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PFGBest Accounts Frozen (PFG scandal big thread)
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PFGBest Accounts Frozen (PFG scandal big thread)

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


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

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



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

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

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  #402 (permalink)
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karoshiman View Post
I agree, in that case this option is not attractive.

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

...


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

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

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

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

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  #404 (permalink)
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Serninja View Post
I just thought about the NFA Assessment Fees and charges and ordered fines they receive.

The NFA assessment fee, payable by FCMs with respect to futures contracts, is $.02 per side, invoiced to customers.

After taking a short look at the publications of the CME regarding just of their futures volume, these numbers made me really dizzy.

With due regards to these huge sums, shouldn't be indicated that "someone" audit the NFA too; simply put are they have been audited? Then also, do they release figures or balance sheets to the public? What happens with all the monies?

I then took a look at the current Opportunities for carreers at NFA. Either they just started now to raise the requirements for positions or they maybe aren't able to hire the right people. A Bachelor's degree in Accounting requires also the ability to anticipate and respond to suspicious practices and analytical and communication skills. At least the latter requirements weren't available at that time. Nobody was able to "anticipate" that this theoretically could be possible and no one also had the "communication skills" to pick up the phone to verify the statements. Seemingly it doesn't matter if it's a top-tier company with triple digit millions of customer assest or a little rat-shop-broker in a one-horse town.

I mean this task could have done the customer himself. Just asking the broker to provide a statement of the bank who helds the segregated accounts, that there is everything in line. Would have this made the customer feeling more reassured? No one pays the customer for that, why would he pay some one else for the same? Only if one can go beyond that, right?

In relation to that, insurance companies send investigators across the states for claims that are one-thenth of a percent and a lot of them have by far less revenues then the NFA.

I think insurance could help, because it's in the interest of the insurance company to prevent the insurance case. Let them do the job when it comes to risk analysis. Therefore they would do very much more, for less premium to audit the way it has to be done. Just one condition of insurance: "If the customer can't withdraw his money due to regulatory actions, this case is coverd by the insurance." Plain and simple.

I've read that it could be more complicated than MF Global because it appears there is fraud involved, based on the CFTC complaint. But this frees the regulators only, if they did everything, I mean at least everything one avarage simple-minded person would do in a regulatory position. If not, there could be possibly someone else to sue with at least sufficient estate to fully satisfy claims...

There have to be made deeply changes in the system, now an immediately. But foremost, the customers have to be compensated to restore the trust!

Just my opinion...

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

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

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

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

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

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

@brevco

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

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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  #406 (permalink)
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If this is true, this is unacceptable.

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

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  #407 (permalink)
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At Peregrine Financial, Signs of Trouble Seemingly Missed for Years - NYTimes.com

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  #408 (permalink)
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Here's the document that fooled the NFA.

Attached Thumbnails
PFGBest Accounts Frozen (PFG scandal big thread)-us_bank_statement.pdf  
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  #409 (permalink)
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Just my speculation after this new video. Sr. , family, and the board of execs including the CFO and that "homemade" personal auditor all knew about it. Rumors were going around. The emails to all the employees during the last week was to help ally fears and to keep customers from leaving until the exposure..

 
 
 
 


Last edited by Cloudy; July 13th, 2012 at 02:14 PM.
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  #410 (permalink)
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Cloudy View Post
Just my speculation after this new video. Sr. , family, and the board of execs including the CFO and that "homemade" personal auditor all knew about it. Rumors were going around. The emails to all the employees during the last week was to help ally fears and to keep customers from leaving until the exposure..


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

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


Last edited by karoshiman; July 13th, 2012 at 02:25 PM. Reason: Last sentence added.
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