In light of the catastrophe unfolding at PFGBest, what plan does our government have for futures regulation? Budget cuts, if you can believe it.
The story of PFGBest is still unraveling, but the details we have are infuriating. Today we break down what we know so far, the possibilities on the horizon, and the swift, decisive action necessary to keep this travesty from becoming the final nail in the coffin of a marketplace that serves as a heartbeat of our global economy.
Rumors are flying fast and loose as everyone tries to figure out exactly what’s going on at PFGBest. Here’s the latest in what we know, and what has yet to be confirmed.
In case you missed it, PFGBest has filed for bankruptcy. We take a look at the circumstances, and what they could mean for clients.
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.
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.
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?
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.
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.
Now we know where at least some of the missing PFG money went – Russ Wasendorf, Sr. claims that used customer funds to pay fines and fees to regulators. Since that money wasn’t PFG’s to give, it seems obvious what ought to be done with it.