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PFGBest Accounts Frozen (PFG scandal big thread)


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PFGBest Accounts Frozen (PFG scandal big thread)

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  #1 (permalink)
 liquidcci 
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Lets hope this is not another MF Global.

US futures broker PFGBest says its funds on hold | Reuters

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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 TradeFlightPlan 
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this is the email that was sent to customers:


“Due to a recent emergency involving Russell R. Wasendorf, Sr., a suicide attempt, some accounting irregularities are being investigated regarding company accounts. PFGBEST is wholly owned by Mr. Wasendorf. Therefore, the NFA and other officials have put all funds on hold, and PFGBEST is in liquidation-only status with our clearing FCM. What this means is no customers are able to trade except to liquidate positions. Until further notice, PFGBEST is not authorized to release any funds. We will update you as any new procedures are stipulated and with any further information as it becomes available.”

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 GridKing 
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Quoting 
Apparently NFA and CFTC just walked into PFG’s offices and shut the broker down. According to our sources its Founder Russell Wasendorf attempted a suicide last night and some money may be missing from PFG’s accounts.

NFA shuts PFG down, puts it in liquidation only status, founder attempted a suicide | Forex Magnates

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 wldman 
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to people that might have an idea....reaching nobody. Is that market still funny?

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 GridKing 
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great...




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 wldman 
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very stern brush off from a well connected risk manager. I asked if there was anything to be concerned about in that news and his response was..."aren't you at Boy Scout camp this week...I though you where camping". Then we talked about fishing until I asked again and got the...gotta run, have fun at camp.
This was personal phone not firm recorded line.

Knowing this particular guy, until I hear different, I will take the response to mean that I'd be better off at camp.

Russ Jr and Mom both in senior positions at the firm that is 100% owned by the family.

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 GridKing 
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Broker's funds frozen after founder's suicide attempt | Reuters


Quoting 
One broker at the firm said that Wasendorf's son, Russ Wasendorf, Jr, told employees about the events earlier in the day, saying that a suicide note had been found alluding to some kind of financial troubles with the company.


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 madLyfe 
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i didnt know they were from iowa.. crazy stuff..

dont believe anything you hear and only half of what you see

¯\_(ツ)_/¯

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 traderwerks   is a Vendor
 
 
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They say broker, but PFGBest also is a non-clearing FCM.

I guess they can't reporter couldn't Google "Peregrine Financial Group"

Math. A gateway drug to reality.
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 wldman 
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but last night dad tried to kill himself and today Jr. is at the office sharing detail of possible financial ruin with the rank and file. Does that seem strange to anyone else?

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 aligator 
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Did anyone here with a PFG futures account get an e-mail from PFG?. I have an account with them and have not received any e-mails yet.

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 aligator 
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I went through Refco a few years back and now this one, who the heck can you trust now? I think there are more to come.

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 Devil Man 
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aligator View Post
Did anyone here with a PFG futures account get an e-mail from PFG?. I have an account with them and have not received any e-mails yet.

I got this from PFG earlier today:

Monday, July 9, 2012

Due to a recent emergency involving Russell R. Wasendorf, Sr., a suicide attempt, some accounting irregularities are being investigated regarding company accounts. PFGBEST is wholly owned by Mr. Wasendorf. Therefore, the NFA and other officials have put all funds on hold, and PFGBEST is in liquidation-only status with our clearing FCM. What this means is no customers are able to trade except to liquidate positions. Until further notice, PFGBEST is not authorized to release any funds. We will update you as any new procedures are stipulated and with any further information as it becomes available.

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 GridKing 
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https://media.futuresmag.com/futuresmag/article/2012/07/09/PFGBestNotice.pdf

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 GridKing 
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 wldman 
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I guess I'll continue the vacation type activities for a while.

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 olobay 
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I received the email too. Funny thing, I remember when the MFGlobal fiasco happened, I received an email from PFGBest telling me not to woryy. We are not like MFGlobal. This won't happen here. I wish I had kept that email.

What are the odds we see any of our money back?

This friggin' sucks big time.

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 wldman 
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I had some money set to go back to my broker. Now I'll go the other way pulling money right down to the minimum needed to trade.

What is next?

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 mrmuggins 
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olobay View Post
I received the email too. Funny thing, I remember when the MFGlobal fiasco happened, I received an email from PFGBest telling me not to woryy. We are not like MFGlobal. This won't happen here. I wish I had kept that email.

What are the odds we see any of our money back?

This friggin' sucks big time.

I also got that e-mail from them back in Nov 2011 - here is what it said -




November 1, 2011

Dear PFGBEST customers:

In the wake of MF Global Holdings Ltd. filing for Chapter 11 protection yesterday, and continuing investigation into whether and how MF Global failed to keep clients' collateral separate from its own accounts, I would like to reaffirm the absolute dedication of PFGBEST to protect you and your PFGBEST accounts.

PFGBEST is not only customer-centric, but compliance-focused. We consider it a privilege to conduct business with you and to be an advocate for you. We abide by all regulations mandated by the CFTC and the rules of NFA to hold customer funds in segregated accounts that are always separate from operational funds. PFGBEST reports daily and monthly to the regulators concerning customer segregated funds. An independent, certified audit is conducted annually in addition to periodic, regular audits by NFA and information requests from the CFTC and exchange representatives.

It is our policy to keep extra funds on deposit in our customer segregation accounts to protect you.

PFGBEST has significant excess capital. Currently, PFGBEST holds 169% of the net capital required by the CFTC and NFA. All PFGBEST capital is held in cash or U.S. Treasury bills. PFGBEST does not use subordinated debt as capital.

PFGBEST has no customer accounts with MF Global, and it is not a counterparty for PFGBEST.

PFGBEST does not do proprietary trading; the only trading done by PFGBEST is in specific instances by emerging CTAs that PFGBEST allocates funds to (always less than $100k) so that they can become "products" that the PFGBEST Managed Futures Division can then offer to customers. The total amount of funds currently allocated is less than $400k.

PFGBEST is in communication with regulators and exchanges to assist in any way with solutions for the MF Global customers impacted by recent events.

Thank you.


Russ Wasendorf, Jr.
President and Chief Operating Officer

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 Devil Man 
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I'm kinda pissed.....gonna go get in the ring and knock somebody out!

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 olobay 
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PFGBest Update- Outrage | Attain Capital Managed Futures Blog

PFGBest Is Now MF Global Part 2 As $220 Million In Segregated Client Money Has Just Vaporized | ZeroHedge

Not looking good.

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 liquidcci 
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For Immediate Release
July 09, 2012
For more information contact:
Larry Dyekman (312) 781-1372, ldyekman@nfa.futures.org

NFA takes emergency enforcement action against Chicago futures firms Peregrine Financial Group, Inc. and Peregrine Asset Management, Inc.

July 9, Chicago - National Futures Association (NFA) announced today that it has taken an emergency enforcement action against Peregrine Financial Group, Inc. (PFG), an NFA Member futures commission merchant (FCM) and Peregrine Asset Management, Inc. (PAM), an NFA Member commodity trading advisor (CTA) and commodity pool operator (CPO) located in Chicago, Illinois.

NFA has taken the Member Responsibility Action (MRA) to protect customers because PFG has failed to demonstrate that it meets capital requirements and segregated funds requirements. NFA also has reason to believe that PFG does not have sufficient assets to meet its obligations to its customers.

Effective immediately, PFG and PAM are prohibited from soliciting or accepting any additional customer accounts or customer funds, except as margin for existing positions. Additionally, PFG and PAM are prohibited from accepting or placing trades for any customer accounts except for the liquidation of existing customer positions and are prohibited from distributing, disbursing or transferring any funds, including to existing customers, without the prior approval of NFA.

PFG and PAM may request a hearing on this matter before NFA's Hearing Committee.

The complete text of the MRA is available on NFA's website ( NFA - National Futures Association).

NFA is the premier independent provider of innovative and efficient regulatory programs that safeguard the integrity of the futures markets.


NFA takes emergency enforcement action against Chicago futures firms Peregrine Financial Group, Inc. and Peregrine Asset Management, Inc.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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 kbit 
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Aubrey Lee Price: Did disgraced money manager kill himself... or secretly run off with swindled millions? | Mail Online

I don't know if this is related or not...just reading this stuff now

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 GridKing 
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I was looking at that too... not sure if related

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 GridKing 
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https://wcfcourier.com/news/local/pfgbest-unveils-new-headquarters/article_0ecca485-10d8-5613-b90c-9a04ee9f3d8f.html

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 mongoose 
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might explain where 18 of the 200 million went

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  #28 (permalink)
doctorspok
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I have an account there of which I stopped using because their accounting was bad.
There were times I thought it might be me, but every time I dug in it was mistake after mistake...
All accounting furnished on hard to read PDF files alongside an archaic customer portal (lacking any real accounting information).

Shady dealings at every corner, system malfunctions, etc...

Trading is tricky enough without a broker screwing you up...

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 binary 
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aligator View Post
Did anyone here with a PFG futures account get an e-mail from PFG?. I have an account with them and have not received any e-mails yet.

i opened and funded my account very recently. i did not receive an email either. the last email was, trade confirmation, when i closed the last trade at 1.25 pm for today.
i tried reaching the broker and no one is responding. the customer reps have no clue. will have to wait.
isnt this FDIC insured?

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 GridKing 
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gkopparam View Post
i opened and funded my account very recently. i did not receive an email either. the last email was, trade confirmation, when i closed the last trade at 1.25 pm for today.
i tried reaching the broker and no one is responding. the customer reps have no clue. will have to wait.
isnt this FDIC insured?

SIPC but I don't think that worked out very well for MF Global clients not sure ...

I don't think SIPC has much money (It's only funded by member firms)... Wasn't MF Global the first futures based entity to go EVER?


https://www.sipc.org/ might as well start now .. maybe be one of the first ...

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 SeeTrader 
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mrmuggins View Post
I also got that e-mail from them back in Nov 2011 - here is what it said -




November 1, 2011

Dear PFGBEST customers:

In the wake of MF Global Holdings Ltd. filing for Chapter 11 protection yesterday, and continuing investigation into whether and how MF Global failed to keep clients' collateral separate from its own accounts, I would like to reaffirm the absolute dedication of PFGBEST to protect you and your PFGBEST accounts.

PFGBEST is not only customer-centric, but compliance-focused. We consider it a privilege to conduct business with you and to be an advocate for you. We abide by all regulations mandated by the CFTC and the rules of NFA to hold customer funds in segregated accounts that are always separate from operational funds. PFGBEST reports daily and monthly to the regulators concerning customer segregated funds. An independent, certified audit is conducted annually in addition to periodic, regular audits by NFA and information requests from the CFTC and exchange representatives.

It is our policy to keep extra funds on deposit in our customer segregation accounts to protect you.

PFGBEST has significant excess capital. Currently, PFGBEST holds 169% of the net capital required by the CFTC and NFA. All PFGBEST capital is held in cash or U.S. Treasury bills. PFGBEST does not use subordinated debt as capital.

PFGBEST has no customer accounts with MF Global, and it is not a counterparty for PFGBEST.

PFGBEST does not do proprietary trading; the only trading done by PFGBEST is in specific instances by emerging CTAs that PFGBEST allocates funds to (always less than $100k) so that they can become "products" that the PFGBEST Managed Futures Division can then offer to customers. The total amount of funds currently allocated is less than $400k.

PFGBEST is in communication with regulators and exchanges to assist in any way with solutions for the MF Global customers impacted by recent events.

Thank you.


Russ Wasendorf, Jr.
President and Chief Operating Officer


I received a similar email from RCG. This is f'n crazy!

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  #32 (permalink)
 cory 
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I think I can safely delete these emails.

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 GridKing 
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I check these every once and a while to see what's doing and if there is something fishy I ask about it

but who knows what's real... they all seem to be dwindling over time

CFTC-Registered Firms? Excess Net Capital for April - Bloomberg

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 aligator 
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cory View Post
I think I can safely delete these emails.

Funny, I was watching one of Gary's archived webinars on Wyckoff method on PFG website the other night.

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 djkiwi 
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TradeFlightPlan View Post
this is the email that was sent to customers:


“PFGBEST is wholly owned by Mr. Wasendorf. ”

Guys, this is a classic example of why you should understand the ownership structure and insurance protections of the firm you place your funds. Personally I have very little trust in any futures broker and my overall impression of them as ethical business entities is very low. I'd be particularly leery of single owner based firms.

I'm most comfortable with IB given they are publicly listed, I can review their annual report and at least there is a share price to see signs of trouble. It's not perfect but better than most private firms where you have little idea of their financial condition.

I also have concerns about IB as well. Concerns outlined in this thread and post and these should be concerns with any broker in my opinion.



We also saw in the case with MF Global segregation rules were pretty much ignored. I read an alarming article awhile ago how Merrill lynch was trying to co-mingle some "dirty laundry" into some BAC FDIC insured customer accounts. See article below...

https://www.bloomberg.com/news/2011-10-18/bofa-said-to-split-regulators-over-moving-merrill-derivatives-to-bank-unit.html


Cheers
DJ

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 traderwerks   is a Vendor
 
 
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I'm most comfortable with IB given they are publicly listed, I can review their annual report and at least there is a share price to see signs of trouble. It's not perfect but better than most private firms where you have little idea of their financial positions.


DJ

MFGlobal was publicly listed.

Just sayin

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 aligator 
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 itrade2win 
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I check these every once and a while to see what's doing and if there is something fishy I ask about it

but who knows what's real... they all seem to be dwindling over time

CFTC-Registered Firms? Excess Net Capital for April - Bloomberg

Velocity Futures assets have dropped from $678,123 to $91,003 which raises an eyebrow for me.


Edit: After further review, I mistakenly misread the columns backwards and Velocities assets have increased based on the article read.

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 vegasfoster 
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Velocity Futures assets have dropped from $678,123 to $91,003 which raises an eyebrow for me.

The header is missing, but it looks like what you are showing is increasing.

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 GridKing 
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yeah the months go from right to left for some reason ... I guess they are all so used to doing everything backwards

it makes everyone else look fantastic though doesn't it ...

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 itrade2win 
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Yeah, you are correct I mistaken Jan for June, my bad. My trading went the same way today. I shorted where I should have went long. Just one of those off days.

Thanks,
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 liquidcci 
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Apparently "Customer segregated funds" means nothing. Seems way to easy for someone in a firm to dip their greedy little hands into these funds to cover their own stupidity. So many risks in trading this should not be one of them. These funds need to be walled and somehow monitored by a third party. May need a system wide revamp where once funds go into these accounts there is some type of check and balance that does not allow the firm into these funds without a third party releasing them.

So sorry for customers of PFG.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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 GridKing 
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Isn't this why everyone started the whole market sweep thing end of day, so they could count our money with theirs? Has that always been the case? I remember seeing the email years ago and thought it was strange and would not be to benefit me....

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Yeah, you are correct I mistaken Jan for June, my bad. My trading went the same way today. I shorted where I should have went long. Just one of those off days.

Thanks,
Ryan

Would you please edit your original post, some people may not see the later posts.

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 itrade2win 
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Would you please edit your original post, some people may not see the later posts.

Mike


Sure! Yeah that could be damaging.

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 olobay 
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This is from Stock & Commodities magazine.



What a joke.

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Apparently "Customer segregated funds" means nothing. Seems way to easy for someone in a firm to dip their greedy little hands into these funds to cover their own stupidity. So many risks in trading this should not be one of them. These funds need to be walled and somehow monitored by a third party. May need a system wide revamp where once funds go into these accounts there is some type of check and balance that does not allow the firm into these funds without a third party releasing them.

So sorry for customers of PFG.

I feel sorry for the PFG and MFGlobal customers.

"Customer segregated funds" means something, just it doesn't mean anything when faced with someone that will commit fraud. These guys sent segregation reports showing the money was segregated and safe. The owner lied and stole / embezzled the "excess" margin.

The problem is that FCM's get to play with the 'excess' margin to earn interest. Margin that is held for positions is 'walled' and monitored. Neither PFG or MFGlobal touched the position margin because that is checked.

I think treating position margin and excess margin the same would solve the problem. FCM's would scream, since use excess margin to make extra profit.

Hopefully we will get at least a perp walk out of this one. Unlike MF Global

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 Gabriyele 
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traderwerks View Post
I feel sorry for the PFG and MFGlobal customers.

"Customer segregated funds" means something, just it doesn't mean anything when faced with someone that will commit fraud. These guys sent segregation reports showing the money was segregated and safe. The owner lied and stole / embezzled the "excess" margin.

The problem is that FCM's get to play with the 'excess' margin to earn interest. Margin that is held for positions is 'walled' and monitored. Neither PFG or MFGlobal touched the position margin because that is checked.

I think treating position margin and excess margin the same would solve the problem. FCM's would scream, since use excess margin to make extra profit.

Hopefully we will get at least a perp walk out of this one. Unlike MF Global

I agree need some type of solution where this is so closely monitored that even if someone wanted to commit fraud they could not. Now it seems to be as easy as the click of a button to make segregated funds unsegregated. Because there will always be people who will steal if given the chance. Jail time for all the officers whether they knew about it or not would also be a good start to clean things up. Bet that would make internal accountability go way up.

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Watching this kind of made me sick...

see my next post for the link


Having spent a whole day in 2011 talking with many of the leaders of PFGBest (not including Russ Sr., but I did spend time with Russ Jr.), I really hope Russ Sr. was the only one involved.

Otherwise my faith in my fellow man, and my ability to sniff out fraudsters, has just taken a major hit.

Yes, I had an account there. In my mind, I have already written it off.

It does make me wonder if I am in the right business, though. Losing money from bad trading - I can handle. Losing because of crooked brokers - irks me.

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PFGBEST - YouTube

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 binary 
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i am a small time trader. i recently moved funds to pfg.
why are most considering lost money? isn't SPIC going to do anything? then why is it even there?
or isn't PFG not even member of SPIC?
i see this on the member database on SPIC's website

BEST DIRECT SECURITIES LLC
BEST DIRECT SECURITIES LLC ONE PEREGRINE WAY CEDAR FALLS IA 50613




kevinkdog View Post
Watching this kind of made me sick...

see my next post for the link


Having spent a whole day in 2011 talking with many of the leaders of PFGBest (not including Russ Sr., but I did spend time with Russ Jr.), I really hope Russ Sr. was the only one involved.

Otherwise my faith in my fellow man, and my ability to sniff out fraudsters, has just taken a major hit.

Yes, I had an account there. In my mind, I have already written it off.

It does make me wonder if I am in the right business, though. Losing money from bad trading - I can handle. Losing because of crooked brokers - irks me.


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gkopparam View Post
i am a small time trader. i recently moved funds to pfg.
why are most considering lost money? isn't SPIC going to do anything? then why is it even there?
or isn't PFG not even member of SPIC?
i see this on the member database on SPIC's website

BEST DIRECT SECURITIES LLC
BEST DIRECT SECURITIES LLC ONE PEREGRINE WAY CEDAR FALLS IA 50613


Did you have a futures account at PFGBest? SIPC protection does not apply to futures accounts.

Futures accounts are supposed to be customer segregated accounts - meaning your money is accounted for separately than the rest of the business.

The problem with PFGBest is that it looks like they said customer segregated funds were there, when they were not. In other words, people with PFGBest futures accounts are in for an ugly time.


edit: Maybe I am being pessimistic by assuming all my money is gone. But, I just talked with a fellow PFGBest account holder, who is still about 45% of his MFG acct from last October!

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 binary 
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so i am wiped out again last time for trading bad. and this time for choosing bad


kevinkdog View Post
Did you have a futures account at PFGBest? SIPC protection does not apply to futures accounts.

Futures accounts are supposed to be customer segregated accounts - meaning your money is accounted for separately than the rest of the business.

The problem with PFGBest is that it looks like they said customer segregated funds were there, when they were not. In other words, people with PFGBest futures accounts are in for an ugly time.


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so i am wiped out again last time for trading bad. and this time for choosing bad

Hopefully we are not wiped out, but in talking to a Wall Street Journal reporter this evening, I can't say I'm encouraged.

There was supposed to be $200+ million in segregated accts at US Bank. When the NFA checked today, there was only $5 million.

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 madLyfe 
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kevinkdog View Post
Hopefully we are not wiped out, but in talking to a Wall Street Journal reporter this evening, I can't say I'm encouraged.

There was supposed to be $200+ million in segregated accts at US Bank. When the NFA checked today, there was only $5 million.

you think they would be checking before its gone..

dont believe anything you hear and only half of what you see

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 olobay 
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PFGBest missing $220-million in client funds, founder attempts suicide - The Globe and Mail

Some more info.

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madLyfe View Post
you think they would be checking before its gone..

I heard they (the NFA) did check. Apparently, PFG CEO Wasendorf may have forged records.

But even so, I would think an auditor would have checked with the bank holding the funds, not just the brokerage.

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 GridKing 
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PFGBest Liquidating Operations

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 ZENDINA 
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As a former Series 7 broker and Managed Futures broker, I just wanted to confirm what an earlier post said. The SIPC is only for stocks, not for futures. The SIPC has nothing to do with futures at all and does not insure our futures accounts. So, I only keep a minimum in my futures trading account at all times to cover the margins needed, plus some extra cushion, but not too much. Now, if someone has an account trading stocks, that is a different matter. The SIPC does insure it.

After MF Global, the regulators have been talking about setting up some kind of fund like the SIPC for futures, but it has not been done yet. So, that does not help now. I am very sorry for those dealing with this stress.

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 madLyfe 
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ZENDINA View Post
As a former Series 7 broker and Managed Futures broker, I just wanted to confirm what an earlier post said. The SIPC is only for stocks, not for futures. The SIPC has nothing to do with futures at all and does not insure our futures accounts. So, I only keep a minimum in my futures trading account at all times to cover the margins needed, plus some extra cushion, but not too much. Now, if someone has an account trading stocks, that is a different matter. The SIPC does insure it.

After MF Global, the regulators have been talking about setting up some kind of fund like the SIPC for futures, but it has not been done yet. So, that does not help now. I am very sorry for those dealing with this stress.

even though it would give you peace of mind it doesnt really solve the problem..

dont believe anything you hear and only half of what you see

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 ZENDINA 
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Yes, you are very righ Madlyfe, it does not solve the problem at all. Unfortunately with the existing setup of regulations and lack of insurance, all we have is ourselves. There is no fund to protect us so we have to take protective measures for ourselves if we are going to trade futures. We can't rely on what our broker says about their financial stability.

So, I only have the amount of money in my futures account that I can afford to lose without stress because of this.

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 aligator 
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A victim of this whole PFG mess is certainly Woodie's CCI Room, the proud inventor and leaser of Woodie Bars, better known as Median Renko bars. The room was sponsored by PFG and the majority of the members that ever crossed path with Woodie's room had accounts with PFG, including all the cheer leading moderators that praised PFG non-stop. I can only guess that this room was responsible for signing up many hundreds of members with PFG (although maybe for a short time before they blew their accounts).

Will see if the room is attended by members tomorrow. The sad thing is many of the members donated to MAWF, which was a charity of choice for PFG, now I wonder about that too.

Poor guy, how many times can you go broke trading for 37 years and still survive. Got to give it to him.

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 GridKing 
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ZENDINA View Post
As a former Series 7 broker and Managed Futures broker, I just wanted to confirm what an earlier post said. The SIPC is only for stocks, not for futures. The SIPC has nothing to do with futures at all and does not insure our futures accounts. So, I only keep a minimum in my futures trading account at all times to cover the margins needed, plus some extra cushion, but not too much. Now, if someone has an account trading stocks, that is a different matter. The SIPC does insure it.

After MF Global, the regulators have been talking about setting up some kind of fund like the SIPC for futures, but it has not been done yet. So, that does not help now. I am very sorry for those dealing with this stress.

So if you have futures with a broker that goes bust your margin becomes zero?

If you have cash in a futures account that goes bust your cash is not protected?


Why would they allow customers to liquidate positions then? That doesn't make sense...

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 ddnut 
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aligator View Post
A victim of this whole PFG mess is certainly Woodie's CCI Room, the proud inventor and leaser of Woodie Bars, better known as Median Renko bars. The room was sponsored by PFG and the majority of the members that ever crossed path with Woodie's room had accounts with PFG, including all the cheer leading moderators that praised PFG non-stop. I can only guess that this room was responsible for signing up many hundreds of members with PFG.

Will see if the room is attended by members tomorrow. The sad thing is many of the members donated to MAWF, which was a charity of choice for PFG, now I wonder about that too.

Poor guy, how many times can you go broke trading for 37 years and still survive. Got to give it to him.

Indeed, I observed a large number of people in Woodie's CCI Room when I was checking it out a couple of years back. Most of the discussion was on futures so there will be a significant number of people who will be taking a huge financial hit. I met one of the moderators, who also held local meetings to discuss Woodie's method with other individual traders. At the time he had lost his job and had been unable to find another one given this economy. If he got caught by this, he will be in a world of hurt.

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 GridKing 
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That doesn't make sense to me unless the futures contract doesn't exist in the first place, as in they never purchased it.

Like in Madoff's case where everything was completely made up... right? I think the meaning is being misinterpreted but I really have no idea.






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So if you have futures with a broker that goes bust your margin becomes zero?

If you have cash in a futures account that goes bust your cash is not protected?


Why would they allow customers to liquidate positions then? That doesn't make sense...

Maint margin for open positions is not held at the brokerage. If you have open positions, then the money is not in "excess margin". If you close positions, the money is moved back to the FCM. So liquidating positions bring cash back. Initiating positions moves money from excess capital ( which PFG does not have )

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 ddnut 
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GridKing View Post
So if you have futures with a broker that goes bust your margin becomes zero?

If you have cash in a futures account that goes bust your cash is not protected?


Why would they allow customers to liquidate positions then? That doesn't make sense...

My understanding is that you can liquidate any existing positions but cannot open any new positions. Likewise the accounts are frozen until they can be transferred to another broker. Hopefully, the regulators can figure out what happened and who owns what so that people can get access to their money relatively quickly.

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 aligator 
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ddnut View Post
Indeed, I observed a large number of people in Woodie's CCI Room when I was checking it out a couple of years back. Most of the discussion was on futures so there will be a significant number of people who will be taking a huge financial hit. I met one of the moderators, who also held local meetings to discuss Woodie's method with other individual traders. At the time he had lost his job and had been unable to find another one given this economy. If he got caught by this, he will be in a world of hurt.

@ddnut,
I know who you mean, a character from Clint Eastwood Movie, without naming anyone. He actually blown his account trading CCI with no price bars (Who needs those stinking candlesticks?) perhaps more than once. Then he switched to a PFG Forex pool account. I assume that one was also blown in a pool of money auto trading WCCI (what a joke!). Woodie refused to talk about that Forex thing.

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 GridKing 
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Well, if they go bust and you have an open position, you still have a position right? or only maybe

and if this happens would you be better off not selling and wait until your position is in place in the new brokerage?

Or because the now defunct brokerage no longer has what they put up for the contract something different happens , I don't really know how they look at these things ?

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 kevinkdog   is a Vendor
 
 
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My understanding is that you can liquidate any existing positions but cannot open any new positions. Likewise the accounts are frozen until they can be transferred to another broker. Hopefully, the regulators can figure out what happened and who owns what so that people can get access to their money relatively quickly.

This broker transferwould be ideal, and is historically what happened during previous failures. I had an acct at Lind Waldock/Refco when they imploded, and my cash and positions were transferred very seamlessly to MFG.

The problem in this case is that they can't transfer cust seg acct money, since it looks like the money is not even there!

I'm leaving my positions open for now. Not sure if that is the right decision...

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  #73 (permalink)
 Big Mike 
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kevinkdog View Post
I had an acct at Lind Waldock/Refco when they imploded, and my cash and positions were transferred very seamlessly to MFG.

No offense, but let me know which broker you decide to go with next, so I can make sure and not have an account there You've had bad luck!

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 kevinkdog   is a Vendor
 
 
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Big Mike View Post
No offense, but let me know which broker you decide to go with next, so I can make sure and not have an account there You've had bad luck!

Mike


You are right, Mike!

Luckily, until today, I had escaped with 100% of my money (I closed MFG acct after the Refco debacle).

After that I decided to have multiple accounts and multiple clearing firms. It ties up more margin, but it is a bit safer.

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 aligator 
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Big Mike View Post
No offense, but let me know which broker you decide to go with next, so I can make sure and not have an account there You've had bad luck!

Mike

@Big Mike,

There is no escape, you are going to get it if you hang in long enough with the same broker (yes, they do have a shelf life). We should have read the tea leaf when we got an unsolicited e-mail, letter from PFG in November 2011 claiming no relations to the MFG scandal at that time.

My strategy after Option America in 80's and Lind-Waldock and Refco (three-times victim now) has been to only day trade in two separate accounts with minimum over-margin funds and change one broker every six months, yes it is a pain but you will not become complacent.

Between three busted brokerage accounts and several blown accounts I could have had a couple or more of 7-11s and gas stations by now.

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  #76 (permalink)
 redratsal 
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It will not save you from a PFGBest case but you might want to check what your broker declares to CFTC and make a comparison.

Financial Data for FCMs - CFTC

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tspencer
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I was literally 2 hours away from funding my account with them this morning before i got an email from Erich, what a blessing in disguise it was that my bank required a letter to raise the telegraphic transfer limit on my account

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 AuburnTrader 
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I was looking at them as well for a forex account two days ago.....I'm only keeping just enough to trade with any broker. Very sad.

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 TrendTraderBH 
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Never had an account with PFG (had one with Lind Waldock in the 90s) but kept in touch with Paul Kavanaugh who works for them (for now) and is a real good guy. Hope he makes it through ok.

Looks like the regulators could use a regulator to keep track of their less than stellar work....they are asleep at the wheel big time (especially after the MF Global).....if nothing changes....nothing changes.....<sigh>

Let's all make a side-bet of how many emails we get from our current brokerages explaining how strong they are and how protected we are and how it would never happen to us.....<sigh again>

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  #80 (permalink)
 ThatManFromTexas 
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redratsal View Post
It will not save you from a PFGBest case but you might want to check what your broker declares to CFTC and make a comparison.

Financial Data for FCMs - CFTC

If PFG had what they declared ... there would be no problem...

I'm just a simple man trading a simple plan.

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  #81 (permalink)
 redratsal 
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If PFG had what they declared ... there would be no problem...

Absolutely agree but IB's 1,334,246,380 extra net capital is different than PFG 9,533,749, at least curiosity can be satisfied

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  #83 (permalink)
 ThatManFromTexas 
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redratsal View Post
Absolutely agree but IB's 1,334,246,380 extra net capital is different than PFG 9,533,749, at least curiosity can be satisfied

I understand your point ....but I'm not sure what criteria to use to determine which firm to have an account with...

VELOCITY FUTURES ....................... 678,123

AMP GLOBAL CLEARING ................. 824,952

DORMAN TRADING ..................... 1,854,524

MB TRADING FUTURES ................ 2,563,666

ROSENTHAL COLLINS GROUP ... 18,649,806


Anyone want to chime in on this one ... or should that be in a separate thread ?

I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
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  #84 (permalink)
 redratsal 
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ThatManFromTexas View Post
I understand your point ....but I'm not sure what criteria to use to determine which firm to have an account with...

VELOCITY FUTURES ....................... 678,123

AMP GLOBAL CLEARING ................. 824,952

DORMAN TRADING ..................... 1,854,524

MB TRADING FUTURES ................ 2,563,666

ROSENTHAL COLLINS GROUP ... 18,649,806


Anyone want to chime in on this one ... or should that be in a separate thread ?

Assuming what we read is correct, you can also look at historical data and compare the trends, besides FA I think there is no choice but keep your account as little as possible, like withdrawing all the excesses or refunding on a monthly basis. At the time beeing there are no guarantees on brokerage once again it is our job to reduce risk and be prepared. I feel sorry and inappropriate with all the traders that currently are facing this problem nobody is immune to this issue and we are all learning a big lesson.

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 Cloudy 
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tspencer View Post
I was literally 2 hours away from funding my account with them this morning before i got an email from Erich, what a blessing in disguise it was that my bank required a letter to raise the telegraphic transfer limit on my account

A year and a half ago I was this close to starting an account with PFG. A trading instructor of a site had recommended them. I tried a trial with TradeNavigator. Saw a nice ad with Wasendorf. checked out their new building complex satellite pictures in google maps. Then, thankfully I found futures.io (formerly BMT) and Ninjatrader. I tried Ninjatrader and felt that TradeNavigator had a UI look and feel that seemed 10 years out of date. (made for windows 9x feel). And PGBestDirect's new platform seemed incomplete. Then I went with Mirus and RCG. I also thought how come PFG didn't offer Ninjatrader. I also saw Woodies CCI club had PFG ads on their site. I once visited the Global Futures office in Encino, CA. That place was a crowded mess, just enough room to walk between. Desks crammed together. Most of the staff were young college or teen age. Many were just watching their monitors catching me watching uneasily(better not be causing forex slippage!), while a broker guy was walking around yapping out loud on the phone. But who knows, maybe leaner is better for the customer..

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  #86 (permalink)
 Cloudy 
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TMFT,

Futures (and forex) trading also available through TDAmeritrade and ThinkOrSwim.

http://www.tdameritrade.com/home.html

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  #87 (permalink)
 wldman 
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how to really insulate yourself from this. In the FINRA report posted by Mike I see that Jr. is registered at a firm where I was also registered for a short time. Small world I guess.

Guys please realize that monthly FOCUS reports in this industry are NOT audited. A firm can report/claim basically anything they want. So, even a firm with a bazillion in excess net capital COULD be just as vulnerable. This is a real concern for me as I have a bunch of money waiting to go out to broker. I will strongly reconsider that now and probably review changing brokers twice a year.

Certainly, although it is a pain in the ass I think a strategy that leaves just enough on balance to cover typical trading margin req is probably a good plan. My current broker will let me transfer pretty freely so I think I'll sweep weekly back to the bank.

While I have blown up an account twice in 20 years, I have never had the money stolen from me. When you are complicit and lose you came to play the game and that is a great deal different than being a victim. I'm sorry for the guys especially among this community that have been and will be hurt by this....anothe symptom of what is wrong in the world, imo.

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  #88 (permalink)
 ThatManFromTexas 
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Cloudy View Post
TMFT,

Futures (and forex) trading also available through TDAmeritrade and ThinkOrSwim.

http://www.tdameritrade.com/home.html

@Cloudy

I know... but I was looking at commonly mentioned firms on futures.io (formerly BMT) that included Ninja Trader or Sierra Charts in their platforms... since a large number of futures.io (formerly BMT) members use those platforms...

I'm just a simple man trading a simple plan.

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  #89 (permalink)
 wldman 
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web page has a list to include all brokers with whom they can integrate. Anyone can lie on a focus report. Keep that in mind that size or excess net capital does not provide insurance against fraud.

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 itrade2win 
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wldman View Post
how to really insulate yourself from this. In the FINRA report posted by Mike I see that Jr. is registered at a firm where I was also registered for a short time. Small world I guess.

Guys please realize that monthly FOCUS reports in this industry are NOT audited. A firm can report/claim basically anything they want. So, even a firm with a bazillion in excess net capital COULD be just as vulnerable. This is a real concern for me as I have a bunch of money waiting to go out to broker. I will strongly reconsider that now and probably review changing brokers twice a year.

Certainly, although it is a pain in the ass I think a strategy that leaves just enough on balance to cover typical trading margin req is probably a good plan. My current broker will let me transfer pretty freely so I think I'll sweep weekly back to the bank.

While I have blown up an account twice in 20 years, I have never had the money stolen from me. When you are complicit and lose you came to play the game and that is a great deal different than being a victim. I'm sorry for the guys especially among this community that have been and will be hurt by this....anothe symptom of what is wrong in the world, imo.


How would changing brokers twice a year decrease the chances of not moving to a broker that may happen as PFG and MFG? Please clarify for me.

Thanks

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  #91 (permalink)
 ThatManFromTexas 
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wldman View Post
Guys please realize that monthly FOCUS reports in this industry are NOT audited. A firm can report/claim basically anything they want. So, even a firm with a bazillion in excess net capital COULD be just as vulnerable.

@wldman

You are correct. If you can get a copy of an audited financial statement that might be more useful, assuming it wasn't falsified. RCG post's a document they say is their audited financial statement on their website.

This footnote is on the bottom of the page on their audited financials.


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  #92 (permalink)
 Big Mike 
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But as we learned here, it is easy to fool the NFA. Photoshop maybe...

But once they actually called US Bank, they found out that the balance was just $5M instead of $220M or whatever. I guess they hadn't thought to call the bank before to check the balance.

And what about US Bank? Are you telling me no one over there had any knowledge that this was the PFG Seg account, and that perhaps it should not have been dwindled down to $5M without raising suspicion?

Mike

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  #93 (permalink)
 ThatManFromTexas 
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Big Mike View Post
But as we learned here, it is easy to fool the NFA. Photoshop maybe...

But once they actually called US Bank, they found out that the balance was just $5M instead of $220M or whatever. I guess they hadn't thought to call the bank before to check the balance.

And what about US Bank? Are you telling me no one over there had any knowledge that this was the PFG Seg account, and that perhaps it should not have been dwindled down to $5M without raising suspicion?

Mike

@Big Mike

The bank is only responsible to limit access to an account to those named on the account .

I'm just a simple man trading a simple plan.

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  #94 (permalink)
 Big Mike 
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ThatManFromTexas View Post
@Big Mike

The bank is only responsible to limit access to an account to those named on the account .

I am not sure if that is true when it comes to this situation. If the bank had knowledge that improper actions were taking place with segregated funds....

But that wasn't my point, I was more upset about reading how NFA placed a phone call to the bank to learn the true account balance, apparently they had forgot that step before when verifying the balances. If they have the purview to get the bank balance today, why did they not have it yesterday?

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  #95 (permalink)
 Big Mike 
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Interesting, I thought the segregated account was at US Bank, but this email suggests otherwise unless it changed in the last six months.

Source: Where The "Segregated" PFG Money Is | ZeroHedge


Quoting 

From: "Herb Kral" <xxxx@pfgbest.com>
To:
Date: Tue, 22 Nov 2011 10:07:55 -0600
Subject: RE: Follow up

Dear [XXX]

All of our client funds are held at JP Morgan Chase in a segregated account. Jeffries does hold our margin money for positions.

Thanks,

Herb Kral, Director of Automated Trading
311 W. Monroe, Suite 1300
Chicago, IL 60606
312-775-3581 | 312-775-3095 fax

Mike

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  #96 (permalink)
 Big Mike 
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Guess I was wrong about US Bank.

Source: PFG Is Now MFG(lobal) Part 2 As $220 Million In Segregated Client Money Has Just Vaporized | ZeroHedge


Quoting 
UPDATE 2: Have no fear though since as recently as January 2012, the CFTC did not find any "material breaches of customer funds protection requirements" at FCMs (firms like PFGBest)

UPDATE 1: Account-holders may not be so surprised to find who is the custodian for the PFGBest FX accounts: none other than huge MFGlobal fans, JPMorgan!



Remember when the entire segregated account fiasco was supposedly fixed in the aftermath of the November 2011 MF Global bankruptcy, and where regulators: the CFTC, the SEC, the CME, and anyone you asked, swore up and down this would never happen again? Turns out that 7 months later, the spirit of MFG has struck again, only this time with one letter switched: it is now known as PFG, as we suggested first 3 hours ago when we broke the story. From the just filed affidavit by Lauren Brinati who is working with the National Futures Association, which in turn has just filed notice prohibiting PFGBest from operating further, and freezing all of its accounts:

On or about June 29, 2012 PFG reported to NFA that it had approximately $400 million in segregated funds, of which more than $225 million were purportedly on deposit at U.S. Bank

On or about July 9, 2012, NFA received information indicating that PFG's Chairman may have falsified bank records
On July 9, 2012, NFA made inquiry with US Bank and learned that rather than the $225 million that PFG had reported as being on deposit at US Bank just days earlier, PFG had only approximately $5 million on deposit at U.S. Bank.

Translation: another $220 million segregated account pillage has just taken place, in the vein of none other than Jon Corzine and MF Global.

The money has now officially vaporized.

It is truly wonderful of the NFA to finally get involved, after PFG's clients have lost about 98% of their cash held with the firm.

In other potential news, a rather prominent New York bank, recently closely associated with marine wildlife, may have just cut its Q2 losses by up to $220 million.

Mike

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  #97 (permalink)
 Big Mike 
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Interesting story about account movement post-MFG:

Source: Insight: Two firms flourish in frenzied MF Global aftermath | Reuters


Quoting 
(Reuters) - The mad rush to move client money out of MF Global Inc. after its collapse left two firms with the bulk of customer accounts, while other brokerages emerged with only minor gains from the chaos of carving up a multibillion-dollar business.

The process, according to interviews with more than half a dozen industry executives, was a scramble: a patchwork of urgent phone calls, emails, "handshakes" and news gleaned from press reports read by executives who were asking - and being asked - to take on MF Global customers during a month-long effort to transfer more than 25,000 accounts and some $2 billion in collateral.

MF Global's fall presented a rare opportunity for any one of a dozen independent Futures Commission Merchants (FCM) to quickly gain valuable new customers from one of the world's most active commodity houses - a welcome boost for mid-tier firms who are fighting to survive in an industry beset by ultra-low interest rates and the advent of electronic trading.

The result: Two of Chicago's oldest, most venerable independent brokers saw a combined $1.2 billion increase in segregated customer funds in November, their biggest one-month increase in more than three years, according to a Reuters analysis of Commodity Futures Trading Commission (CFTC) data.

R.J. O'Brien Associates, a founding member of the Chicago Mercantile Exchange that started trading in 1914 as a cash butter and egg specialist, saw a November inflow of customer accounts of almost $800 million, an increase of 31 percent. The gain was nearly five times its monthly average increase of $175 million over the past three years, the analysis found.

Rosenthal Collins Group, founded in 1923 as a grain broker, saw an increase of $362 million or 26 percent, nearly five times its three-year monthly average increase of $75 million.


One other - ADM Investor Services, the broker subsidiary of agribusiness firm Archer Daniels Midland Company - saw a $315 million rise, a more modest 13 percent gain in its funds.

But none of the other FCMs that agreed to take on MF Global accounts saw as large an increase in customer funds as RJO and Rosenthal, Reuters found, and some actually saw declines.

The task of divvying up the accounts fell to the CME Group, the world's biggest futures bourse and MF Global's first-level regulator. Few dispute the Herculean task it undertook to unfreeze trading accounts within a week, but questions over the handling of the process linger.

"I think the entire process should be transparent," said Mark Melin, a Chicago-based futures markets author and investor. "The expectation should be, 'Are they doing honest bidding and are they open to being transparent about how things were handled?'"

While the CME has been blasted over the past three months for its failure to act more quickly to protect customers amid the collapse of one of its most active brokers, its role in doling out customer accounts has been largely unexamined.

CME'S SOS

When MF Global declared bankruptcy on October 31 and reports surfaced that it had "lost" hundreds of millions of dollars of client funds, tens of thousands of traders' accounts and about $6 billion of customer funds were thrust into limbo.

The CME and the court-appointed bankruptcy trustee were put in the awkward position of having to arrange for the transfers of customer accounts - en masse - among competing merchants.

The fact that MF Global's client base was vast, diverse but typically quite small - from retail speculators to professional energy traders to agriculture hedgers and "introducing brokers" - meant that no single broker could or would take on all those accounts. Allowing individual customers to choose their new broker would complicate and delay the process.

So the exchange reached out to a number of different brokers over a period of days, effectively soliciting volunteers to take on the financial and administrative task of absorbing thousands of individual accounts, many of them underfunded - only two-thirds of the requisite margin was transferred with accounts.

The top 10 Wall Street broker-dealers, which control some 90 percent of all segregated funds catering to large-scale clients like hedge funds, corporations and merchant traders, showed little interest in dealing with the hassle of tiny accounts.

"We reached out to a broad range of firms and worked with those firms that most quickly confirmed they were willing and able to take significant customer accounts in bulk," CME said in a written statement to Reuters. "Not all firms were able to take on this significant obligation, but we worked closely to make the process as smooth as possible for clients and those that served as receiving firms."

In many respects R.J. O'Brien and Rosenthal were obvious candidates: behind MF Global, they were the two largest fully independent FCMs measured by segregated funds. Their client bases were similar.

But even so, the customer funds they received in November dwarfed most of the other brokers who were selected by the CME Group, including bigger and better-known global names like French-owned Newedge and Australian bank Macquarie.

EARLY IN THE QUEUE

While the futures industry has coped with the collapse of brokers before, the apparent loss of customer funds made MF Global's demise unprecedented. The broker was forced to shut down, leaving customers frozen out of their accounts, and forcing the CME and the bankruptcy trustee to step in quickly.

Many traders recalled the difference with Refco, a major FCM that had over $4 billion in segregated funds before it collapsed in 2005. Its brokerage arm had been able to continue functioning, and was ultimately auctioned off to Man Financial, as MF Global was then known, for $323 million.

"With MF Global, no one knew what was going on. No one knew where the accounts were going. We were relying on the courts for information. The whole situation was incredibly disorganized," says Philip Silverman, who manages $21 million in client funds at New York-based fund Kingsview Capital LLC.

As early as Friday, October 28, after MF Global's shares had tumbled by as much as 66 percent but three days before it filed for bankruptcy, the CME was preparing for a worst-case scenario, reaching out to leading brokers including R.J. O'Brien about the possibility of taking over some accounts

"They were just testing the waters. They were taking precautionary steps," said R.J. O'Brien president Gerald Corcoran.

His firm was a natural fit for much of MF Global's business, and was particularly eager to take on the Lind-Waldock retail arm, which had been part of Refco and was seen as a prize asset.

RJO ultimately got 20,000 accounts in November, including Lind-Waldock, and has retained the majority of them, accelerating its business plan by "a year or two", Corcoran said.

But it wasn't without risk. The O'Brien family - which had bought the family firm back from two private equity investors in late 2010 - injected $50 million to bolster its capital.

"We took on operational risk and we took on credit risk. We had no transparency into the credit capability of these customers," Corcoran said. "There was absolutely no cherry picking."

The CME Group declined to comment on detailed questions related to the process and timeline of transferring accounts.

WIDENING CALL

By Sunday, Oct 30, the CME was widening the call. As MF Global prepared to file for bankruptcy protection the next day, the exchange was distributing a list of customers and account numbers, one person involved in the process told Reuters.

Brokers were required to take all the individual customers that fell under the first 3-digit prefix of the 10-digit account numbers, which grouped similar accounts.

"We got the list on a Sunday night and distributed it to our management. Monday morning we came in to start going through the process and by 2 o'clock it was done," said the person.

The process was highly competitive. Initially, the merchants didn't know who else was looking at the list of MF Global customers. But the exchange eventually let them know that many of their competitors were looking at the same clients.

"This was a list that was diminishing by the hour," said the merchant. Eventually, his firm ended up with about 20 percent of the MF Global accounts it asked for.

Even then surprises arose: Some accounts contained trading positions on the Intercontinental Exchange, a CME rival, even though there had been no communication from the ICE.

MF Global brokers had been allowed to continue executing some orders on Monday and part of Tuesday, but the volume of redemptions quickly overwhelmed the depleted staff, many of whom had been barred access to trading floors. It was soon clear that customer accounts would be moved, in bulk, to new brokers.

By Tuesday afternoon, a shortlist of four such firms initially circulated among traders. The next day, the CFTC announced that the CME had found six firms to take on the accounts; by Thursday that list had grown to ten. Eleven firms ultimately participated in the bulk transfers.

"We ended up taking clients on that fit the profile of our firm," said John Streich, chief executive of Penson Futures, a Chicago-based FCM. "It was fast. Everything was really done on a handshake."

PYRRHIC VICTORY

Executives contacted by Reuters said ending up with some additional clients from MF Global's demise was bittersweet.

Iowa-based futures brokerage PFGBEST, a smaller independent broker about one-quarter the size of RJO, had issued a press release shortly before the first transfer arguing against "allowing regulators and exchanges to force to any particular futures commission merchant."

PFGBEST was ultimately given some accounts in a second transfer. But of the 700 accounts with some $200 million in cash that it received, less than 40 percent have remained with the broker, said Russell Wasendorf, chief operating officer.

"I think some firms were trying to look at it as a land grab," he said. "Our major concern was to give customers their money." And if the customers realized during the process that his firm provided them good service, "that was the only real benefit that we saw out of this."

INTL FCStone, another broker that has grown aggressively through a series of acquisitions over the past few years and nearly matched Rosenthal in client funds, was content with the outcome, chief executive Sean O'Connor told Reuters. They bought MF Global's London Metal Exchange operations.

"We may not have ended up with more customers, but we ended up with a business," O'Connor said.

Ultimately, for most brokers, any concerns over the scramble for market share have been dwarfed by fears that MF Global's apparent misappropriation of up to $1.2 billion in client funds - an unprecedented violation of the industry's most sacrosanct rule - may cast a lasting pall across the entire industry.

"On the one hand it's given us a leg up on customer funds," says Leslie Rosenthal, partner with Rosenthal Collins. "On the other hand it's dampened volumes and commissions."

(Additional reporting by Tom Polansek and Ann Saphir in Chicago and Marcy Nicholson in New York; Editing by Alden Bentley and Ed Tobin)

Mike

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The following 2 users say Thank You to Big Mike for this post:
 
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  #98 (permalink)
 ThatManFromTexas 
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Early warning signs....

One former employee of the firm said he had grown concerned that Wasendorf didn't do more to distance the company from a massive $194 million forex-trading Ponzi scheme run by Trevor Cook in Minnesota, who admitted defrauding more than 700 investors. Cook is serving 25 years in prison.

In February PFGBest, which had acted as Cook's broker, was fined $700,000 by the NFA for failing to notice the scheme. The company was subsequently sued for $48 million by the receiver rounding up the assets from Cook's scheme.

I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
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  #99 (permalink)
 furytrader 
Chicago, IL USA
 
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If you look at the NFA's statement on PFG, it specifically states that the money is missing at US Bank, not JPM:

https://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=3356

It's on a page towards the end of the document.

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 Skidboot 
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Moved my account 3 months ago to Mirus/Dorman after futures.io (formerly BMT) best of trading 2012 results. Phew! dodged a bullet there!

Thank you Big Mike!!

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