The NFA’s failure to detect the fraud at PFGBest was inexcusable, and at the risk of sounding like a broken record, we still think that a thorough investigation into the people and practices of the organization is warranted. Nevertheless, it does appear that at least one person who should have been responsible for confirming PFG’s customer balances will no longer be on board. Via the Wall St. Journal:
A key regulator has departed the National Futures Association, as the derivatives industry’s self-regulatory body seeks to tighten oversight of firms and assume oversight of the huge swaps trading market.
Lauren Brinati, director of audits and investigations for the Chicago-based NFA, this month left the agency for a job with big-four accounting firm Ernst & Young LLP, according to representatives of both organizations.
Unfortunately, this doesn’t sound like much of a “heads rolling” kind of scenario. Switching over to Ernst & Young, one of the “big four” accounting firms, can hardly be considered a step down from the NFA, and we’re not sure what it says about Ernst & Young, either – especially since Brianti has been the subject of some pretty major competency concerns outside of the PFGBest scandal (even if they did come from Ann Barnhardt). What about the auditing staff that worked the PFGBest case itself? What about the management that rubber stamped the reviews? What about the leadership that thought mysterious faxes didn’t warrant any further investigation?
Don’t get us wrong – some of the changes we’ve seen take hold are positive, and a step in the right direction. That being said, we’ve yet to see anyone at the NFA truly held accountable for the incompetency that paved the way for futures investors across the industry, and if a cushy new job elsewhere is their version of justice, we’re not holding our breath.
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