Vote of No Confidence: A Call to Investigate the National Futures Association
Last week, the futures industry was rocked when Russ Wassendorf, Sr., CEO of PFGBest, admitted to falsifying bank statements to conceal missing customer funds. Consider this our formal vote of no confidence in the reliability, effectiveness, and integrity of the National Futures Association as a self-regulatory body for the U.S. futures markets. We hereby call for the CFTC and Congress to launch a thorough investigation into the practices, policies and people of the National Futures Association in order to determine the extent of their culpability in recent oversights and highlight the actions necessary to restore public faith in regulation of this sphere, including, if necessary, the revocation of their charter.
PFGBEST Update: Dear CME
The CME has the opportunity to shore up confidence in the futures market, and send a message to futures investors that the industry as a whole has their back. It requires one strong action: make PFG clients whole.
PFGBest Update: One Phone Call
As additional details rise to the surface, it becomes ever more difficult to understand how the regulators could have missed what was going on at PFGBest. Was it really that hard to place a single phone call?
PFGBest Update: Context for Numbers
We’re glad the PFGBest fiasco is getting some attention, especially when it comes to the regulatory environment. But not all of the information being circulated out there is necessarily to be trusted, and today provided a glaring example of some very shaky math.
PFGBest Update: Why it All Comes Back to the NFA
New twists in the PFGBest story keep coming – today we learned that their auditor was a once-person shop in the suburbs. But realistically, even that shouldn’t distract from those who were responsible for double checking PFGBest’s numbers: the NFA.
Disclaimers
Managed futures, commodity trading, forex trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. You should not rely on any of the information as a substitute for the exercise of your own skill and judgment in making such a decision on the appropriateness of such investments.
The entries on this blog are intended to further subscribers understanding, education, and – at times – enjoyment of the world of alternative investments. Unless distinctly noted otherwise, the data and graphs included herein are intended to be mere examples and exhibits of the topic discussed, are for educational and illustrative purposes only, and do not represent trading in actual accounts. Opinions expressed are that of the author.
The mention of specific asset class performance (i.e. +3.2%, -4.6%) is based on the noted source index (i.e. Newedge CTA Index, S&P 500 Index, etc.), and investors should take care to understand that any 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.
The performance data for various Commodity Trading Advisor (“CTA”) and Commodity Pools are compiled from various sources, including Barclay Hedge, RCM’s own estimates of performance based on account managed by advisors on its books, 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 mention of general asset class performance (i.e. managed futures did well, stocks were down, bonds were up) is based on RCM’s direct experience in those asset classes, estimates of performance of dozens of CTAs followed by RCM, and averaging of various indices designed to track said asset classes.
The mention of market based performance (i.e. Corn was up 5% today) reflects all available information as of the time and date of the publication.
The owner of this blog, RCM Alternatives, may receive various forms of compensation from certain investment managers highlighted and/or mentioned within the blog, including but not limited to retaining: a portion of trade commissions, a portion of the fees charged to investors by the investment managers, a portion of the fees for operating a fund for the investment managers via affiliate Attain Portfolio Advisors, or via direct payment for marketing services.
Managed Futures Disclaimer:
Past Performance is Not Necessarily Indicative of Future Results. The regulations of the CFTC require that prospective clients of a managed futures program (CTA) receive a disclosure document when they are solicited to enter into an agreement whereby the CTA will direct or guide the client’s commodity interest trading and that certain risk factors be highlighted. The disclosure document contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA.
See the full terms of use and risk disclaimer here.
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