September 11, 2012
Attain Capital
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Just when we get a little bit of good news (last week’s motion for an interim distribution of funds) in the ongoing PFGBest debacle, something comes along to spoil our hopes. Last week, the PFG trustee announced plans to make an initial distribution of customer funds – at last. Just a few days later, however, the regulators come in saying that motion shouldn’t be granted. Via the Wall St. Journal:
U.S. regulators have urged a Chicago bankruptcy judge to hold off approving a plan that would return some money to customers of Peregrine Financial Group Inc., warning that the proposal needs more work.
The trustee unwinding the collapsed futures and currency brokerage needs to run tests on accounts that would receive funds and flesh out his plan to distribute about $123 million to clients, according to a legal filing by the Commodity Futures Trading Commission.
Really, CFTC? Now you’re concerned about the accuracy of PFG’s books? Talk about closing the barn door after the horse has left. The trustee has been holding off the distribution in order to confirm account balances, and your complaint is… that account balances need to be confirmed? If that’s your worry, don’t just force motions and delay payouts to customers: send in a team of experienced auditors who can set the books straight. We know a little firm named the NFA with intimate knowledge of PFG’s operations with ample staff to do just that. Talk about a good PR move for once in this fiasco, why wouldn’t the NFA be in there doing everything they can to speed the verification process?
We get that this is an intricate process, but as we pointed out last week, the longer clients wait with 0% of their money returned, the more likely they are to suffer from not having the diversification value of their investments. This was a failure of the regulators, and pushing for further delays (again caused by the regulators) is not the way to make this right.
One silver lining, though – the CFTC’s worries about falsified books could end up working in favor of PFG customers. Via Futures Magazine:
The CFTC said its “preliminary” investigation uncovered more than $45 million in fictitious bookkeeping entries and unusual activity or balances in customer accounts.
This could potentially be great news – it’s not totally clear at this point what these fictitious bookkeeping entries actually represent. But if there really is $45 million in fictitious customer accounts, that could mean $45 million more for real customers to get back. Here’s crossing our fingers…
At the end of the day, we understand that PFG’s books may be a mess, and we certainly understand the hesitation to disburse funds without knowing that all the account balances are accurate. But that’s why the trustee is only doing a partial distribution. And if the CFTC’s big concern is that the books aren’t accurate yet, then they should use their authority and force the NFA to cough up a 100 auditors to get in there and call every customer and every bank of those customers to confirm validity.
Or, better yet, take up Attain’s offer (made privately last week and publically at the creditor’s meeting today) to verify customer validity and balances for the accounts the accounts introduced by them. Why is there no outreach to the customers and brokers who know the details of the accounts better than anyone? The trustee (and now the CFTC) are saying how important verification is – but doing very little in terms of real action to move forward with such verification. We are more than happy to provide independent corroboration for every penny of our customers’ funds that were held at PFG – and at least three other large IBs of PFG we have spoken to would do that same. The trustee has shared that he is willing to take us up on this offer…but we’re not doing any work yet…
Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
The programs listed here are a sub-set of the full list of programs able to be accessed by subscribing to the database and reflect programs we currently work with and/or are more familiar with.
Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history. Individuals cannot invest in the index itself, and actual rates of return may be significantly different and more volatile than those of the index.
Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.
Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.
Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.
RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.
Limitations on RCM Quintile + Star Rankings
The Quintile Rankings and RCM Star Rankings shown here are provided for informational purposes only. RCM does not guarantee the accuracy, timeliness or completeness of this information. The ranking methodology is proprietary and the results have not been audited or verified by an independent third party. Some CTAs may employ trading programs or strategies that are riskier than others. CTAs may manage customer accounts differently than their model results shown or make different trades in actual customer accounts versus their own accounts. Different CTAs are subject to different market conditions and risks that can significantly impact actual results. RCM and its affiliates receive compensation from some of the rated CTAs. Investors should perform their own due diligence before investing with any CTA. This ranking information should not be the sole basis for any investment decision.
See the full terms of use and risk disclaimer here.
Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
The programs listed here are a sub-set of the full list of programs able to be accessed by subscribing to the database and reflect programs we currently work with and/or are more familiar with.
Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history. Individuals cannot invest in the index itself, and actual rates of return may be significantly different and more volatile than those of the index.
Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.
Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.
Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.
RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.
Limitations on RCM Quintile + Star Rankings
The Quintile Rankings and RCM Star Rankings shown here are provided for informational purposes only. RCM does not guarantee the accuracy, timeliness or completeness of this information. The ranking methodology is proprietary and the results have not been audited or verified by an independent third party. Some CTAs may employ trading programs or strategies that are riskier than others. CTAs may manage customer accounts differently than their model results shown or make different trades in actual customer accounts versus their own accounts. Different CTAs are subject to different market conditions and risks that can significantly impact actual results. RCM and its affiliates receive compensation from some of the rated CTAs. Investors should perform their own due diligence before investing with any CTA. This ranking information should not be the sole basis for any investment decision.
See the full terms of use and risk disclaimer here.