PFGBest Accounts Frozen (PFG scandal big thread)

brevco 

The problem with this is if the account is in an IRA (individual retirement account)......you pull the money out and the tax man penalizes you 10% of it.

I agree, in that case this option is not attractive.

I am not a US citizen, so I did not think of this problem.



Another thing which came to my mind is, we want more or better, more effective, regulation/audits of brokerage firms so that our funds in our futures accounts are secured. But if regulators finally start to scrutinize brokerage firms in an effective manner, we will suddenly see further firms go down the drain and customer funds disappear (the funds were already gone, but then everyone would see it).

But if a solution similar to SIPC is adopted for futures accounts as well, then this might not be a problem.

karoshiman 

I agree, in that case this option is not attractive. I am not a US citizen, so I did not think of this problem. ...

By the way, I almost forgot that my agreement with TradeStation is also with TradeStation Europe (together with the US entity). The agreement states that TS Europe is regulated by the Financial Services Authority in the UK.

I am currently in contact with TS customer service to find out what that means in terms of funds protection.

However, this is of no help for you US guys... thought, some of the international members here might be interested.

Only other solution I can think of for this problem is the old fashioned way - let the marketplace decide.
Everyone knows the market is more intelligent than any single trader or firm.
They offer CDS coverage for crazy things like banks and sovereigns.
Why not offer these products for FCMs as well?
The marketplace would then determine who the riskiest FCMs truly are - somehow I think this is more accurate than letting self-regulated regulators decide.
Insurance could then be structured by the market makers in the event of a payout event.

Serninja 

I just thought about the NFA Assessment Fees and charges and ordered fines they receive. The NFA assessment fee, payable by FCMs with respect to futures contracts, is $.02 per side, invoiced to customers. After taking a short look at the publications of the CME regarding just of their futures volume, these numbers made me really dizzy. With due regards to these huge sums, shouldn't be indicated that "someone" audit the NFA too; simply put are they have been audited? Then also, do they release figures or balance sheets to the public? What happens with all the monies? I then took a look at the current Opportunities for carreers at NFA. Either they just started now to raise the requirements for positions or they maybe aren't able to hire the right people. A Bachelor's degree in Accounting requires also the ability to anticipate and respond to suspicious practices and analytical and communication skills. At least the latter requirements weren't available at that time. Nobody was able to "anticipate" that this theoretically could be possible and no one also had the "communication skills" to pick up the phone to verify the statements. Seemingly it doesn't matter if it's a top-tier company with triple digit millions of customer assest or a little rat-shop-broker in a one-horse town. I mean this task could have done the customer himself. Just asking the broker to provide a statement of the bank who helds the segregated accounts, that there is everything in line. Would have this made the customer feeling more reassured? No one pays the customer for that, why would he pay some one else for the same? Only if one can go beyond that, right? In relation to that, insurance companies send investigators across the states for claims that are one-thenth of a percent and a lot of them have by far less revenues then the NFA. I think insurance could help, because it's in the interest of the insurance company to prevent the insurance case. Let them do the job when it comes to risk analysis. Therefore they would do very much more, for less premium to audit the way it has to be done. Just one condition of insurance: "If the customer can't withdraw his money due to regulatory actions, this case is coverd by the insurance." Plain and simple. I've read that it could be more complicated than MF Global because it appears there is fraud involved, based on the CFTC complaint. But this frees the regulators only, if they did everything, I mean at least everything one avarage simple-minded person would do in a regulatory position. If not, there could be possibly someone else to sue with at least sufficient estate to fully satisfy claims... There have to be made deeply changes in the system, now an immediately. But foremost, the customers have to be compensated to restore the trust! Just my opinion...

On the CTFC's website they state their mission and responsibilities: "The CFTC's mission is to protect market users and the public from fraud, manipulation, abusive practices and systemic risk related to derivatives that are subject to the Commodity Exchange Act, and to foster open, competitive, and financially sound markets."

According to a video made by Dan Roth, President of the NFA, they (NFA) are overseen by the CFTC. If they're both responsible for the same thing, it seems to me there shouldn't be a need for both. And why do FCM's pay fees to NFA? NFA is a "self-regulatory organization" and they are supposed to "safeguard the integrity of the futures market." So they do that by collecting fees from the very FCM's they're supposed to oversee? What is the benefit to the FCM to become a member of the NFA when we have the CFTC? Maybe they should be merged so the CFTC won't need additional funding to do their job if merging the two would give them more "manpower" they need to DO their job?

A friend of mine who is in the insurance business called and spoke directly to the compliance officer of the NFA. He was not able to answer any of the questions asked of him. My friend suggested that the FCM's should be required to purchase a bond to cover their exposure. There are many other companies who are required to purchase bonds/insurance to cover the liability of some of their employees including directors and officers of their companies. When I worked as a secretary for an insurance company over 30 years ago, I was covered under a bond. Why not brokerages? Even my townhome association carries Director and Officers Liability insurance.

When the compliance officer can't answer a few simple questions about how they "oversee" or safeguard the integrity of the futures market, I'd question his qualifications.

So, we have an overseer (CFTC) of the overseer (NFA) who oversees FCM's and (safeguards) the integrity of the futures market? I don't get it. I must be dumb. That's why I lost my money.

brevco 

The problem with this is if the account is in an IRA (individual retirement account)......you pull the money out and the tax man penalizes you 10% of it.

@brevco

Not if you open a new IRA account at a broker or bank. Have them transfer your IRA account from your broker into the new IRA account .

If this is true, this is unacceptable.

PFGBest Update: One Phone Call | Attain Capital Managed Futures Blog

At Peregrine Financial, Signs of Trouble Seemingly Missed for Years - NYTimes.com

Here's the document that fooled the NFA.

Just my speculation after this new video. Sr. , family, and the board of execs including the CFO and that "homemade" personal auditor all knew about it. Rumors were going around. The emails to all the employees during the last week was to help ally fears and to keep customers from leaving until the exposure..

 
 

Cloudy 

Just my speculation after this new video. Sr. , family, and the board of execs including the CFO and that "homemade" personal auditor all knew about it. Rumors were going around. The emails to all the employees during the last week was to help ally fears and to keep customers from leaving until the exposure..

Stupid suggestion with giving the regulators more money to get more and better people. What I've read so far about this, and if this is true, you would need only common sense to figure out that something could be wrong here. As someone else said, why didn't they just call the bank?

Agree, that someone else must have been involved as well. Cannot imagine that Sr. was the only one...

Cloudy 

Just my speculation after this new video. Sr. , family, and the board of execs including the CFO and that "homemade" personal auditor all knew about it. Rumors were going around. The emails to all the employees during the last week was to help ally fears and to keep customers from leaving until the exposure..

That was most humorous. LOL... talking heads fighting with each other...

Money is not the answer... and I also don't think more "insiders" doing the regulating is the answer... answer is true accountability, checks and balances, and complete transparency.

Mike

CNBC reporting PFG Founder and CEO Russel Wasendorf Sr. Arrested in Iowa After Futures Broker's Collapse

Mike

Big Mike 

CNBC reporting PFG Founder and CEO Russel Wasendorf Sr. Arrested in Iowa After Futures Broker's Collapse Mike

Source: News Headlines

Quoting 

CEDAR FALLS, Iowa — Russell Wasendorf, the founder and CEO of failed trader Peregrine Financial Group, has been arrested, CNBC has learned. He has been charged with making false statements to the Commodity Futures Trading Commission beginning back in 2010 and continuing until July 2012. PFG filed for bankruptcy on Tuesday, and regulators say some $200 million in customer funds are unaccounted for. One day earlier, Wasendorf — a 40-year futures industry veteran — attempted suicide in his car outside PFG's Cedar Falls, Iowa headquarters. An apparent suicide note found in the vehicle indicated possible accounting discrepancies at the firm, according to a police report. Authorities will not discuss Wasendorf Sr.'s condition, but a local newspaper, quoting unidentified sources, reported he is alert and responsive at an Iowa hospital, and possibly able to shed some light on the bizarre events leading up to the firm's collapse. On June 5, employees received an invitation to Wasendorf's wedding to his fiancee Nancy Palladino, planned for Aug. 4, according to another email obtained by CNBC. But public records in Clark County, Nevada show Wasendorf and Palladino were married in Las Vegas three weeks later, on June 30. Three days after the wedding, Wasendorf signed over power-of-attorney to his son, Russell Wasendorf, Jr. Three days later, on July 6, the younger Wasendorf sent the email to employees saying the firm was now poised to break even. PFG had been under scrutiny for months. In February, the industry's self-regulatory organization — the National Futures Association — filed a civil complaint against the firm alleging violations involving customer funds. PFG's in-house attorney has also not responded to CNBC's requests for comment.

Mike

My trading funds are frozen with PFG. I had a couple people independently suggest opening an account with Infinity Futures. Does anyone have experience with Infinity Futures or could recommend a good futures broker?

FBI arrests PFGBest’s Wasendorf today; charged with making false statements | Des Moines Register Staff Blogs

He has been forging for 20 years.

Bloomberg Video

Mike

karoshiman 

I agree, in that case this option is not attractive. But if a solution similar to SIPC is adopted for futures accounts as well, then this might not be a problem.

Hi I doubt SIPC member firms would be interested increasing their levies to support the futures guys. Bear in mind regulation for securities is much tighter than futures so the insurance premiums for futures would likely be significantly higher.

I just looked at the SIPC annual report for last year. They only have net assets of $200+ million as there are still huge accrued liabilities outstanding from the Bernie Madoff debacle. The latest annual report can be seen here:

SIPC - Securities Investor Protection Corporation > Who > Annual Reports

Even if they setup a separate self funded SIPC type entity for futures the cost to the futures brokers will be significant. The insurance companies will charge significantly for the risk premium due to lack of regulation and clearly incompetent oversight. Whatever vehicle is used, a bond or insurance the premiums to insure "the wild west" will likely be astronomical.

I doubt these firms can ever afford it. Take one of my brokers AMP futures for example. Their net assets are reported to be $800k+, how do you think they can afford say $500k in insurance?

Get ready for higher commissions boys.

Cheers
DJ

Source: PFG Head Arrested | ZeroHedge

*WASENDORF SAID HE USED PHOTOSHOP, SCANNER IN FORGERY, U.S. SAYS
*WASENDORF SAID CHOICE WAS GO OUT OF BUSINESS OR CHEAT: U.S.
*WASENDORF'S STATEMENTS MADE IN SUICIDE NOTE, PROSECUTORS SAY
*PEREGRINE'S WASENDORF SAID `I HAVE COMMITTED FRAUD,' U.S. SAYS

While unable to successfully kill himself, it appears the CEO of PFGBest is even less successful at evading the police. As just reported,

*PFGBEST'S WASENDORF ARRESTED IN IOWA
*FED PROSECUTORS CHARGE IOWA FIRM CEO W/ LYING TO REGULATORS:AP
*PEREGRINE CHIEF WASENDORF CHARGED BY FEDERAL PROSECUTORS (with making false statements to the CFTC)
*WASENDORF FRAUD AT PEREGRINE LASTED 20 YEARS, PROSECUTORS SAY

Quoting 

"I have committed fraud. For this I feel constant and intense guilt," the statement said. "I had no access to additional capital and I was forced into a difficult decision: Should I go out of business or cheat? I guess my ego was too big to admit failure," the statement said, according to the court filing. ... Mr. Wasendorf relied on "careful concealment" and "blunt authority" to hide his fraud from his employees, he wrote in the note, as detailed in the complaint

Mike

jsouvertjis 

My trading funds are frozen with PFG. I had a couple people independently suggest opening an account with Infinity Futures. Does anyone have experience with Infinity Futures or could recommend a good futures broker?

Sorry to hear that.

You can find many broker reviews here:

Brokers and Data Feeds - Big Mike's Trading Forum

Mike

How Did Regulators Miss The Red Flags at PFGBest? | Compliancex

Anonymous tipster was warning the NFA about PFG 5 years ago.

Additional details from his confession:

Quoting 

“I have committed fraud. For this I feel constant and intense guilt. I am very remorseful that my greatest transgressions have been to my fellow man. Through a scheme of using false bank accounts I have been able to embezzle millions of dollars from customer accounts at Peregrine Financial Group, Inc. The forgeries started nearly twenty years ago and have gone undetected until now. I was able to conceal my crime of forgery by being the sole individual with access to the US Bank accounts held by PFG. No one else in the company ever saw an actual US Bank statement. The Bank statements were always delivered directly to me when they arrived in the mail. I made counterfeit statements within a few hours of receiving the actual statements and gave the forgeries to the accounting department. .... I had no access to additional capital and I was forced into a difficult decision: Should I go out of business or cheat? I guess my ego was too big to admit failure. So I cheated, I falsified the very core of the financial documents of PFG, the Bank Statements. At first I had to make forgeries to both Firstar Bank Statements and the Harris Bank Statements. When I choose (sic) to close the Harris Account I only had to falsify the Firstar Statements (elsewhere in the signed statement Wasendorf noted that Firstar “eventually became US Bank”). I also made forgeries of official letters and correspondence from the bank, as well as transaction confirmation statements. .... Using a combination of Photo Shop, Excel, scanners, and both laser and ink jet printers I was able to make very convincing forgeries of nearing every document that came from the Bank. I could create forgeries very quickly no one would suspect that my forgeries were not the real thing that had just arrived in the mail. With a careful concealment and blunt authority I was able to hide my fraud from others at PFG. PFG grew out of a one man shop, a business I started in the basement of my home. As I added people to the company everyone knew I was the guy in charge. If anyone questioned my authority I would simply point out that I was the sole shareholder. I established rules and procedures as each new situation arose. I ordered that US Bank statement were to be delivered directly to me unopened, to make sure no one was able to examine an actual US Bank Statement. I was also the only person with online access to PFG’s account using US Bank’s online portal. On the US Bank side, I told representatives at the Bank that I was the only person they should interface with. ... When it became a common practice for Credited Auditors and the Field Auditors of the Regulators to mail Balance Confirmation Forms to Banks and other entities holding customer funds I opened a post office box. The box was originally in the name of Firstar Bank but was eventually changed to US Bank. I put the address “PO Box 706, Cedar Falls, IA 50613-0030” on the counterfeit Bank Statements. When the auditors mailed Confirmation Forms to the Bank’s false address, I would intercept the Form, type in the amount I needed to show, forge a Bank Officer’s signature and mail it back to the Regulator or Certified Auditor. When online Banking became prevalent I learned how to falsify online Bank Statements and the Regulators accepted them without question.”

Mike

A lot of details here, read

Mike

Big Mike 

Additional details from his confession: Mike

Wow been doing it for 20 years and getting away with it. Regulators must be complete idiots.

any mention of his fake coma?

Big Mike 

Additional details from his confession: Mike

Wow. 20 years...and Photoshop?!

No one is safe now, absolutely no one. Who knows what else is going on out there right under our noses. Its like the wild west out there. Anything goes.

Mike
Thanks for this document, I just needed signature of special agent from FBI

The regulators never did an audit where they contacted the bank directly to confirm his account balances in 20 years??? OMG

What exactly has NFA been doing with the trade fees that everybody has been paying? I want my money back.

Self-regulation? Yeah that is a good idea. Not.

liquidcci 

Wow been doing it for 20 years and getting away with it. Regulators must be complete idiots.

The great regulator "Karma" will take care of him ;-)

trendisyourfriend 

The great regulator "Karma" will take care of him ;-)

I can't fund my new account with karma.

Big Mike 

Sounds like he is trying to take all the responisibility from others that might have been involved. How could other people in PFG upper management, not have known?

When do I get my money back?

aligator 

I can't believe that Jr. was not involved. The whole family had invested heavily in energy projects in Iowa, and with the economy and such, the whole thing must have gone busted. The entire Board must have been into this. The memo on July 6 leaves no time for anyone to react considering the Monday's event. IMO, the e-mail was an informal way to thank everyone and say goodbye, and the then a fake suicide to get police protection.

Since this was not a public company, I believe the entire board was the father and the son. Nobody else. Am I correct?

Saw on CNBC that Wasendorf did appear in court wearing a blue polo shirt and looking haggard. How does someone apparently in a coma only a few days ago, appear in court so soon? Was the coma a fraud also?

it was a really totally worst personal news of the week for me.

trying to find out just how long it would take to get

even some of the money back, if anything?

totally devastated at the moment.

nakachalet@gmail.com

Big Mike 

Additional details from his confession:

Sounds like he hired some script writers from Hollywood to write this confession statement, so fake and scripted. An attempt to keep Jr. , his wife, other family members, other big boys and girls in Iowa, and U.S. Bank clean.

I say bull, his suicide was a fake, he is not alone, and authorities should look into the whole PFG gang affairs. They have substantial energy investments in Iowa (perhaps where the money was funneled to) in partnership with well connected Iowans and major Iowa's politicians in their back pocket.

It could be a conspiracy theory, but If our analytical minded authorities can't figure out this whole cover up, we need some help from MI5 and MI6 in this country.

nakachalet 

it was a really totally worst personal news of the week for me.

@nakachalet

I assume Neil Rogers from the trusted WCCI room was you broker.

Big Mike 

That was most humorous. LOL... talking heads fighting with each other... Money is not the answer... and I also don't think more "insiders" doing the regulating is the answer... answer is true accountability, checks and balances, and complete transparency. Mike

Leo Melamed is on the NFA board. You cannot find someone who knows the industry better than him.

More money won't do it and more hiring won't do it. Reputation and accountability will.

Just keep excess funds at central clearing and all the clearing members will be accountable for it.

aligator 

@nakachalet I assume Neil Rogers from the trusted WCCI room was you broker.

WWWWD wonder what would woddie do?

ThatManFromTexas 

@brevco Not if you open a new IRA account at a broker or bank. Have them transfer your IRA account from your broker into the new IRA account .

I thought he was referring to pulling the money out of a brokerage firm and taking the cash rather than moving it to another brokerage. I've transferred an IRA from one brokerage to another in the past.

The problem is, how do you know who you can trust? With my luck, I'd transfer my IRA to another brokerage and that brokerage would be shut down. It would be like those MFG accounts that were moved to PFG.

The day I found out about PFG I read that about a banker who swindled $17 million out of his bank customers, left a note/confession and disappeared. They're not sure if he left the country or committed suicide. They're looking for him, or his body. This happened in either Georgia or Florida.

aligator 

Sounds like he hired some script writers from Hollywood to write this confession statement, so fake and scripted. An attempt to keep Jr. , his wife, other family members, other big boys and girls in Iowa, and U.S. Bank clean..

Mostly agree. All their actions before the exposure incident was to prevent clients from leaving and keeping a good face. Now it's about leaving a personal legacy and Sr. deciding to be the sole fall guy, so clawback attempts can be hindered as much as possible legally from the rest of the conspirators. Similar to Madoff keeping silent.

I'm not so sure about the suicide attempt being fake. Maybe it was unexpected to the others.

Serninja 

I just thought about the NFA Assessment Fees and charges and ordered fines they receive. The NFA assessment fee, payable by FCMs with respect to futures contracts, is $.02 per side, invoiced to customers. After taking a short look at the publications of the CME regarding just of their futures volume, these numbers made me really dizzy. With due regards to these huge sums, shouldn't be indicated that "someone" audit the NFA too; simply put are they have been audited? Then also, do they release figures or balance sheets to the public? What happens with all the monies? I then took a look at the current Opportunities for carreers at NFA. Either they just started now to raise the requirements for positions or they maybe aren't able to hire the right people. A Bachelor's degree in Accounting requires also the ability to anticipate and respond to suspicious practices and analytical and communication skills. At least the latter requirements weren't available at that time. Nobody was able to "anticipate" that this theoretically could be possible and no one also had the "communication skills" to pick up the phone to verify the statements. Seemingly it doesn't matter if it's a top-tier company with triple digit millions of customer assest or a little rat-shop-broker in a one-horse town. I mean this task could have done the customer himself. Just asking the broker to provide a statement of the bank who helds the segregated accounts, that there is everything in line. Would have this made the customer feeling more reassured? No one pays the customer for that, why would he pay some one else for the same? Only if one can go beyond that, right? In relation to that, insurance companies send investigators across the states for claims that are one-thenth of a percent and a lot of them have by far less revenues then the NFA. I think insurance could help, because it's in the interest of the insurance company to prevent the insurance case. Let them do the job when it comes to risk analysis. Therefore they would do very much more, for less premium to audit the way it has to be done. Just one condition of insurance: "If the customer can't withdraw his money due to regulatory actions, this case is coverd by the insurance." Plain and simple. I've read that it could be more complicated than MF Global because it appears there is fraud involved, based on the CFTC complaint. But this frees the regulators only, if they did everything, I mean at least everything one avarage simple-minded person would do in a regulatory position. If not, there could be possibly someone else to sue with at least sufficient estate to fully satisfy claims... There have to be made deeply changes in the system, now an immediately. But foremost, the customers have to be compensated to restore the trust! Just my opinion...

You are absolutely correct. I have a friend who has been in the insurance business for almost 40 years and we discussed this very issue. He lost two accounts with PFG and he is hopping mad. He's calling for a meeting with his congressman next week....and I'm sure he'll give him an earful. An insurance company would have a vested interest in making sure proper audits are conducted and as you said, they would do the risk analysis. With all the "news" that has come out, with Sr. fudging the records/statements for 20 years....it doesn't sound like the NFA or the CTFC were doing their jobs......and it would seem that they were negligent and should be held accountable right along with Wasendorf. Maybe someone should investigate the CFTC and NFA! I can understand PFG flying under the radar for 2, maybe 3 years, but 20??!! The regulators had to have known about this a long time ago and maybe it's possible since he was on the NFA board he was given preferential treatment?

nakachalet 

it was a really totally worst personal news of the week for me. trying to find out just how long it would take to get even some of the money back, if anything? totally devastated at the moment. nakachalet@gmail.com

Nakachalet, I feel your pain. This is the 4th time for me. First was Blinder Robinson, then another small brokerage out of Baton Rouge when I lived there, then there was CMS Forex and now this. I blamed myself the first two times because I knew nothing about finance and trusted the broker. I lost my entire life savings twice! That's when I decided to take control and start learning/teaching myself to trade. I had to start from scratch. I saved every penny so I could eventually have enough to open an account and studied during every spare minute after I came home from work. It took me 15 years to get to this point. I thought doing this myself was the only safe way to insure I had a future retirement. After losing my last job 7 years ago to a corporate buyout, I decided to dive in and trade full time. Now this happens....and I'm no "spring chicken."

Keep your chin up, have faith and don't give up. We're all in this together.

aligator 

@nakachalet I assume Neil Rogers from the trusted WCCI room was you broker.

Neil was my broker and I've spoken to him twice since the shut down. He said he was forming his own company and
asked if I could wait a couple of days until he got everything set up.

He was still there answering his telephone on Tuesday and he gave me his direct line if I needed to contact him. I never spoke to Neil since I opened my account about 4 years ago until now. I signed up through WCCI. I have to admit I admire the man for still answering his phone after being told he no longer had a job! He also told me he was due about $XX,XXX in commissions but was informed he wasn't going to be paid, but he was still there answering his phone!

Now that, to me, is dedication to his clients. He didn't sound angry, didn't try to put me off and didn't make excuses. He sounded genuinely concerned.

kk240 

Mike Thanks for this document, I just needed signature of special agent from FBI

uhmmmm....what are you planning to do with the FBI signature? Photoshop??
Can I help? I need something to keep me busy 'til I can open another account.

More missing customer funds triggers Gensler resignation call - Political Watch - MarketWatch

Insight: PFGBest regulator known for inexperienced auditors | Reuters

"One NFA employee lists on her LinkedIn profile interning at furniture manufacturer Allsteel and working at an Iowa bookstore as her only work experience before the NFA hired her as an auditor in 2008.

Another NFA auditor's job before being hired in June 2011 was as a pricing intern for Walt Disney World according to his LinkedIn page."

Makes me sick to my stomach.

"Brownie, you're doing a heck of a job."

Why can't we sue the NFA and CFTC for negligence? Because it would be locked up in courts forever?

brevco 

Nakachalet, I feel your pain. This is the 4th time for me.

That's horrible. Sorry this happened to you that many times. Glad to hear you fought through it. Before I started watching CNBC's "American Greed" I had no idea all these variations of broker ponzis' happened so often and for that much money and with so many clients losing life savings after life savings in all these schemes. It's like it's swept under the rug in the news for the most part or localized. Used to be a million dollars was a dream come true. Now these ponzi schemers go for tens or hundreds of millions or closer to a billion.

nakachalet 

it was a really totally worst personal news of the week for me. trying to find out just how long it would take to get even some of the money back, if anything? totally devastated at the moment. nakachalet@gmail.com

You hang in there bud! Just walk away from the headlines...hang out with family and friends.

I truly feel for you. Keep faith in something other than money and the stupidity of this planet.

The World is a Us vs Them mentality now. A great Pink Floyd tune btw.

Bastards in all forms everywhere.

olobay 

More missing customer funds triggers Gensler resignation call - Political Watch - MarketWatch Insight: PFGBest regulator known for inexperienced auditors | Reuters "One NFA employee lists on her LinkedIn profile interning at furniture manufacturer Allsteel and working at an Iowa bookstore as her only work experience before the NFA hired her as an auditor in 2008. Another NFA auditor's job before being hired in June 2011 was as a pricing intern for Walt Disney World according to his LinkedIn page." Makes me sick to my stomach. "Brownie, you're doing a heck of a job." Why can't we sue the NFA and CFTC for negligence? Because it would be locked up in courts forever?

That makes two of us. They're very good at making excuses and pointing fingers at each other. There are so many layers in government agencies that there are plenty of others to blame. So rather than expedite a resolution, they waste time placing blame. And a call for Gensler's resignation? It is my understanding he is appointed by the president. I think he should stay right where he is, sit in the hot seat and be forced to endure the humiliation and disgrace....then after his participation in all this is exposed, he should be fired and not be given the opportunity to resign voluntarily. Yes, it would be tied up in the courts forever. Anything to do with the federal government takes twice as long to accomplish. And the attorneys are the only ones who will make out like a bandit.

July 13, 2012


Dear Valued Customers,

In light of the recent news concerning alleged improprieties at PFG, AMP wants to provide our customers with more specific details about our operations.
Financials:
AMP is one of the few FCM's today that does not engage in any business other than the processing of trades for Futures and Commodity Customers. We are not dependent on interest income or alternative investments for our profitability - we process electronic futures trades for our customers- it's our business.
What we do not do?
No proprietary trading
No Exchange Floor Trading - Positions Reported to Clearing Firm only every 15 minutes
(Only electronic exchange trades by AMP customers - P/L to the tick)
No exposure to mortgage backed securities
No exposure to European debt
No activity in OTC or Off-Exchange Trading (such as Forex)
No Naked Short Options Selling (Unlimited Risk) by AMP Customers
What we do?
AMP reports its financial position on a daily and monthly basis to NFA and CFTC.
Mitigate Market Risk/Exposure:
AMP risk controls are marked to the tick and tradable markets are limited to the major liquid markets - no exotic/illiquid instruments.
We take regulation seriously - Our History:
Zero Regulatory Actions against AMP (IB or FCM, since 2005 inception) by the neither NFA nor CFTC.

AMP Futures: BASIC Details
AMP Trading: BASIC Details
AMP Clearing: BASIC Details
Size:
AMP is the entire 24th Floor of the LaSalle/Wacker building in Chicago.
AMP 24 hour Help Desk is fully staffed - 15 agents during US trading hours and 4 agents during non-US trading hours.
AMP 24 hour Trade Desk is fully staffed - 4 agents during US trading hours and 2 agents during non-US trading hours.
AMP 24 hour Risk Department is fully staffed - 6 agents during US trading hours and 2 agents during non-US trading hours.
Should you have any direct questions not answered, please contact me directly via email: dan@ampclearing.com

If you would like to get more information about our services visit our website: NinjaTrader | AMP Global Clearing (FCM)

Sincerely,

Dan Culp
President
AMP Global Clearing



From one of my brokers,I keep segregated funds due to the failures we all know to well. Spread out the risk of corruption that is blatant with some and our Gov failing us. Nothing new,faces are different.


Okie dokie

Brandt: No Faith in `Inept' CFTC on Peregrine Probe: Video - Bloomberg

brevco 

I thought he was referring to pulling the money out of a brokerage firm and taking the cash rather than moving it to another brokerage. I've transferred an IRA from one brokerage to another in the past. The problem is, how do you know who you can trust? With my luck, I'd transfer my IRA to another brokerage and that brokerage would be shut down. It would be like those MFG accounts that were moved to PFG. The day I found out about PFG I read that about a banker who swindled $17 million out of his bank customers, left a note/confession and disappeared. They're not sure if he left the country or committed suicide. They're looking for him, or his body. This happened in either Georgia or Florida.

@brevco

Open the IRA at your bank, FDIC insured $100,000 per social security number .

olobay 

More missing customer funds triggers Gensler resignation call - Political Watch - MarketWatch Insight: PFGBest regulator known for inexperienced auditors | Reuters "One NFA employee lists on her LinkedIn profile interning at furniture manufacturer Allsteel and working at an Iowa bookstore as her only work experience before the NFA hired her as an auditor in 2008. Another NFA auditor's job before being hired in June 2011 was as a pricing intern for Walt Disney World according to his LinkedIn page." Makes me sick to my stomach. "Brownie, you're doing a heck of a job." Why can't we sue the NFA and CFTC for negligence? Because it would be locked up in courts forever?

Agree. I am not a legal expert, but as the industry pays these NFA fees for a service, namely protection, why should a law suit not make any sense?

Thanks for the links, very interesting stuff... Gensler and Corzine working at the same time at Goldman... it's an old boys network... I remember back when I worked at a small M&A firm, we hired a colleague from Goldman... I remember very well that he told me that the whole capital markets have been invented to screw the man in the street... seems like this is true in many different ways...

I am wondering whether the companies of the other NFA directors or other cases of PO Box bank statement verifications or the usage of small auditors are now scrutinized with more intensity... if they take this seriously, they would do it...

I was wondering also, how one can do this for 20 years from a psychological point of view... I mean, what kind of person do you have to be to do that? What are your thought processes and feelings during this time? How can you live with that for so long? Okay, finally he couldn't (if it was not fake, what I do not believe), but 20 years is a veeeerryyy long time...

A psychological profile of Wasendorf Sr. would be interesting... (though it will not help to get any money back)

brevco 

You are absolutely correct. I have a friend who has been in the insurance business for almost 40 years and we discussed this very issue. He lost two accounts with PFG and he is hopping mad. He's calling for a meeting with his congressman next week....and I'm sure he'll give him an earful. An insurance company would have a vested interest in making sure proper audits are conducted and as you said, they would do the risk analysis. With all the "news" that has come out, with Sr. fudging the records/statements for 20 years....it doesn't sound like the NFA or the CTFC were doing their jobs......

brevco, thanks for your consent. Then your friend surely knows how insurance companies are working. They would never accept this (bad black'n white copies, hand written account statements, no further proof etc.).

And furthermore, how many times could you as an insurance advisor pay out an insure benefit just by oral statement before you would be sued for fraud? How many times did you get a loan just by submitting blottesque statements?

As long as it is just segregated customer money and the whole integrity of the us futures and bank industry, regulatory authorities and governments on stake, I am asking what else?

'Brownie you are doing a heck of Job'-Bush Jr

+10

Sums it up nicely.


I thought this behavior was in the rear view window Obama? The buck stops at your desk NOW!

Here's an interview with James Koutoulas of the Commodity Customer Coalition recorded on CFRN. Most interesting part of the interview is the first 10-15 minutes. James spoke with some people at PFG and it is my understanding that with the assets that are frozen, James estimates that PFG customers should be able to get back between 55% - 70% of their funds. That does not include going after anything that Wasendorf might have embezzled so we might actually get whole once this fiasco is all over but who knows how long that will take?

Article in Futures Magazine mentioning James Koutoulas interview.

PFGBest revelations shock industry

CCC held a public conference call on the PFG situation on Wednesday evening. Koutoulas said that the fact that PFG assets have been frozen and the firm is in a Chapter 7 liquidation instead of Chapter 11 reorganization is a positive for customers. He also noted that the bankruptcy filing indicates that PFG has considerably more assets than liabilities, which is a positve for customers, though he added, "It is too early to tell [what assets are available to customers]."

Attorney Greg Collette who has been working with the CCC on MF Global stated that he would be filing a class action suit against PFG. Details can be found through the CCC website.

In other PFG news Bloomberg is reporting that U.S. District Judge Rebecca Pallmeyer appointed Michael M. Eidelman of Chicago’s Vedder Price PC as receiver, placing him in charge of the business.

Bloomberg is also reporting that distressed debt traders are putting a very low price on PFG customer claims. According to Bloomberg CRT Capital Group LLC is valuing those claims between 22¢ and 25¢ on the dollar.

ThatManFromTexas 

Article in Futures Magazine mentioning James Koutoulas interview. PFGBest revelations shock industry CCC held a public conference call on the PFG situation on Wednesday evening. Koutoulas said that the fact that PFG assets have been frozen and the firm is in a Chapter 7 liquidation instead of Chapter 11 reorganization is a positive for customers. He also noted that the bankruptcy filing indicates that PFG has considerably more assets than liabilities, which is a positve for customers, though he added, "It is too early to tell [what assets are available to customers]."

According to that conference call, James Koutoulas said that if the numbers in the bankruptcy filing (

PFGBest Accounts Frozen (PFG scandal big thread) Source: PGF Files Chapter 7 | ZeroHedge ( 99757379 Mike

) are accurate, worst case scenario is that PFG customers will get 45% of their funds back to 100% of their funds.

traderwerks 

Leo Melamed is on the NFA board. You cannot find someone who knows the industry better than him. More money won't do it and more hiring won't do it. Reputation and accountability will. Just keep excess funds at central clearing and all the clearing members will be accountable for it.

I agree with that last sentence.

I also think that more money would allow them to hire people with experience instead of kids just out of college following a poorly designed checklist. Or does the NFA do that on purpose to protect it's dues paying members?

The majority of posters here if doing the PFG audit would have either noticed the hand written bank statement balance or would have directly contacted the bank to verify the balances. Or they would have noticed the Iowa PO Box address on the statement. It's just common sense. Do any banks use a PO Box address for important forms? I doubt it.

PFGBest to retain some employees through bankruptcy

New trustee Ira Bodenstein.

Not quite a perp walk, more like a perp drive-by.

UPDATE: PFG founder Wasendorf makes first court appearance

Good link to come back to as the story unfolds.

Fallout at Peregrine Financial Group

New thread for Atlas Ratings discussion

Atlas Ratings on FCMs Looking for a futures broker and wonder whether the ratings from Atlas are valid? I really like what I read about Matt and his team at Optimus, but Vision Financial is rated #50 by Atlas. That seems to be only marginally better than PFGBest/Peregrine …

Mike

olobay 

Not quite a perp walk, more like a perp drive-by. UPDATE: PFG founder Wasendorf makes first court appearance

"FBI agents said in court records that Wasendorf admitted to embezzling money from PFG for more than 20 years. They also show that agents were talking to Wasendorf at University of Iowa Hospitals and Clinics in Iowa City on Monday, within hours of the suicide attempt."

So the report that he was in a coma was not true.

brevco 

The majority of posters here if doing the PFG audit would have either noticed the hand written bank statement balance or would have directly contacted the bank to verify the balances. Or they would have noticed the Iowa PO Box address on the statement. It's just common sense. Do any banks use a PO Box address for important forms? I doubt it.

Does anyone really believe U.S. Bank did not know what was going on? They should be the first to notice a company with the size and activity of PFG should have more than just $5M in their segregated account. After all, banks know more about segregation than anyone, they would spot a disparity in no time.

Don't kid me, it is more than just Wasendorf. He is just the fall guy. Let's see if U. S. Bank provided any leverage to Wasendorf and his Iowan partners in energy investments.

ThatManFromTexas 

@brevco Open the IRA at your bank, FDIC insured $100,000 per social security number .

I was in banking for 10 years. When I moved to Denver I transferred everything to ....US Bank. Over the years I learned more about other products and eventually transferred my 401K into an annuity at Midland. It guarantees never to lose the principal. So far, it's held true. When everyone else lost money with a market downturn, I didn't make money, but I didn't lose either. After my 10 year stint in banking, I went to work for the RTC when it was created to bail out the savings and loans. That's where I learned details about the corruption that brought the S&L industry to their knees. We liquidated their assets and re-packaged the mortgages and auctioned them to investors. My own father was a victim of an S&L shutdown. I couldn't tell him that his S&L was about to be seized, and I tried to "hint" that he needed to move to a bank. He didn't take the "hint." lol

There was talk way back then that the banks were next. When I moved here and bought my home, my mortgaged changed hands 12 times in 13 years through the sale of mortgage packages among all the banks (not S&L's). Through my experience at RTC, I knew what the banks were doing, but there was nothing I could do. Refinancing myself was no guarantee that I could keep my mortgage with the bank I chose to do business with.

I've often wondered if it is even possible for the FDIC to go bankrupt? All the talk about Romney and his offshore bank accounts.....have you ever heard of anyone with an offshore account who lost all their money?

We've already seen what's happened with many banks. I truly believe there's more to come...it's just a matter of time. In these times, sadly, I don't trust anyone who is charged with the responsibility of handling my money.

A while back I watched an interesting video on YouTube about whether or not there really is any physical gold in Fort Knox. They were saying that if there IS any physical gold, it doesn't belong to the US because the US has used it as "collateral" to borrow cash to pay its debts. On the other hand, how much of what is on YouTube can you believe? And I read over 20 years ago that China was slowly and secretly buying up as much physical gold as they could get their hands on. All this is so mind boggling to me.

Darn it, another lie; "What Happens in Vegas Stays in Vegas." This one from then Mayor Oscar Goodman. Now our fine city is involved, as if we did not have enough of our own.

Read on:

CEDAR FALLS, Iowa --- Russell Wasendorf Sr. married his fiance in Las Vegas June 30, just nine days before he attempted suicide back home in Cedar Falls.
According to Clark County, Nev., records, Wasendorf and Nancy Paladino obtained a marriage license June 30, the marriage was recorded on July 6.
Paladino and Wasendorf had been engaged since last winter, with a wedding planned for August 4 at Bethlehem Lutheran Church in Cedar Falls.
A reception had been scheduled to follow at his home northwest of Cedar Falls.
Wasendorf had announced Paladino would manage the kitchen for the planned second myVerona restaurant in the Cedar Valley TechWorks complex.


Read More: Fallout at Peregrine Financial Group

karoshiman 

I was wondering also, how one can do this for 20 years from a psychological point of view... I mean, what kind of person do you have to be to do that? What are your thought processes and feelings during this time? How can you live with that for so long? Okay, finally he couldn't (if it was not fake, what I do not believe), but 20 years is a veeeerryyy long time... A psychological profile of Wasendorf Sr. would be interesting... (though it will not help to get any money back)

A psychological profile? Who would pay for that? The taxpayer? He's obviously an insecure buffoon with a narcissistic personality disorder. As my relatives from the deep south would say, he's not worth the gunpowder it would take to blow him up!

ron99 

"FBI agents said in court records that Wasendorf admitted to embezzling money from PFG for more than 20 years. They also show that agents were talking to Wasendorf at University of Iowa Hospitals and Clinics in Iowa City on Monday, within hours of the suicide attempt." So the report that he was in a coma was not true.

It's a State law, or etc, that when someone tries to kill themselves they have to be held for observation for xx hours. I think that is what was happening.

Mike

aligator 

Does anyone really believe U.S. Bank did not know what was going on? They should be the first to notice a company with the size and activity of PFG should have more than just $5M in their segregated account. After all, banks know more about segregation than anyone, they would spot a disparity in no time. Don't kid me, it is more than just Wasendorf. He is just the fall guy. Let's see if U. S. Bank provided any leverage to Wasendorf and his Iowan partners in energy investments.

Much of what goes on in business is built on "trust" and the good old boy's network. That's why regulatory agencies fail to do their jobs properly. There's always been the saying.....anyone can be "bought" for a price. Anytime you have humans involved, there is the risk of corruption. The ones who aren't corrupt never seem to last long in big business. And I'm sure there are some individuals who have high moral standards and integrity!

I think about the "threats" that some of these "good old boys" face. They have families to support too. They get put in situations that would be unimaginable to most of us, I'm sure. And some of them become victims themselves. It will be very interesting to watch things unfold as this investigation continues. We may never know the full story.

brevco 

A while back I watched an interesting video on YouTube about whether or not there really is any physical gold in Fort Knox. They were saying that if there IS any physical gold, it doesn't belong to the US because the US has used it as "collateral" to borrow cash to pay its debts. On the other hand, how much of what is on YouTube can you believe? And I read over 20 years ago that China was slowly and secretly buying up as much physical gold as they could get their hands on. All this is so mind boggling to me.

@brevco

I saw on the internet that all the gold had been transported by "Black Helicopters" to Area 54 so it would be easier to load on the mother ship.

aligator 

Darn it, another lie; "What Happens in Vegas Stays in Vegas." This one from then Mayor Oscar Goodman. Now our fine city is involved, as if we did not have enough of our own. Read on: CEDAR FALLS, Iowa --- Russell Wasendorf Sr. married his fiance in Las Vegas June 30, just nine days before he attempted suicide back home in Cedar Falls. According to Clark County, Nev., records, Wasendorf and Nancy Paladino obtained a marriage license June 30, the marriage was recorded on July 6. Paladino and Wasendorf had been engaged since last winter, with a wedding planned for August 4 at Bethlehem Lutheran Church in Cedar Falls. A reception had been scheduled to follow at his home northwest of Cedar Falls. Wasendorf had announced Paladino would manage the kitchen for the planned second myVerona restaurant in the Cedar Valley TechWorks complex. Read More: Fallout at Peregrine Financial Group

@aligator

Another criminal who planned to marry his girlfriend and commit suicide ...

PFGBest regulator: New technology caught $100 mln PFGBest fraud | Reuters

PFGBest regulator: New technology caught $100 mln PFGBest fraud

By Ann Saphir
CHICAGO, July 13 | Sat Jul 14, 2012 12:51am IST
(Reuters) - The National Futures Association, the regulator that PFGBest CEO Russell Wasendorf Sr. says he fooled for years, "caught" the fraud this week with new technologies, NFA's chairman told Reuters in an interview.

Wasendorf doctored paper bank statements from three different banks for 20 years to pull off the fraud, he said in a signed statement cited in a Federal Bureau of Investigation complaint on Friday.

The fraud came to a climactic end on Monday when Wasendorf tried to commit suicide near his firm's Cedar Falls, Iowa headquarters. He was hospitalized, and on Friday was arrested by FBI agents.

NFA started a new audit of PFGBest about two weeks ago and the regulator for the first time demanded Wasendorf allow its auditors an electronic, direct look at his bank accounts, NFA's non-executive chairman Chris Hehymeyer said in the interview.

Wasendorf gave NFA the authority to do so on Sunday, Hehmeyer said. On Monday, Wasendorf attempted suicide, leaving a signed statement in his car that detailed his fraud, according to the FBI complaint.

"They are the ones that uncovered this whole thing," Hehmeyer said, of NFA auditors. "If they hadn't caught him, it could have gotten a lot bigger."

ThatManFromTexas 

PFGBest regulator: New technology caught $100 mln PFGBest fraud | Reuters PFGBest regulator: New technology caught $100 mln PFGBest fraud By Ann Saphir CHICAGO, July 13 | Sat Jul 14, 2012 12:51am IST (Reuters) - The National Futures Association, the regulator that PFGBest CEO Russell Wasendorf Sr. says he fooled for years, "caught" the fraud this week with new technologies, NFA's chairman told Reuters in an interview. Wasendorf doctored paper bank statements from three different banks for 20 years to pull off the fraud, he said in a signed statement cited in a Federal Bureau of Investigation complaint on Friday. The fraud came to a climactic end on Monday when Wasendorf tried to commit suicide near his firm's Cedar Falls, Iowa headquarters. He was hospitalized, and on Friday was arrested by FBI agents. NFA started a new audit of PFGBest about two weeks ago and the regulator for the first time demanded Wasendorf allow its auditors an electronic, direct look at his bank accounts, NFA's non-executive chairman Chris Hehymeyer said in the interview. Wasendorf gave NFA the authority to do so on Sunday, Hehmeyer said. On Monday, Wasendorf attempted suicide, leaving a signed statement in his car that detailed his fraud, according to the FBI complaint. "They are the ones that uncovered this whole thing," Hehmeyer said, of NFA auditors. "If they hadn't caught him, it could have gotten a lot bigger."

Amazing the regulators are circling the wagons and acting like they did a good job. Next they will be handing out awards.

Have to love this quote "They are the ones that uncovered this whole thing," Hehmeyer said, of NFA auditors. "If they hadn't caught him, it could have gotten a lot bigger."

How could things have gotten much bigger or worse. Apparently of $200 million plus in customer funds there is only $5 million left in the account according to reports we have seen. I don't think Wasendorf could have gotten much more.

liquidcci 

Amazing the regulators are circling the wagons and acting like they did a good job. Next they will be handing out awards. Have to love this quote "They are the ones that uncovered this whole thing," Hehmeyer said, of NFA auditors. "If they hadn't caught him, it could have gotten a lot bigger." How could things have gotten much bigger or worse. Apparently of $200 million plus in customer funds there is only $5 million left in the account according to reports we have seen. I don't think Wasendorf could have gotten much more.

Well, that was only 20 years of fraud. If he had run it for another 50 years, it could have been over a billion is losses

Mike

Big Mike 

Well, that was only 20 years of fraud. If he had run it for another 50 years, it could have been over a billion is losses Mike

True I did not consider the potential forward losses if he kept going. But a guy fooling them for 20 years with photo shop they should not be congratulating themselves for catching him. They bear great responsibility for the $200 million loss imo.

Since he has been forthcoming on the confession, I really hope we get to hear details as to why he did this. Specific details, like the nature of the losses with his company, and how year after year those changed, etc.

Mike

Mike without endorsing anyone could I please ask you who your broker is and why you chose them. I am concerned right now and I have just begun to make progress.

Thanks, Hector

hector24 

Mike without endorsing anyone could I please ask you who broker is and why you chose them. I am concerned right now and I have just begun to make progress. Thanks, Hector

I have accounts with Interactive Brokers, Velocity Futures, Mirus Futures, Optimus Futures, FXCM, MB Trading, and optionsXpress.

Mike

liquidcci 

Amazing the regulators are circling the wagons and acting like they did a good job. Next they will be handing out awards.

@liquidcci

CME Group: Current system must be re-evaluated - MarketWatch


"Without question, the current system in which customer funds are held at the firm level must be reevaluated," the world's largest futures exchange operator by volume said in a statement.


UPDATE 1-U.S. approves new rules to protect futures customers | Reuters

U.S. futures regulators approved new regulations on Friday to shore up protection of brokerage customer funds following last year's collapse of MF Global.

The Commodity Futures Trading Commission approved the rule on the same day that Russell Wasendorf Sr., the founder of another failed brokerage firm, PFGBest, was arrested on fraud charges in connection with allegedly misappropriating customer money.

ThatManFromTexas 

@liquidcci UPDATE 1-U.S. approves new rules to protect futures customers | Reuters U.S. futures regulators approved new regulations on Friday to shore up protection of brokerage customer funds following last year's collapse of MF Global. The Commodity Futures Trading Commission approved the rule on the same day that Russell Wasendorf Sr., the founder of another failed brokerage firm, PFGBest, was arrested on fraud charges in connection with allegedly misappropriating customer money.

This would not have helped in the PFG case as Wasendorf Snr was the one (and only) person signing off transactions on the segregated funds account anyway.

Quote from Reuters about new CFTC rule:

"A measure known as the "Corzine rule" would require top executives at futures brokers to sign off on major withdrawals from customer accounts. A major withdrawal would be considered anything more than 25 percent of a customer's excess funds."

As sargeant Shultz on Hogans Hero used to say I see Nuthin...Nuthin





.

liquidcci 

How could things have gotten much bigger or worse. Apparently of $200 million plus in customer funds there is only $5 million left in the account according to reports we have seen. I don't think Wasendorf could have gotten much more.

Like commonly shown in episodes of CNBC's American Greed, the ponzi perpretrator may not only be making wild massive losing bets, but making losing investments in other areas such as real estate or just plain siphoning money from the segregated accounts to fund his and his co-conspirators' lifestyle. Sr. had reportedly bought into a restaurant , some local factory, an incomplete industrial property under construction, and a private jet that cost at least $20 million. Probably there are also vacation homes, vehicles, yachts, maybe private land property and foreign bank accounts out there too. Plus the family and those inner circles' individual perks and trappings to maintain.

Big Mike 

I have accounts with Interactive Brokers, Velocity Futures, Mirus Futures, Optimus Futures, FXCM, MB Trading, and optionsXpress. Mike

@Big Mike,

We know that you need to keep everyone happy and seem to have covered everyone out there. So, any favorites?

aligator 

@Big Mike, We know that you need to keep everyone happy and seem to have covered everyone out there. So, any favorites?

Those are my favorites

Mike

steve2222 

This would not have helped in the PFG case as Wasendorf Snr was the one (and only) person signing off transactions on the segregated funds account anyway. Quote from Reuters about new CFTC rule: "A measure known as the "Corzine rule" would require top executives at futures brokers to sign off on major withdrawals from customer accounts. A major withdrawal would be considered anything more than 25 percent of a customer's excess funds."

@steve2222

You are correct sir...

If the following was imposed on all FCM's all the time .... this is the only thing that would make a difference ....

.... the NFA regulator for the first time demanded Wasendorf allow its auditors an electronic, direct look at his bank accounts....

10 Key Details in the Peregrine Financial Collapse (JEF, JPM, USB) Good review of what transpired last week.

PFGBest Update: Ignore the Idiots | Attain Capital Managed Futures Blog

olobay 

10 Key Details in the Peregrine Financial Collapse (JEF, JPM, USB) Good review of what transpired last week. PFGBest Update: Ignore the Idiots | Attain Capital Managed Futures Blog

If Attain is correct ... that would certainly be good news!

I wanted to share a different side to the PFG story, one about some of the cool people that worked there. PFG was pretty big on trader education and so recently they started offering 12-week introductory courses. They were free if you signed up in advance. You didn't need to have an account with them to participate (I didn't have one). They first offered Introduction to Futures, and then earlier this year added Intro to Forex and Intro to Options. Curt Wagaman taught Futures and Options and Steve Nurre taught Forex.

I signed up, a little skeptical at first, for the Forex class which started in March and finished a few weeks ago. It was very much like a college class. Two lectures a week, 90-120 minutes each, along with homework and exams, if you wanted the completion certificate afterwards. The focus really was on education. There was some PFG cheerleading of course, but no pressure. We even had guest lectures from Jimmy Young and Bob Iaccino.

Anyway, the summer Futures class was to start on July 10th, the day after the fraud was discovered. And the summer Forex class was going to start on the 17th. There was of course no class on the 10th as the instructors were out of jobs. But during the week both guys got together and then held an informational webinar on Friday.

As educators they didn't want to let their students down, so they decided to hold 5 week courses...for free. Futures is going to start on the 17th and Forex on the 24th. I was stunned that these guys would work for free like this. The core material should remain intact because you won't have any info about PFG and no midterm and final exam reviews.

The other reason for a 5 week course is because, as Steve Nurre said in the webinar, "I don't know where I'll be in 6 weeks..."

Big Mike 

I have accounts with Interactive Brokers, Velocity Futures, Mirus Futures, Optimus Futures, FXCM, MB Trading, and optionsXpress. Mike

Thanks Mike, just wanted to get a little insight from you on what your thinking is.

Thanks,
Hector

PS: Great room by the way, I have learned a lot here. And I really like the way you are very
interactive with your members and how you police the site to make sure "Vendors" do not invade.

Big Mike 

I have accounts with Interactive Brokers, Velocity Futures, Mirus Futures, Optimus Futures, FXCM, MB Trading, and optionsXpress. Mike

@Big Mike

Who does Velocity clear through?

ThatManFromTexas 

@Big Mike Who does Velocity clear through?

Multiple options, but am thinking NewEdge. But best to ask them directly.

Sent from my DROID RAZR using Tapatalk 2

Zelek11 

I wanted to share a different side to the PFG story, one about some of the cool people that worked there. PFG was pretty big on trader education and so recently they started offering 12-week introductory courses. They were free if you signed up in advance. You didn't need to have an account with them to participate (I didn't have one). They first offered Introduction to Futures, and then earlier this year added Intro to Forex and Intro to Options. Curt Wagaman taught Futures and Options and Steve Nurre taught Forex. I signed up, a little skeptical at first, for the Forex class which started in March and finished a few weeks ago. It was very much like a college class. Two lectures a week, 90-120 minutes each, along with homework and exams, if you wanted the completion certificate afterwards. The focus really was on education. There was some PFG cheerleading of course, but no pressure. We even had guest lectures from Jimmy Young and Bob Iaccino. Anyway, the summer Futures class was to start on July 10th, the day after the fraud was discovered. And the summer Forex class was going to start on the 17th. There was of course no class on the 10th as the instructors were out of jobs. But during the week both guys got together and then held an informational webinar on Friday. As educators they didn't want to let their students down, so they decided to hold 5 week courses...for free. Futures is going to start on the 17th and Forex on the 24th. I was stunned that these guys would work for free like this. The core material should remain intact because you won't have any info about PFG and no midterm and final exam reviews. The other reason for a 5 week course is because, as Steve Nurre said in the webinar, "I don't know where I'll be in 6 weeks..."

--------------------
Money is money; I get it.

However, BULLSHIT on your 1 post 'whatever'~~after the 'crisis' breaks.

Fact is that PFG forex was a bucket shop; don't you placate me--no way.

I speak for learned posters and yep; I live my online profile without regret and say what I have to say

I am a 27+ year full-time trader.

Don't post this bullshit propoganda (your 1 post)--I don't have any use--no bloody use for your 1 time 'toss-off' post. Nope.

I stand behind this post and if Big Mike has a problem with that; he and I will resolve it and I will honor his opinion.

You sir, with all due respect--appear to be full of shit.

peace

hedvig

ThatManFromTexas 

@Big Mike Who does Velocity clear through?

official answer by bobk from VF post #158 New edge and ABN Amro

Experience with Velocity Futures? Hello all, Anyone using/have used Velocity Futures? ( I am looking to compare them to Mirus specifically, but would appreciate any feedback you may have had with them. Thanks, Gary

redratsal 

official answer by bobk from VF post #158 New edge and ABN Amro Experience with Velocity Futures? Hello all, Anyone using/have used Velocity Futures? ( I am looking to compare them to Mirus specifically, but would appreciate any feedback you may have had with them. Thanks, Gary

Executive Bios : GHF Group : Clearing and trading futures and options on international exchanges.

ThatManFromTexas 

If Attain is correct ... that would certainly be good news!

This is disturbing: "CRT Capital has already swooped in and offered to buy up customer claims from Peregrine victims for 20 to 25 cents on the dollar. If nothing else, this is a sign that CRT is pessimistically handicapping the outcome of the Peregrine customer recoveries -- the lowest price CRT paid for MF Global claims was 60 cents on the dollar."

Sounds like more greed.

researcher247 

-------------------- Money is money; I get it. However, BULLSHIT on your 1 post 'whatever'~~after the 'crisis' breaks. Fact is that PFG forex was a bucket shop; don't you placate me--no way. I speak for learned posters and yep; I live my online profile without regret and say what I have to say I am a 27+ year full-time trader. Don't post this bullshit propoganda (your 1 post)--I don't have any use--no bloody use for your 1 time 'toss-off' post. Nope. I stand behind this post and if Big Mike has a problem with that; he and I will resolve it and I will honor his opinion. You sir, with all due respect--appear to be full of shit. peace hedvig

Zelek11 

I wanted to share a different side to the PFG story, one about some of the cool people that worked there. PFG was pretty big on trader education and so recently they started offering 12-week introductory courses. They were free if you signed up in advance. You didn't need to have an account with them to participate (I didn't have one). They first offered Introduction to Futures, and then earlier this year added Intro to Forex and Intro to Options. Curt Wagaman taught Futures and Options and Steve Nurre taught Forex. I signed up, a little skeptical at first, for the Forex class which started in March and finished a few weeks ago. It was very much like a college class. Two lectures a week, 90-120 minutes each, along with homework and exams, if you wanted the completion certificate afterwards. The focus really was on education. There was some PFG cheerleading of course, but no pressure. We even had guest lectures from Jimmy Young and Bob Iaccino. Anyway, the summer Futures class was to start on July 10th, the day after the fraud was discovered. And the summer Forex class was going to start on the 17th. There was of course no class on the 10th as the instructors were out of jobs. But during the week both guys got together and then held an informational webinar on Friday. As educators they didn't want to let their students down, so they decided to hold 5 week courses...for free. Futures is going to start on the 17th and Forex on the 24th. I was stunned that these guys would work for free like this. The core material should remain intact because you won't have any info about PFG and no midterm and final exam reviews. The other reason for a 5 week course is because, as Steve Nurre said in the webinar, "I don't know where I'll be in 6 weeks..."

There is a lot of money to be made in teaching trading courses. I don't know Steve or Curt and as long as I've been with PFG I never took advantage of their courses/education. But, they are probably just as much in shock as everyone else over this mess. They are probably just trying to "stay in the game" and do something to stay busy/involved until they figure out their next step. It is quite possible they might start their own educational program when the dust settles (and charge for it). Or, they might move to another brokerage and take their educational/teaching skills with them. I've taken advantage of "free" education over the years and also spent big $$ for others. Some were good, some were not as good. But for anyone who just lost their job, to be willing to spend their time (possibly without pay), to help others is not a bad thing. I'm sure PFG had some good employees and their lives have been turned upside down too. The action of these two guys (Steve and Curt) speak to their personal integrity and the actions of Wasendorf are not necessarily a reflection of everyone at PFG. (This is just my opinion.)

And, Hedvig, I'm upset over this too. This is the 4th time I've lost money with brokerages over the last 30 years through no fault of my own. Two of those times literally wiped me out so I had to start over more than once. But I appreciate reading the opinions of others, even if I don't necessarily agree with them.

Thank you, Zelek11 for sharing.

brevco 

This is disturbing: "CRT Capital has already swooped in and offered to buy up customer claims from Peregrine victims for 20 to 25 cents on the dollar. If nothing else, this is a sign that CRT is pessimistically handicapping the outcome of the Peregrine customer recoveries -- the lowest price CRT paid for MF Global claims was 60 cents on the dollar." Sounds like more greed.

@brevco, I think it is important to note the MF Global and PFG situations are entirely different beasts. Bear in mind MFGlobal used client funds to collateralize a massively leveraged $6b sovereign debt bet caused by a new CEO who wanted to turn MF Global into an investment bank.

They took advantage of legal re-hypothecation rules to use client funds to back the broker's own trades and borrowing. It was in the agreements clients signed with MF-Global. That is why nobody went to jail from MF Global. This loophole needs to be closed. My understanding is the brokerage borrowing rules allow firms to use client money to buy assets in their own name. Goldman and many other investment banks have been doing this for years so using an investment bank as your broker may not be a good idea.

So with MF Global you had money transferred to various institutions (such as $600m to JP Morgan) that could potentially be clawed back plus I assume liquidations of the sovereign debt position in itself. In other words at the time of liquidation the liquidator knew there were assets to recover.

PFG

With PFG it was blatant theft of client funds with what appears to be minimal assets to recover. The offer from CRT may appear to be generous in light of this as the risk of recovery appears to be much lower than MF Global. The lawsuits could keep this going for 5+ years . This is no different to any distressed debt sale situation. The price is generally low and then increases if more assets will be recovered than first thought.

Cheers
DJ

CME to Open Fund Set Up After MF Global for Peregrine Clients - Deal Journal - WSJ

Farmers will get some money back from the CME.

Russell Wasendorf Sr., CEO Of PFGBest, Faces 'Up To Decades In Prison'

djkiwi 

PFG With PFG it was blatant theft of client funds with what appears to be minimal assets to recover. The offer from CRT may appear to be generous in light of this as the risk of recovery appears to be much lower than MF Global. If anything the offer seems a bit high as the lawsuits could keep this going for 5+ years . This is no different to any distressed debt sale situation. The price is generally low and then increases if more assets will be recovered than first thought. Cheers DJ

I don't care what people write in a forum or what reporters write in their articles about the potential return of customer funds. I would rather believe James Koutoulas from the Commodity Customer Coalition, who helped MFGlobal customers get 80% back and who has said he will do the same for PFG customers. And in the interview on CFRN which I posted, he said that after having spoken with PFG employees, he believes that only with the frozen assets already in PFG accounts, we should expect to get anywhere from 55% - 70% of our funds returned. CRT Capital would not offer to buy debt for 20 - 25 cents on the dollar if they didn't think they could collect at least double from PFG.

olobay 

Russell Wasendorf Sr., CEO Of PFGBest, Faces 'Up To Decades In Prison'

He will never get out for the remainder of his natural life that's for sure But what's the point? Hes already so old. I really think they should bring back the death penalty for financial crimes of this magnitude.