PFG Best (at making trader money disappear?)

[FCMReform]

Kudos to the CFTC & NFA for these first but very important steps. I suspect the recent $10K fine imposed against ATC Brokers for its dealings with ILQ that resulted in a $8.00 client loss, was in part to set the precendent for this coming action.
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Anthony Ingrassia, CTA
NFA ID#: 0278164

There has been some positive moves taken by regulators. Now we need to try and get retail forex included in teh reform process.

 

[FCMReform]

The Futures Industry Association has submitted a comment letter to CFTC requesting the comment period be extended for one month due its concern that "increased costs imposed on FCMs will adversely affect the ability of many FCMs to compete effectively."

View Comment - CFTC

CFTC has received over 30 comment letters regarding their proposals to date. Most of the letters are coming from retail forex/metals traders (many inspired by the events taking place at PFG) asking for additional customer protections for retail forex. You can leave your comments below:

Public Comment Form - CFTC

The CFTC has now extended its open comment period:

CFTC Extends Public Comment Period on Rulemaking Enhancing Protections Afforded Customers and Customer Funds Held by Future Commission Merchants and Derivatives Clearing Organizations

 

[FCMReform]

Judge Nears Decision on PFG Complaint

The bankruptcy judge for the PFG Best case is expected to decide on the complaint filed by the forex/metals account holders at PFG. AP has an article out detailing the conflict between futures and forex customers:

http://www.boston.com/business/marke...5VM/story.html

Customers who traded foreign currency through Peregrine Financial Group, Inc. say their money is sitting in bank accounts that can be traced directly to them — and they want it back. Yet seven months after the company collapsed when Chairman Russell Wasendorf Sr. confessed to a stunning fraud, they haven’t received a dime. Other customers who traded commodities such as oil and corn have received up to 40 percent back — even though Wasendorf looted their accounts to expand his business empire and fund his lavish lifestyle.

Retail forex traders still have an opportunity to tell Washington that this kind of disparate treatment of retail forex customers needs to end. The CFTC comment period on additional customer reforms remains open:

http://comments.www.cftc.gov/PublicComme...m.aspx?id=1320

 

[BigT1]

Wasendorf Sentenced to 50 Years in Jail and $215M Restitution:
Former Peregrine CEO Russell Wasendorf Gets 50 Years In Jail For Embezzling Hundreds Of Millions
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AI

 

[insight]

Those price spikes are still happening in FXCM , I have a micro account and left a trade on with a stop . When I got up in the morning I was stopped out , somehow there was a spike which didn't even show on their candles only a broken line to where Iwas stopped out. I checked on other brokers no such spike.

 

[Jason Rogers]

Those price spikes are still happening in FXCM , I have a micro account and left a trade on with a stop . When I got up in the morning I was stopped out , somehow there was a spike which didn't even show on their candles only a broken line to where Iwas stopped out. I checked on other brokers no such spike.View attachment 8232

Hi Insight,

I'd be happy to look into this for you, but I'm not sure from your screenshot where I should be looking. At what price was your stop set, and what was the exact date and time was your trade stopped out?

Jason

 

[FCMReform]

2nd CFTC Roundtable

The CFTC held another public roundtable on the PFG/MF Global customer protection proposals that are now open for comment:

MF Global Customer Funds Rules Get Another CFTC Hearing - Bloomberg


FXCM continues to advocate for greater FCM/RFED transparency as detailed below. The CFTC will keep its comment period open for one more week.


Proposals to Bring Full Market Transparency and Accountability to the Futures/Forex Industry

1) Require All FCM’s to Publicly Publish Their Financials Once a Quarter:
Currently, the CFTC publishes monthly “Net Capital” reports that disclose to the public how much money a Futures Commission Merchant has set aside in capital. However, that report provides very little insight into how well the company is doing financially. By requiring FCM’s and RFED’s to publish their audited financials the trading public will know how much risk they are taking with each firm since investors will be able to weigh the liabilities along with the excess capital that these firms have.

Furthermore, the published financial statement should include everything (i.e. holding company’s financials) since what happens to other subsidiaries of the company can easily affect the regulated FCM/RFED. Each company should be required to provide a link to its financials on its own homepage so that the public can do its proper due diligence.

Too often, those firms that are teetering on the edge of bankruptcy lure customers in by offering unsustainable gimmicks (dirt cheap commissions, account opening bonuses) that temporarily puts off the inevitable. Customers should be aware of the perilous finances of those firms that would offer these kinds of gimmicks before opening an account with such a firm. PFG Best was a classic example of a firm that used such gimmicks as they routinely low balled their competitors with uneconomical discounts that no reputable, legally compliant firm could match.

2) Require all FCM’s to Employ a Top Ten Accounting Firm:
There need to be much higher accounting standards than currently exist in the FCM world. The Platt Group publishes an annual ranking of public accounting firms that could be used by FCM’s. Whether it is top 10 or top 25, the main point is that FCM’s must use a nationally recognized and respected accounting firm that could apply the same tough standards to FCM’s that publicly traded companies must meet.

While no one proposal will guarantee that a future FCM will not fail, these proposals will enhance the public’s due diligence capabilities by bringing greater market transparency and accountability to the world of futures/forex trading.

 

[BigT1]

Parties interested in PFG should be aware PFG may be trying to reviving its business in the wake of sentencing!
Be aware of this:
PFGBEST | Contact
https://www.forexpeacearmy.com/forex-forum/scam-alerts-folder/20778-pfgbest.html
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Would appreciate FCMReform comments.
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AI

 

[Pharaoh]

If you go to pfgbest.com, you end up on a page about the bankruptcy. I have a feeling that all the other pages didn't get changed, since they went under suddenly and no one was left to deal with that.

 

[FCMReform]

What's Next On Capitol Hill

The comment period for the CFTC’s additional customer funds protection proposal is now closed. But there will be additional opportunities to advance the cause of greater retail forex protections this summer. Yesterday, Senate Agriculture Committee Chairwoman Debbie Stabenow announced that she and Ranking Member Thad Cochran are soliciting comments from the general public in the run up to this year’s CFTC Reauthorization:

Sen. Stabenow Announces CFTC Reauthorization Plan - Farm Futures

"These comments and recommendations will become part of the public conversation," Chairwoman Stabenow said. "We would like to hear from the public on a couple of fronts: concerns with commodity market oversight generally and on the need for additional customer protections in light of the failures at MF Global and Peregrine Financial. Senator Cochran and I will work together closely on this issue. The process will be open and bipartisan while the product will be consensus-driven."

Retail foreign exchange has long been in need of additional customer protections, in particular segregation of customer funds and account insurance. We expect these issues to be front and center this summer and customer backing will be necessary if we are to have any success convincing Capitol Hill to support these necessary reforms. More to come in the weeks and months ahead.