To clients, industry colleagues, and friends:

To clients, industry colleagues, and friends:

It is with a heavy heart that to inform you that we made a decision to close Cervino Capital Management LLC in light of certain events.

Over the past seven years we have strived to make risk management a priority, with the belief that by managing risk, profits will follow provided there is a robust strategy.

We are proud to have remained true to such discipline during “arguably the greatest crisis in the history of finance capitalism,” as described by the Turner Review (2009). Unfortunately, while we were prepared to continue “managing a mountain of risk,” as a CTA we were not structured to handle systemic risk of the kind underlying the MF Global and PFG Best calamities.

We are deeply saddened at the financial pain our clients have endured due to the MF Global and PFG Best bankruptcies. Regarding MF Global, we worked closely with the Commodities Customer Coalition to advocate on behalf of customers. In regards to PFG Best, we stand by to help impacted clients with completing the claims form.

With respect to the future of the futures industry, no doubt the industry is undergoing a paradigm shift. In spite of this, the need for transparent price discovery and hedging of risk will continue. Accordingly, Davide and I maintain a long-term positive outlook.

In closing, to our industry colleagues and friends in the managed futures industry, we would like to stay in contact and hope to work with you again sometime in the future.

Very truly yours,

Michael “Mack” Frankfurter, Managing Director
Davide Accomazzo, Managing Director

Open Letter Re: MF Global Bankruptcy

To our clients and industry colleagues,

Let us begin by saying that Cervino Capital greatly values your business. We have always strived to put capital preservation and risk management at the forefront of our trading and operational activities.

As you know, on October 31, 2011 MF Global—one of the FCMs though which we cleared many of our client accounts—filed for bankruptcy. Subsequently, it came to light that “sacrosanct” rules, which specifically required client funds to be segregated from the firm’s assets, were not properly followed.

See: http://www.cftc.gov/PressRoom/PressReleases/pr6140-11
See: http://www.cftc.gov/PressRoom/SpeechesTestimony/opasommers-18
See: http://dealbook.nytimes.com/2011/12/28/mf-global-scrutinized-on-moving-of-money/

We empathize with everyone affected by the travesty that has unfolded at MF Global since the end of October, and note that we too were personally impacted by this situation.

On November 22, 2011 we took action by being the first to file a class action lawsuit against Jon S. Corzine and other senior executives at MF Global Holdings Ltd. The case is Accomazzo v. Corzine, 11-CV-8467, U.S. District Court, Southern District of New York. The case is being consolidated with other cases under a single U.S. District Judge, but our attorneys are moving to lead the sub-class on behalf of futures customers.

See: http://www.businessweek.com/news/2011-11-23/jon-corzine-sued-by-mf-global-customer-over-client-assets.html

As a sign of our commitment to our customers, Cervino Capital has decided to waive Q4 2011 fees for clients who were clearing their account at MF Global at the time of the bankruptcy, and who as a result suspended trading. Cervino Capital is respectful of the fact that this has been a painful period for MF Global customers and hope our gesture in a small way eases the burden.

Should you have any questions, please do not hesitate to contact us. In the meantime, we will continue to do what is in our power to ease the frustrations of our clients and business partners.

Very truly yours,

Michael “Mack” Frankfurter, Managing Director
Davide Accomazzo, Managing Director