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US broker PFGBest freezes funds after founder's suicide attempt

  • #201
  • Aug 6, 2012 10:57am Aug 6, 2012 10:57am
Quoting pip_seeker
Client funds need to be insured, these funds sit in the brokers bank account so make the bank insure these funds and segregate them with a certain guarantee of funds to trade with for the trader.

Make the brokers comply electronically where the regulators get notices if bank balances fall below certain thresholds within any one 24hr period.

This is 2012, we have apps on cell phones that we can track balances from our own checking / savings accounts so there is no excuse good enough for the level of stupidity these "out to lunch" regulators have shown over the past several years.

The audits should be done electronically, with no ability of anyone person or group of persons to distort reality or cook the books to make you think the firm is illusionary sound when it's not.

Remove Brokerage heads from NFA / CFTC positions of power. This is certainly a conflict of interest and should not be allowed. No any one brokerage head should sit on any advisory board for NFA / CFTC.
Would be a nice start...
Fuck Forex Factory.Wake up people.
  • #202
  • Aug 6, 2012 10:59am Aug 6, 2012 10:59am
In addition to what I said above we already had this so called "round tree discussion" way back when CFTC had open comments on leverage reduction to 50:1, FIFO, No hedging etc.

In fact we discussed it SO FREAKIN MUCH they received more comments for this issue than they ever have before... so much to the point the CFTC couldn't even handle the work load.

What good did that discussion do? On top of that all those discussions were prior to MF Global and PFG Best.

So sorry the freakin discussions are over with... take some of your illicitly gained funds and buy a clue.


  • #203
  • Aug 6, 2012 7:06pm Aug 6, 2012 7:06pm
Quote
This week the CFTC will be holding a public roundtable to address the concerns of traders in response to the bankruptcies of PFG and MF Global. FXCM would like to announce its own proposals to help restore confidence for futures and forex traders in the United States....

Doesn't this only help your firm? What's the point publishing financial statements while client's fund are deposited in your firm's account? Didn't Enron, Lehman Brothers, all the busted public companies showed their financial figures every quarter?

The simple way to restore clients' confidence is set up real segregated accounts , monitered by regulator. As pip_seeker said, how hard this could be. Only those wish to control clients' fund don't want to implement this policy.
  • #204
  • Aug 6, 2012 7:14pm Aug 6, 2012 7:14pm
I dont want regulators to restore my confidence i want them to come up with concrete rules to protect my money, simple as that. fuck confidence show me action
  • #205
  • Aug 6, 2012 7:44pm Aug 6, 2012 7:44pm
The Peregrine Fraud Case Is Worse Than You Thought
By Matthew Philips on August 01, 2012



Just when you figured the details of the Peregrine fraud case couldn’t get any worse, evidence is emerging that not only paints regulators as even more inept than first suspected, but also indicates that officers at the Iowa-based futures brokerage had reason to believe their boss was stealing customer money.

For those who haven’t been following the case, here’s a primer: Peregrine Financial Group’s chief executive, Russell Wasendorf, allegedly duped regulators for 20 years through an elaborate scheme in which he forged bank documents, faked e-mails, and set up a bogus bank address at a post office box. This allowed him allegedly to steal hundreds of millions of dollars of his customers’ money, some of which he spent on a state-of-the art, $18 million headquarters built in 2009.

Last week, Senator Tom Harkin (D-Iowa) wrote to Dan Roth, CEO of the National Futures Association, the private trade group charged with monitoring futures brokerages such as Peregrine, essentially asking how in the world the NFA missed Wasendorf’s 20-year fraud, given the five times Peregrine was cited for disciplinary and enforcement actions dating back to 1996.

In his response to Harkin, Roth admitted that in May 2011, NFA auditors appeared to be informed of a $211 million shortfall in Peregrine’s customer accounts by an employee of the U.S. Bank (USB) branch in Cedar Falls, Iowa, where Wasendorf kept Peregrine’s accounts. According to Roth’s response, on May 13, 2011, a Friday, an NFA auditor was copied on an e-mail that a U.S. Bank employee, assistant relationship manager Hope Timmerman, sent to Peregrine’s chief compliance officer, Susan O’Meara. The e-mail included an attached pdf document from U.S. Bank showing that Peregrine’s customer account contained just $7.18 million, well short of what it should have had.

Three days later, on a Monday, the NFA received a two-page fax over e-mail with a cover page that read: “Re: Corrected Bank Balance Confirmation,” Roth wrote. The cover page appeared to be printed on U.S. Bank letterhead and included Hope Timmerman’s name at the bottom. The second page of the fax included a hand-written account balance that now read $218.6 million. The NFA auditors apparently took that as a legitimate correction and never followed up on how U.S. Bank made such an egregious error. On top of that, the incident happened just as the NFA “was in the middle of conducting on-site audit fieldwork of PFG,” Roth wrote to Harkin.

Wasendorf, 64, has been charged with lying to regulators and is being held in U.S. custody pending a bail hearing this month. He has been sued by several customers for allegedly stealing more than $200 million in client money. On July 9 he tried to asphyxiate himself by parking his Chevrolet Cavalier behind his office in Cedar Falls and running a hose from the tailpipe into the car. He survived after a passerby discovered him and called 911.

On Wednesday, the Senate Agriculture Committee held its latest hearing on the Peregrine and MF Global cases that have shaken confidence in the futures market. Harkin asked CFTC Chairman Gary Gensler if his agency, which is charged with overseeing the NFA, was aware of the 2011 incident which Roth laid out in his letter. Gensler indicated that to his knowledge, it was not, replying that “We don’t review NFA audits.”

“There should’ve been some questions asked at the very least,” Harkin said in a phone interview afterward. He also raised concerns about whether the two e-mails sent to the NFA actually came from the same e-mail address. According to accounting fraud experts, it’s certainly possible that Wasendorf spent that weekend in May 2011 figuring out how to send e-mails from a fake e-mail address.

“It’s a very simple thing to do,” says Brian Fox, founder and chief marketing officer of Confirmation.com, a Nashville company that provides auditors and accounting firms the means to confirm bank account balances electronically. The NFA began using Confirmation.com in the wake of the 2011 MF Global scandal and was demanding that futures brokerages submit to its e-confirmation services by this summer. The day before he attempted to kill himself, Wasendorf relented and authorized the NFA to confirm electronically Peregrine’s customer bank accounts, which ended up being short more than $200 million.

Fox teaches classes through the American Institute of CPAs in which he lays out step by step how fraudsters like Wasendorf are able to set up fake e-mail addresses. (See video here). “You can do it in 10 minutes,” says Fox. “It’s not like you have to be able to read a lot of computer code.” Fox is somewhat sympathetic to the plight of the NFA auditors who didn’t follow up on the 2011 incident. He says that “43 percent of the time, account confirmations like this are wrong, so auditors get used to getting corrected statements.”

What is less forgivable, says Fox, is that after receiving the e-mail from U.S. Bank showing that the customer account contained only $7.18 million, Peregrine’s chief compliance officer, Susan O’Meara, didn’t sniff out the fraud herself. Wasendorf maintains that he was the only one privy to what he was doing. “That means there are only two conclusions to draw there: She was either complicit or incompetent,” says Fox.

You wouldn’t want to invest with a firm that is either.

Philips is an associate editor for Bloomberg Businessweek.
  • #206
  • Edited 5:26am Aug 7, 2012 5:16am | Edited 5:26am
Quoting pip_seeker
yeah sure have a round tree discussion with the wolves who guard the hen house and the herd grazing in the distant valley.

If CFTC, NFA et all want to bring confidence back heads need to roll at these inept excuses for regulation.

Client funds need to be insured, these funds sit in the brokers bank account so make the bank insure these funds and segregate them with a certain guarantee of funds to trade with for the trader.

[size=3]Make the brokers...
good starting list. I am particularly interested in the insurances of client funds. That seems to be something that the NFA/CFTC is intentionally avoiding. Fraud or no fraud, can the client funds be rapidly recovered? It would have been just one article that is long in the past.

I'm not so keen on layering on a bunch of ridiculous regulation that doesn't add any real protection for the trader. The ability to recover client funds regardless of the reason for sudden disappearance is what I consider a real protection. The other stuff is more auxiliary....support for the ability to recover client funds.

Like it appears Canadian PFG clients, only a single article that was promising. The protection needs to extend to futures and forex.

Quoting pip_seeker
In addition to what I said above we already had this so called "round tree discussion" way back when CFTC had open comments on leverage reduction to 50:1, FIFO, No hedging etc.

In fact we discussed it SO FREAKIN MUCH they received more comments for this issue than they ever have before... so much to the point the CFTC couldn't even handle the work load.

What good did that discussion do? On top of that all those discussions were prior to MF Global and PFG Best.
...
I think this is what has pissed a lot of traders off and make them think 'what difference does my comments make?' On that series of comments, it seems like they just took the comments and threw them in the trash. The comments do make a difference; even if it is a small battle.
Measure trends automatically with zero lag
  • #207
  • Aug 7, 2012 9:32am Aug 7, 2012 9:32am
Quoting Zkf
Doesn't this only help your firm? What's the point publishing financial statements while client's fund are deposited in your firm's account? Didn't Enron, Lehman Brothers, all the busted public companies showed their financial figures every quarter?
You are correct in stating that pulicly disclosing financials is not a panacea. However, in the futures industry it is becoming more important than ever due to the slipping profit margins of so many FCM's. A public disclosing requirement combined with higher accounting standards would have caught PFG since the CEO of the firm would not have been able to shield the firm's finances from so many people. In short, the more people that have to sign off on a firm's financial statements the less likely there is a chance for fraud.
  • #208
  • Aug 7, 2012 9:36am Aug 7, 2012 9:36am
Quoting pip_seeker
In addition to what I said above we already had this so called "round tree discussion" way back when CFTC had open comments on leverage reduction to 50:1, FIFO, No hedging etc.

In fact we discussed it SO FREAKIN MUCH they received more comments for this issue than they ever have before... so much to the point the CFTC couldn't even handle the work load.

They did indeed receive more comments on the leverage issue than ever before. And because of those comments the CFTC did not implement 10:1 leverage. While 50:1 leverage may not have been the ideal outcome for many traders, it was a big improvement from 10:1, which would have crippled the industry. So in that instance, the voice of the trading public did in fact make a big difference.
  • #209
  • Aug 7, 2012 9:50am Aug 7, 2012 9:50am
Quoting ybfjax
I am particularly interested in the insurances of client funds. That seems to be something that the NFA/CFTC is intentionally avoiding. Fraud or no fraud, can the client funds be rapidly recovered?
I can tell you from our discussions in Washington that while insurance is a very popular idea with the trading public there is strong opposition to it with certain members of Congress. The CME has serious concerns about the costs involved and has repeatedly expressed their reservations about a SIPC style insurance plan for futures traders who are speculating in the market as opposed to those hedging physical commodities. We'd love to see insurance passed but to date it appears to be an uphill climb.

We believe giving traders the ability to look inside each FCM to judge the financial health of the firm they are doing business with will at least enhance the public's due diligence capabilities. In the case of PFG, there was no way for the public to judge how unhealthy this company was because one CEO had the ability to completely hide all the key financial data.


Charles Delano
Director of Government Affairs
FXCM, LLC
http://www.fxcm.com/financials.jsp
  • #210
  • Edited Aug 8, 2012 6:17am Aug 7, 2012 4:54pm | Edited Aug 8, 2012 6:17am
Dear FXCM representatives,

I was debating if I should spend energy on writing and posting this or not. Well, I guess that the “posting it” side won.

Looks like no one cares about what you think or what you think you know. Get some scruples. Here are some links to your most recent crap/screwing people over … And, you dare come in here like people who want to help…

1.https://www.google.ca/webhp?sourceid...&bih=902&ion=1
2.https://www.google.ca/webhp?sourceid...w=1493&bih=902
3.https://www.google.ca/webhp?sourceid...&bih=902&ion=1
4.http://forexmagnates.com/full-detail...s-action-suit/

Yeah, FXCM thinks that FXCM is the best company in the universe according to FXCM.
5.http://www.forexfactory.com/news.php?do=news&id=374079

Do I really need to post more links? Please…

Hey, maybe I should just post these links in your thread… In the same manner that you are posting here, trying to be some “sorta” savior. Seriously, you posting here shows a really low level of compassion and a really low level of decency. I would never deal with a company such as yours. I hope you are raking in the big bucks for this kind of solicitation. Man, you guys are on top of the A-hole list…

The nerve and shamelessness of some people… Please, keep to your own thread.


Sincerest regards,

Ramy3
Director of my own affairs.
Ramy3, LLC.
(Hey “MA”, look, I got me a title.)

P.S. Do not expect any reply to your reply. I have said my piece.
Fuck Forex Factory.Wake up people.
  • #211
  • Aug 7, 2012 5:22pm Aug 7, 2012 5:22pm
Quoting ramy3
Dear FXCM representatives,

I was debating if I should spend energy on writing and posting this or not. Well, I guess that the “posting it” side won.

Looks like no one cares about what you think or what you think you know. Get some scruples. Here are some links to your most recent crap … And, you dare come in like people who want to help…

1.https://www.google.ca/webhp?sourceid...pw.r_qf.&cad=b
2.https://www.google.ca/webhp?sourceid...w=1493&bih=902
3.https://www.google.ca/webhp?sourceid...w=1493&bih=902


Yeah,...
Only link 4 works...
  • #212
  • Edited 6:20pm Aug 7, 2012 5:27pm | Edited 6:20pm
thks, fixing them. Not sure what happened...
Fuck Forex Factory.Wake up people.
  • #213
  • Aug 8, 2012 12:13am Aug 8, 2012 12:13am
Quoting FCM-Reform
I can tell you from our discussions in Washington that while insurance is a very popular idea with the trading public there is strong opposition to it with certain members of Congress. The CME has serious concerns about the costs involved and has repeatedly expressed their reservations about a SIPC style insurance plan for futures traders who are speculating in the market as opposed to those hedging physical commodities. We'd love to see insurance passed but to date it appears to be an uphill climb.

We believe giving traders the ability...
Thanks for the update. But the insurance could be limited to covering the actual account balances of the trader accounts, not the underlying assets. The insurance premium could be partially funded by a separate exchange fee, partially funded by broker, and partially funded by NFA/CFTC fine money. In fact, a certain % of fine money (80+%) should go directly to funding insurance or some pool that could be tapped into to recover investor's funds in case of broker insolvency. There could be a minimum insurance coverage, and optional additional insurance if the trader wanted it or based on other factors.

I would love to see FXCM offer an official comment suggesting some type of insurance against trader funds.

It was interesting though that 'Jason Rogers' did not post this information.
Measure trends automatically with zero lag
  • #214
  • Aug 8, 2012 12:35am Aug 8, 2012 12:35am
broker's only speak when it benefit them.
  • #215
  • Aug 8, 2012 7:24am Aug 8, 2012 7:24am
Quoting ybfjax
Thanks for the update. But the insurance could be limited to covering the actual account balances of the trader accounts, not the underlying assets. The insurance premium could be partially funded by a separate exchange fee, partially funded by broker, and partially funded by NFA/CFTC fine money. In fact, a certain % of fine money (80+%) should go directly to funding insurance or some pool that could be tapped into to recover investor's funds in case of broker insolvency. There could be a minimum insurance coverage, and optional additional insurance...
The roadblocks appear to be any kind of exchange fee to fund insurance could lead to higher fees for everyone. Also, NFA has stated they would need Congressional authorization to be involved in any kind of insurance scheme since their charter does not grant them the authority to direct any money into an insurance pool. But tomorrow's hearing could delve into the mechanics of customer insurance so it will be well worth watching.
  • #216
  • Aug 8, 2012 11:47pm Aug 8, 2012 11:47pm
Quoting FCM-Reform
The roadblocks appear to be any kind of exchange fee to fund insurance could lead to higher fees for everyone. Also, NFA has stated they would need Congressional authorization to be involved in any kind of insurance scheme since their charter does not grant them the authority to direct any money into an insurance pool. But tomorrow's hearing could delve into the mechanics of customer insurance so it will be well worth watching.
As I stated on another thread, it actually does not have to be gov't backed insurance. It can be private insurance.

Where can someone enter comments on the various roundtables/hearings?
Measure trends automatically with zero lag
  • #217
  • Aug 10, 2012 8:55pm Aug 10, 2012 8:55pm
Quoting FCM-Reform
They did indeed receive more comments on the leverage issue than ever before. And because of those comments the CFTC did not implement 10:1 leverage. While 50:1 leverage may not have been the ideal outcome for many traders, it was a big improvement from 10:1, which would have crippled the industry. So in that instance, the voice of the trading public did in fact make a big difference.

No it made no difference... first you have to realize we had 400:1 leverage prior to the drop to 100:1 leverage so we gave up a hell of a lot from 400:1 leverage to 50:1. While 400:1 happened outside the comment period we still had already given up alot. 50:1 to 10:1 big deal. The whole thing is a sham game.

FIFO and Hedging? yeah what happened to those? Convenient I'd say. The whole idea in the leverage requirement was to make it easier for the broker to invoke margin call due to over trading.... or in the event of a scam broker require someone to put in more capital to avoid the 'margin call' scam. So it does two things... keeps the money flowing and increases profits from people opening up accounts with a few hundred squid. (Yeah I see the stupid commercials everywhere "you can open an account with $25." Might as well break out a lighter and set it on fire... so don't play naive with me.)

All this at the same time the NFA / CFTC had our backs and were protecting us from ourselves. LOL. When they can't even do their own stupid job hence MF GLOBAL & PFG Best. Once a good boys club always a good boys club.

Put your money where your freakin mouth is. You want to see confidence come back then insure our freakin money. There's no reason not to the money is sitting in a US Bank that has FDIC insurance to $250K.

And kick the Broker heads off the advisory boards while you're at it. No more good boys club.
  • #218
  • Aug 10, 2012 9:08pm Aug 10, 2012 9:08pm
Quoting FCM-Reform
The roadblocks appear to be any kind of exchange fee to fund insurance could lead to higher fees for everyone. Also, NFA has stated they would need Congressional authorization to be involved in any kind of insurance scheme since their charter does not grant them the authority to direct any money into an insurance pool. But tomorrow's hearing could delve into the mechanics of customer insurance so it will be well worth watching.

Oh bull crap... you just want to make excuses for your lame ass.

It's simple: Broker has account with THE BANK. In the USA who cares what bank it is.... all of them have FDIC insurance.

Customer of broker comes to broker to open account. The bank holds the funds in insured account at THE BANK.

THE BANK then turns to Broker and says: here's your customer he has this margin to trade. A guarantee of whatever amount.


--------

How it is now: Broker has account. Customer has account with that broker has total control over. (In every example so far comingled money.)

In the example above the bank acts as the intermediary or the guarantor of the funds the customer has. The broker gives up that control.


Would there be some costs? Sure. You don't work for free and neither would the bank. But in my eyes it's your cost of doing business because you can't be trusted. The confidence thing is YOUR FAULT is it not?

Well you and the good boys club that put it together. There's simply no reason good enough at this point.
  • #219
  • Aug 11, 2012 3:14am Aug 11, 2012 3:14am
Quoting ramy3
Dear FXCM representatives,

I was debating if I should spend energy on writing and posting this or not. Well, I guess that the “posting it” side won.

Looks like no one cares about what you think or what you think you know. Get some scruples. Here are some links to your most recent crap/screwing people over … And, you dare come in here like people who want to help…

1.https://www.google.ca/webhp?sourceid...&bih=902&ion=1
2.https://www.google.ca/webhp?sourceid...w=1493&bih=902
3.https://www.google.ca/webhp?sourceid...&bih=902&ion=1
4.http://forexmagnates.com/full-detail...s-action-suit/...

Yeah Ramy they really are a piece of work... I'll give them that much.

And then they wonder why their customer's have no confidence in them? LOL.

It's probably pretty lonely at the top of the pyramid scheme they built and they're getting thin on suckers.

http://photos3.fotosearch.com/bthumb.../u18134555.jpg
  • #220
  • Aug 17, 2012 10:03am Aug 17, 2012 10:03am
http://abcnews.go.com/US/wireStory/f...3#.UC54891lTB8


The founder of an Iowa-based brokerage has pleaded not guilty to fraud charges stemming from a suspected $200 million embezzlement scheme that drove his firm to bankruptcy and ripped off thousands of customers.

Peregrine Financial Group, Inc. CEO Russ Wasendorf Sr. entered the plea at an arraignment hearing Friday in Cedar Rapids federal court. He is charged with 31 counts of lying to regulators.

Wasendorf's image as a prominent businessman and philanthropist crumbled when he was found in his car outside Peregrine's headquarters in Cedar Falls unconscious after attempting suicide last month.

Investigators say they found a suicide note in which he confessed to a 20-year fraud scheme, and admitted during an interview from his hospital bed to stealing at least $100 million from customers.
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