"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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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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"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
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"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
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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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"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
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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?
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.
"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
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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.
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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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 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."
"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
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...
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?
"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
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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.
Hi heywally, you can never be "too paranoid". My understanding with IB is if you elected to sweep excess funds into the IB securities account as opposed to the commodities account you had SIPC insurance up to $900k (See below) with SIPC which …
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...
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 ...
"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
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.
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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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....
"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
"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
Math. A gateway drug to reality.
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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.
"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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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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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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"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
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.
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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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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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...
"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
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.
"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
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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 )
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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@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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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 ?
"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
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...
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.
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
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>
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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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..
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.
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.
My daddy always said, "Every day above ground is a good day!"
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.
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.
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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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?
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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?
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!"
dont believe anything you hear and only half of what you see 
last time for trading bad. and this time for choosing bad 
You've had bad luck!
