiliate, MF Global Market Services LLC ("Market Services"), are
currently involved in litigation with a former customer of Market Services,
Morgan Fuel & Heating Co., Inc. ("Morgan Fuel") and its principals, Anthony
Bottini, Jr., Brian Bottini and Mark Bottini (the "Bottinis"). The litigations
arise out of trading losses incurred by Morgan Fuel in over-the-counter
derivative swap transactions, which were unconditionally guaranteed by the
Bottinis.
On October 6, 2008, Market Services commenced an arbitration against the
Bottinis to recover $8.3 million, which is the amount of the debt owed to
Market Services by Morgan Fuel after the liquidation of the swap transactions.
MF Global Market Services LLC v. Anthony Bottini, Jr., Brian Bottini and Mark
Bottini, FINRA No. 08-03673. Each of the Bottinis executed a guaranty in favor
of Market Services personally and unconditionally guaranteeing payment of the
obligations of Morgan Fuel upon written demand by Market Services. Market
Services asserted a claim of breach of contract based upon the Bottinis'
failure to honor the guarantees.
On October 21, 2008, Morgan Fuel commenced a separate arbitration proceeding
before FINRA against MFG and Market Services. Morgan Fuel claims that MFG and
Market Services caused Morgan Fuel to incur approximately $14.2 million in
trading losses. Morgan Fuel v. MFG and Market Services, FINRA No. 08-03879.
Morgan Fuel seeks recovery of $5.9 million in margin payments that it
allegedly made to Market Services and a declaration that it has no
responsibility to pay Market Services for the remaining $8.3 million in
trading losses because Market Services should not have allowed Morgan Fuel to
enter into, or maintain, the swap transactions.
The Bottinis also asserted a third-party claim against Morgan Fuel, which in
turn asserted a fourth-party claim against MFG, Market Services and Steven
Bellino (an MFG employee) in the arbitration proceeding commenced by Market
Services.
On December 12, 2008, MFG settled three CME Group disciplinary actions
involving allegations that on a number of occasions in 2006 and 2007, MFG
employees engaged in impermissible pre-execution communications in connection
with trades executed on the e-cbot electronic trading platform, withheld
customer orders that were executable in the market for the purpose of
soliciting, and brokering contra-orders and crossed orders on the e-cbot
7
trading platform without allowing for the minimum required exposure period
between the entry of the orders. MFG was also charged with failing to properly
supervise its employees in connection with these trades. Without admitting or
denying any wrongdoing, MFG consented to an order of a CME Business Conduct
Committee Panel which found that MFG violated legacy CBOT Rule 504.00 and
Regulations 480.10 and 9B.13 and 9B.13(c) and ordered MFG to pay a $400,000
fine, cease and desist from similar conduct and, in consultation with CME
Market regulation Staff, enhance its training practices and supervisory
procedures regarding electronic trading practices.
MFG acts only as clearing broker for the Fund's futures accounts and as such
is paid commissions for executing and clearing trades. MFG has not passed
upon the adequacy or accuracy of the Fund's prospectus or this report and will
not act in any supervisory capacity with respect to the CPO or the CTA, as the
case may be, nor participate in the management of the CPO or of the Fund or of
the CTA. Therefore, investors should not rely on MFG in deciding whether or
not to participate in the Fund.
The Fund is not aware of any threatened or potential claims or legal
proceedings to which the Fund is a party or to which any of its assets are
subject. MFG has represented to the General Partner that that none of the
events it has reported will not now, or at any time in the future, interfere
with its performance as the FCM for the Fund's account.
Item 1A. Risk Factors
There have been no material changes from risk factors as previously disclosed
in the Fund's 2009 Form 10-K. The risks of the Fund are (1) described fully
in its prospectus filed with its registration statement on Form S-1, which is
incorporated herein by reference (2) described in summary in Part I of this
Form 10-Q, which is incorporated herein by reference.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None
Item 3. Defaults Upon Senior Securities
None
Item 4. (Removed and Reserved)
Not Applicable.
Item 5. Other Information
(a) None
(b) None
Item 6. Exhibits
31.1 Certification of Principal Executive Officer and Principal Financial
Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
8
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Form 10-Q for the
period ended March 31, 2010, to be signed on its behalf by the undersigned,
thereunto duly authorized.
Registrant:
TriView Global Fund, LLC
By TriView Capital Management, Inc.
Its Managing Member
By: /s/ Michael Pacult
Mr. Michael Pacult
Sole Director, Sole Shareholder,
President, and Treasurer of the Managing Member
Date: May 20, 2010
9
TRIVIEW GLOBAL FUND, LLC
(A Development Stage Enterprise)
QUARTERLY REPORT
March 31, 2010
MANAGING MEMBER:
TriView Capital Management, Inc.
% Corporate Systems, Inc.
505 Brookfield Drive
Dover, Kent County, Delaware 19901
Page
Report of Independent Registered Public Accounting Firm F-2
Statements of Assets and Liabilities F-3
Statements of Operations F-4
Statements of Changes in Net Assets F-5
Statements of Cash Flows F-6
Notes to the Financial Statements F-7 - F-12
Affirmation of the Commodity Pool Operator F-13
F-1
Patke & Associates, Ltd.
Certified Public Accountants
Report of Independent Registered Public Accounting Firm
To the Members of
TriView Global Fund, LLC
Dover, Delaware
We have reviewed the accompanying statements of assets and liabilities of
TriView Global Fund, Limited Liability Company (a development stage
enterprise), as of March 31, 2010 and the related statements of operations,
changes in net assets and cash flows for the three months ended March 31, 2010
and 2009 and the cumulative period from October 1, 2004 (date of inception) to
March 31, 2010. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board (United States),
the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to such interim financial statements for them to be in
conformity with accounting principles generally accepted in the United States
of America.
We have previously audited, in accordance with the auditing standards of the
Public Company Accounting Oversight Board (United States), the statement of
assets and liabilities of TriView Global Fund, Limited Liability Company as of
December 31, 2009 and the related statements of operations, changes in net
assets and cash flows for the year then ended (not presented herein) and in
our report dated March 8, 2010, we expressed an unqualified opinion on those
financial statements. In our opinion, the information set forth in the
accompanying statement of assets and liabilities as of December 31, 2009 is
fairly stated, in all material respects, in relation to the statement of
assets and liabilities from which it has been derived.
/s/ Patke & Associates, Ltd.
Patke & Associates, Ltd.
Lincolnshire, Illinois
May 17, 2010
300 Village Green Drive, Suite 210 * Lincolnshire, Illinois 60069
Phone: (847) 913-5400 * Fax: (847) 913-5435
F-2
TriView Global Fund, LLC
(A Development Stage Enterprise)
Statements of Assets and Liabilities
March 31, December 31,
2010 2009
(A Review)
Assets
Cash $1,790 $363
Prepaid expenses 12,968 6,790
Total assets 14,758 7,153
Liabilities
Accrued expenses - 3,817
Due to related parties 224,772 199,772
Total liabilities 224,772 203,589
Net assets $(210,014) $(196,436)
Analysis of net assets
Members $(105,007) $(98,218)
Managing members (105,007) (98,218)
Net assets (equivalent to $(105,007.00) and $(98,218.00) per unit) $(210,014) $(196,436)
Membership units outstanding
Members units outstanding 1.00 1.00
Managing members units outstanding 1.00 1.00
Total membership units outstanding 2.00 2.00
The accompanying notes are an integral part of the financial statements
F-3
TriView Global Fund, LLC
(A Development Stage Enterprise)
Statements of Operations
(A Review)
Cumulative
Period From
October 1, 2004
Three Months Ended March 31, (Inception)
to March 31,
2010 2009 2010
Investment income
Interest income $- $- $-
Total investment income - - -
Expenses
Professional fees 7,551 4,882 126,030
Other operating expenses 6,027 1,680 42,516
Total expenses 13,578 6,562 168,546
Net investment (loss) (13,578) (6,562) 168,546
Net (decrease) in net assets resulting from operations $(13,578) $(6,562) $(168,546)
Net income (loss) per unit
Member unit $(6,789.00) $(3,281.00) $(84,273.00)
Managing member unit $(6,789.00) $(3,281.00) $(84,273.00)
The accompanying notes are an integral part of the financial statements
F-4
TriView Global Fund, LLC
(A Development Stage Enterprise)
Statements of Changes in Net Assets
(A Review)
Cumulative
Period From
October 1, 2004
Three Months Ended March 31, (Inception)
to March 31,
2010 2009 2010
(Decrease) in net assets from operations
Net investment (loss) $(13,578) $(6,562) $(168,546)
Net (decrease) in net assets resulting from operations (13,578) (6,562) (168,546)
Capital contributions from members - - 2,000
Initial offering costs - - (43,468)
Total (decrease) in net assets (13,578) (6,562) (210,014)
Net assets at the beginning of the period (196,436) (159,832) -
Net assets at the end of the period $(210,014) $(166,394) $(210,014)
The accompanying notes are an integral part of the financial statements
F-5
TriView Global Fund, LLC
(A Development Stage Enterprise)
Statements of Cash Flows
(A Review)
Cumulative
Period From
October 1, 2004
Three Months Ended March 31, (Inception)
to March 31,
2010 2009 2010
Cash Flows from Operating Activities
Net (decrease) in net assets resulting from operations $(13,578) $(6,562) $(168,546)
Adjustments to reconcile net (decrease) in net assets from
operations to net cash (used in) operating activities:
(Increase) in prepaid expenses (6,178) - $(12,968)
(Decrease) in accrued expenses (3,817) (244) -
Net cash (used in) operating activities (23,573) (6,806) (181,514)
Cash Flows from Investing Activities
Initial offering costs - - (43,468)
Net cash (used in) investing activities - - (43,468)
Cash Flows from Financing Activities
Increase in due to related parties 25,000 6,400 224,772
Initial member capital contributions - - 2,000
Net cash provided by financing activities 25,000 6,400 226,772
Net increase (decrease) in cash 1,427 (406) 1,790
Cash at the beginning of the period 363 434 -
Cash at the end of the period $1,790 $28 $1,790
Non-Cash Activities
Initial offering costs charged to net assets $- $- $43,468
The accompanying notes are an integral part of the financial statements
F-6
TriView Global Fund, LLC
(A Development Stage Enterprise)
Notes to the Financial Statements
March 31, 2010
(A Review)
1. Nature of the Business
TriView Global Fund, LLC (the "Fund") was formed on October 1, 2004 under
the laws of the State of Delaware. The Fund expects to engage in high risk,
speculative and hedge trading of futures and forward contracts, options on
futures and forward contracts, and other instruments selected by registered
commodity trading advisors ("CTA's"). However, the Fund will not commence
business until at least $2,000,000 worth of units of membership interests (the
Units) are sold. The maximum offering is $20,000,000. TriView Capital
Management, Inc. (the "Corporate Managing Member") and Michael Pacult (the
"Individual Managing Member" and collectively the "Managing Member") are the
managing members and commodity pool operators ("CPO's") of the Fund. The
initial CTA is GT Capital CTA, which will have the authority to trade as much
of the Fund's equity as is allocated to it by the Managing Member. The selling
agent is Futures Investment Company (FIC), which is controlled by Michael
Pacult and his wife.
The Fund is in the development stage and its efforts through March 31, 2010
have been principally devoted to organizational activities.
2. Significant Accounting Policies
Regulation - The Fund is a registrant (effective November 3, 2005) with the
Securities and Exchange Commission ("SEC") pursuant to the Securities Act of
1933. The Fund is subject to the regulations of the SEC and the reporting
requirements of the Securities and Exchange Act of 1934. The Fund, once it
begins trading, will also be subject to the regulations of the Commodities
Futures Trading Commission ("CFTC"), an agency of the U.S. government, which
regulates most aspects of the commodity futures industry, the rules of the
National Futures Association and the requirements of various commodity
exchanges where the Fund executes transactions. Additionally, the Fund will be
subject to the requirements of futures commission merchants and interbank
market makers through which the Fund trades.
Offering Expenses and Organizational Costs - For financial reporting
purposes in conformity with accounting principles generally accepted in the
United States of America ("GAAP"), on the Fund's initial effective date,
November 3, 2005, the Fund deducted from members' capital the total initial
offering costs of $43,468, as of that date, and began expensing all subsequent
offering costs. Organizational and operating costs are expensed as incurred
for GAAP purposes. For all other purposes, including determining the Net Asset
Value per Unit for subscription and redemption purposes, the Fund will
capitalize all offering, organizational and operating costs until commencement
of business, at which time the costs will be expensed and amortized on a
straight line basis for 60 months. The commencement of business is contingent
upon the sale of at least $2,000,000 of membership interests. The Fund has
agreed to reimburse the Corporate Managing Member and other affiliated
companies for all offering, organizational and operating expenses they have
paid up to the commencement of business. These reimbursement amounts have
accumulated to $224,772 and $199,772 as of March 31, 2010 and December 31,
2009, respectively.
On May 7, 2010 the Managing Member filed an S-1 with the SEC in order to
gain approval for a proposed prospectus for the sale of membership interests.
In the S-1, the Managing Member has stated it will absorb $20,000 of the
offering and organizational costs which were previously incurred. When
implemented, this will result in an increase in net assets for GAAP purposes
and a decrease of the amount capitalized for all other purposes.
As of March 31, 2010 and December 31, 2009, the Net Asset Value and Net Asset
Value per Unit for financial reporting purposes and for all other purposes
are as follows:
Balance Per Unit Calculation
March 31, December 31, March 31, December 31,
2010 2009 2010 2009
Net Asset Value for financial reporting purposes $(210,014) $(196,436) $(105,007.00) $(98,218.00)
Adjustment for initial offering costs 43,468 43,468 21,734.00 21,734.00
Adjustment for other offering, organizational and operating expenses 168,546 154,968 84,273.00 77,484.00
Net Asset Value for all other purposes $2,000 $2,000 $1,000.00 $1,000.00
Number of Units 2.00 2.00
Registration Costs - Costs incurred for the initial filings with SEC,
National Association of Securities Dealers, Inc. and the states where the
offering is expected to be made are included in the offering expenses and,
accordingly, are accounted for as described above under "Offering Expenses and
Organizational Costs".
Revenue Recognition - Forward contracts, futures and other investments are
recorded on the trade date and will be reflected in the statement of
operations at the difference between the original contract amount and the
market value on the last business day of the reporting period.
Market value of forward contracts, futures and other investments is based
upon exchange or other applicable closing quotations related to the specific
positions.
Interest income will be recognized when it is earned.
Use of Accounting Estimates - The preparation of financial statements in
conformity with GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from these estimates.
F-7
TriView Global Fund, LLC
(A Development Stage Enterprise)
Notes to the Financial Statements
March 31, 2010
(A Review)
2. Significant Accounting Policies - Continued
Income Taxes - The Fund is not required to provide a provision for income
taxes. Income tax attributes that arise from its operations are passed
directly to the individual members. The Fund may be subject to state and
local taxes in jurisdictions in which it operates.
Management has continued to evaluate the application of Accounting Standards
Codification ("ASC") 740-10-25, "Income Taxes-Overall-Recognition" to the Fund
and has determined that ASC 740-10-25 does not have a material impact on the
Fund's financial statements. The Fund files federal and state tax returns. The
2007 through 2009 tax years generally remain subject to examination for the
U.S. federal and most state tax authorities.
Statement of Cash Flows - Net cash used in operating activities includes no
cash payments for interest or income taxes for the three months ended March
31, 2010 and 2009.
Foreign Currency - Investment securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollar amounts at
the date of valuation. Purchases and sales of investment securities and
income and expense items denominated in foreign currencies are translated into
U.S. dollar amounts on the respective dates of such transactions.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
fund's books and the U.S. dollar equivalent of the amounts actually received
or paid. Net unrealized foreign exchange gains and losses arise from changes
in the fair values of assets and liabilities, other than investments in
securities at fiscal period end, resulting from changes in exchange rates.
Fair Value Measurement and Disclosures - ASC 820 establishes a fair value
hierarchy which prioritizes the inputs to valuation techniques used to measure
fair value into three broad levels. The fair value hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (Level 1 measurements) and the lowest priority to
unobservable inputs (Level 3 measurements).
Level 1 inputs are unadjusted quoted prices in active markets for identical
assets or liabilities that the Fund has the ability to access at the
measurement date.
Level 2 inputs are inputs other than quoted prices included in Level 1 that
are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability, including
the Fund's own assumptions used in determining the fair value of investments.
Unobservable inputs shall be used to measure fair value to the extent that
observable inputs are not available, thereby allowing for situations in which
there is little, if any, market activity for the asset or liability at the
measurement date.
As of and for the period and year ended March 31, 2010 and year ended
December 31, 2009 the Fund had no investments.
3. Managing Member Duties
The responsibilities of the Managing Member, in addition to directing the
trading and investment activity of the Fund, including suspending all trading,
includes executing and filing all necessary legal documents, statements and
certificates of the Fund, retaining independent public accountants to audit
the Fund, employing attorneys to represent the Fund, reviewing the brokerage
commission rates to determine reasonableness, maintaining the tax status of
the Fund, maintaining a current list of the names, addresses and numbers of
units owned by each Member and taking such other actions as deemed necessary
to manage the business of the Company.
The Corporate Managing Member has contributed $1,000 in cash for deposit to
the capital of the Fund for a managing member interest in the Company.
If the net unit value of the Fund falls to less than 50% of the greater of
the original $1,000 selling price, less commissions and other charges or such
higher value earned through trading, then the Managing Member will immediately
suspend all trading, provide all members with notice of the reduction in net
unit value and give all members the opportunity, for fifteen days after such
notice, to redeem Units. No trading shall commence until after the lapse of
such fifteen day period.
F-8
TriView Global Fund, LLC
(A Development Stage Enterprise)
Notes to the Financial Statements
March 31, 2010
(A Review)
4. The Limited Liability Company Agreement
The LLC Operating Agreement provides, among other things, that-
Capital Account - A capital account shall be established for each member.
The initial balance of each member's capital account shall be the amount of
the initial contributions to the Fund.
Monthly Allocations - Any increase or decrease in the Fund's net asset value
as of the end of a month shall be credited or charged to the capital account
of each Member in the ratio that the balance of each account bears to the
total balance of all accounts.
Any distribution from profits or members' capital will be made solely at the
discretion of the Managing Member.
Federal Income Tax Allocations - As of the end of each fiscal year, the
Fund's realized capital gain or loss and ordinary income or loss shall be
allocated among the Members, after having given effect to the fees and
expenses of the Fund.
Subscriptions - Investors must submit subscription agreements and funds at
least five business days prior to month end. Subscriptions must be accepted
or rejected by the Managing Member within five business days. The investor
also has five business days to withdraw his subscription. Funds are deposited
into an interest bearing subscription account and will be transferred to the
Fund's account after the minimum to commence business has been raised and,
thereafter, on the first business day of the month after the subscription is
accepted. Interest earned on the subscription funds will accrue to the
account of the investor.
Redemptions - A member may request any or all of his investment be redeemed
at the net asset value as of the end of a month. Unless this requirement is
waived, the written request must be received by the managing member no less
than ten business days prior to a month end. Redemptions will generally be
paid within twenty days of the effective month end. However, in various
circumstances due to liquidity, etc. the Managing Member may be unable to
comply with the request on a timely basis. There will be no redemption fee;
however there will be a twelve month lock-in commencing from the date of
admission of an investment.
5. Fees
The Fund will be charged the following fees as of the commencement of
trading.
A monthly management fee of 1% (annual rate) will be paid to the CTA, GT
Capital CTA, calculated on the equity allocated to it to trade.
A quarterly incentive fee of 20% of "new net profits" will be paid to the
CTA. New net profits includes all income earned by a CTA and expense allocated
to its activity. In the event that trading produces a loss for a CTA, no
incentive fees will be paid and all losses will be carried over to the
following periods until profits from trading exceed the loss. The Fund may
also change CTA's and thereby begin the computation of new net profits from
the date that a new CTA is retained.
The Fund will pay annual domestic brokerage commissions to the Corporate
Managing Member of 10% of the Fund net assets, plus actual charges for trades
made on foreign markets, if any. The Corporate Managing Member retains 3% and
pays the affiliated introducing broker 7% for trades made by the trading
advisor on domestic markets, plus actual charges from trades made on foreign
markets, if any.
The Managing Member has reserved the right to change the management fee and
the incentive fee at its sole discretion. The total incentive fees may be
increased to 27% if the management fee is eliminated. The Fund may also
increase the total management fees paid to the CTA's and Corporate Managing
Member to 6% of total net assets if the total incentive fees are decreased to
15%.
F-9
TriView Global Fund, LLC
(A Development Stage Enterprise)
Notes to the Financial Statements
March 31, 2010
(A Review)
6. Related Party Transactions
The sole shareholder of the Corporate Managing Member made an initial member
capital contribution in the Fund of $1,000. He is also the sole shareholder
of Ashley Capital Management, Inc. (the general partner of another commodity
pool), which along with the shareholder and other affiliates, has temporarily
funded the syndication costs incurred by the Fund to date. In Accordance with
ASC 850, Consolidation of Variable Interest Entities, a variable interest entity
relationship exists between TriView Capital and the Fund.
ASC 460, Guarantees, identifies certain disclosures to be made by a guarantor
in its financial statements about its obligations under certain guarantees that
it has issued. In the normal course of business, the Fund has provided general
indemnifications to the Managing Member, its CTA's and others when they act,
in good faith, in the best interests of the Fund. The Fund is unable to develop
an estimate for future payments resulting from hypothetical claims, but expects
the risk of having to make any payments under these indemnifications to be
remote.
6. Related Party Transactions - Continued
Due to related parties at March 31, 2010 and December 31, 2009 consisted of
amounts due to the Corporate Managing Member, Ashley Capital Management, Inc.,
FIC, and Michael Pacult, President of FIC, the Corporate Managing Member and
Ashley Capital Management, Inc. The balances result from offering,
organizational and operating costs paid by the related parties on behalf of
the Fund and cash advances. These amounts bear no interest or due dates and
are unsecured. The balances are usually paid back within a year from the
start of trading or when the Fund is financially capable of repaying the
advance. The following balances were outstanding as of March 31, 2010 and
December 31, 2009:
March 31, December 31,
2010 2009
FIC $161,108 $136,108
Ashley Capital Management, Inc. 26,475 26,475
Corporate Managing Member 1,958 1,958
Michael Pacult 35,231 35,231
Balance due to related parties $224,772 $199,772
7. Membership Unit Transactions
As of March 31, 2010, and March 31, 2009 membership units were valued at
$(105,07.00), and $(83,197.00), respectively.
Transactions in membership units were as follows:
Units Amount
2010 2009 2010 2009
Members Units
Subscriptions - - $- $-
Redemptions - - - -
Net (decrease) in net assets
resulting from operations for
the three months ended 3/31 - - (6,789) (3,281)
Offering costs - - - -
Total - - (6,789) (3,281)
Managing Members Units
Subscriptions - - - -
Redemptions - - - -
Net (decrease) in net assets
resulting from operations for the
three months ended 3/31 - - (6,789) (3,281)
Offering costs - - - -
Total - - (6,789) (3,281)
Total Units
Subscriptions - - - -
Redemptions - - - -
Net (decrease) in net assets
resulting from operations for
the three months ended 3/31 - - (13,578) (6,562)
Offering costs - - - -
Total - - $(13,578) $(6,562)
8. Concentrations
The Fund will maintain all of its initial subscription deposits with a
commercial financial institution. In the event of the financial institution's
insolvency, recovery of Fund deposits may be limited to account insurance or
other protection afforded deposits by the institution.
F-10
TriView Global Fund, LLC
(A Development Stage Enterprise)
Notes to the Financial Statements
March 31, 2010
(A Review)
9. Derivative Financial Instruments and Fair Value of Financial Instruments
A derivative financial instrument is a financial agreement whose value is
linked to, or derived from, the performance of an underlying asset. The
underlying asset can be currencies, commodities, interest rates, stocks, or
any combination. Changes in the underlying asset indirectly affect the value
of the derivative. As the instruments are recognized at fair value, those
changes directly affect reported income.
All investment holdings are recorded in the statement of assets and
liabilities at their net asset value (fair value) at the reporting date.
Financial instruments (including derivatives) used for trading purposes are
recorded in the statement of assets and liabilities at fair value at the
reporting date. Realized and unrealized changes in fair values are recognized
in net investment gain (loss) in the period in which the changes occur.
Interest income arising from trading instruments is included in the statement
of operations as part of interest income.
Notional amounts are equivalent to the aggregate face value of the
derivative financial instruments. Notional amounts do not represent the
amounts exchanged by the parties to derivatives and do not measure the Fund's
exposure to credit or market risks. The amounts exchanged are based on the
notional amounts and other terms of the derivatives.
10. Financial Instruments with Off-Balance Sheet Credit and Market Risk
All financial instruments are subject to market risk, the risk that future
changes in market conditions may make an instrument less valuable or more
onerous. As the instruments are recognized at fair market value, those
changes directly affect reported income.
Included in the definition of financial instruments are securities,
restricted securities and derivative financial instruments. Theoretically,
the investments owned by the Fund directly are exposed to a market risk (loss)
equal to the notional value of the financial instruments purchased and
substantial liability on certain financial instruments purchased short.
Generally, financial instruments can be closed. However, if the market is not
liquid, it could prevent the timely close-out of any unfavorable positions or
require the Fund to hold those positions to maturity, regardless of the
changes in their value or the trading advisor's investment strategies.
Credit risk represents the accounting loss that would be recognized at the
reporting date if counterparties failed to perform as contracted.
Concentrations of credit risk (whether on or off balance sheet) that arise
from financial instruments exist for groups of counterparties when they have
similar economic characteristics that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic or
other conditions.
11. Indemnifications
In the normal course of business, the Fund enters into contracts and
agreements that contain a variety of representations and warranties and which
provide general indemnifications. The Fund's maximum exposure under these
arrangements is unknown, as this would involve future claims that may be made
against the Fund that have not yet occurred. The Fund expects the risk of any
future obligation under these indemnifications to be remote.
F-11
TriView Global Fund, LLC
(A Development Stage Enterprise)
Notes to the Financial Statements
March 31, 2010
(A Review)
12. Financial Highlights
Three Months Ended March 31,
2010 2009
Performance per unit (1)
Net unit value, beginning of period $(98,218.00) $(79,916.00)
Net realized and unrealized gains and
losses on commodity transactions - -
Investment and other income - -
Expenses (6,789.00) (3,281.00)
Syndication costs transferred to capital - -
Net (decrease) for the period (6,789.00) (3,281.00)
Net unit value at the end of the period $(105,007.00) $(83,197.00)
Net assets at the end of the period (000) $(210) $(166)
Total return (2) (6.91)% (4.11)%
Number of units outstanding at the end of the period 2.00 2.00
Supplemental Data
Ratio to average net assets
Investment and other income (3) 0.00 % 0.00 %
Expenses (3) (27.65)% (16.44)%
Total returns are calculated based on the change in value of a unit during
the period. An individual member's total returns and ratios may vary from the
above total returns and ratios based on the timing of additions and
redemptions.
(1) Investment and other income and expenses and net realized and unrealized
gains and losses on commodity transactions are calculated based on a single
unit outstanding during the period.
(2) Not annualized
(3) Annualized
F-12
TriView Global Fund, LLC
Affirmation of the Commodity Pool Operator
For the Three Months Ended March 31, 2010, and 2009
*****************************************************************************
To the best of the knowledge and belief of the undersigned, the information
contained in this report is accurate and complete.
/s/ Michael Pacult
Michael Pacult
President, TriView Capital Management, Inc.
Managing Member
TriView Global Fund, LLC
F-13
