The NFA recently announced that they had retained the law firm Jenner and Block to conduct a review of their audit procedures. This is a step in the right direction, but a far cry from the full congressional investigation that is needed – especially with the additional responsibilities the NFA is soon to acquire.
Our friend John Roe at the Commodity Customer Coalition (CCC) has a great piece out regarding the PFGBest bankruptcy and some details of how things could unfold. We look at the key points he raises, and what it could mean for PFG clients.
There’s no way around it: the recent scandals at MFGlobal and PFGBest have rocked confidence in the futures industry. Some of the issues of concern to investors are being addressed, and these developments are promising, but the question still remains: where do we go from here?
The NFA seems to be expressing some confusion over whether or not the regulators are supposed to be on the lookout for fraud. We wish we were kidding.
While we’ve been focused on the impact that the PFGBest scandal has had on clients – and the failings of the regulators – the ripples extend throughout the industry. Today, we bring to you a letter from one of the managed futures programs that we’ve worked with in the past, stating that they are closing their doors following this most recent scandal and the impact it had on their business.
In a perfect world, the industry would have stepped up to the plate by now to make PFGBest clients whole, but without such action, individual players are doing what they can to try to help investors. Take, for instance, TYL Trading and their decision to temporarily scrap their incentive fee.
Hardly a day goes by without someone asking us if it’s possible to sue the NFA. As it turns out, holding the regulators accountable might not be so easy – they enjoy a wide breadth of immunity, and that’s a problem that goes far beyond recent scandals.
The House Committee on Agriculture questioned NFA President Dan Roth, and while they got a few things right, we were hoping for a lot more. Representatives, here’s a what you need to know – and why we still need a full Congressional investigation of the NFA.
While the industry has rallied in the wake of the PFGBest scandal, calling for a wide breadth of reforms, a more pressing matter must be addressed today. The customer segregated funds held by PFGBest at Jefferies, and confirmed as valid and on deposit by Jefferies, must be released to the firm’s former clients.
Evidence of the NFA’s incompetence in the PFGBest case continues to mount. Why didn’t the 2011 email that revealed PFG’s shortfall lead to any action? Because of a fax from a number that should have led them right back to Wasendorf. There are just no words that can adequately respond to this.