PFGBest Accounts Frozen

[bduke]

Another brokerage with missing accountholder's funds.

CFTC must not have restricted/eliminated hypothecation and
house trading with customer funds.

IMHO don't leave material dollars in trading accounts.

Cheers... Bill

[TOM4CWB]

Bill,

I was reading about this last night.

$220M missing from margin accounts... so far found....

Trust is the assurance that is in place to pay this back...

REUTERS; UPDATE 2-MF Global redux feared as broker said missing $220 mln

Tue Jul 10, 2012 9:09am EDT

* Nine months after MF Global, pattern looks familiar

* Regulator says accounts hold $5 mln, not $225 mln

* Broker lacks assets to meet obligations-group

* PFGBest founder apparently attempts suicide

By David Sheppard and Tom Polansek

NEW YORK/CHICAGO, July 10 (Reuters) - Less than nine months after MF Global's collapse sent shock waves through U.S. futures brokerages, news that more than one-half of customer funds at Iowa-based PFGBest are missing threatens to shatter the fragile confidence in the industry.

PFGBest, a 20-year old broker of foreign exchange and commodity futures, on Monday told customers their accounts had been frozen after an apparent suicide attempt by its chairman. A few hours later, an industry body said about $220 million in customer funds were not in the brokerage's bank accounts."

Much more....

http://www.reuters.com/article/2012/07/10/broker-pfgbest-mfglobal-idUSL2E8IA0WB20120710

[TOM4CWB]

From the Reuters report:

But on Monday, after receiving information that PFG's founder and owner may have falsified bank records, the NFA said that only $5 million was on account at the bank days earlier.

Unlike the securities markets, customers of futures brokers do not enjoy any government or industry-backed insurance program in the event funds are stolen or go missing.

"Such a fund is critically important. Futures customers should be protected like banking and securit(ies) customers are protected," Bart Chilton, one of five Commodity Futures Trading Commission (CFTC) commissioners, said late Monday.

In the wake of the MF Global collapse last year, exchange operator CME Group Inc set up an insurance fund that covers farmers and ranchers for up to $25,000 and cooperatives for as much as $100,000 when a clearing member fails.

CME Group could not immediately respond to a question about whether the fund would kick in for PFGBest.

While regulators have taken some small measures to toughen up rules protecting customer accounts, investors have said they may not be sufficient to fully restore faith in the industry.

A joint review of the 70 largest Futures Commission Merchants (FCMs) by the CFTC and NFA in January found no "material breaches of customer funds protection requirements during the spot check," leading traders to question the thoroughness of the review.

"You would think that the government would be watching these accounts and doing something," one PFGBest employee said."... OUCH...

[Burbert]

Wait'll the almighty Ontario Securities
Commission gets holda this, they'll tear
them another oriface, er will they just
lievy anoder huge fine?

[Burbert]

Wait'll the almighty Ontario Securities
Commission gets holda this, they'll tear
them another oriface, er will they just
lievy anoder huge fine?

[cottonpicken]

If only we could figure out a way to have a
brockerage that........oh hell nevermind.

[sumdumguy]

I have noticed that even when fraudsters rip
farmers off, we forget veryquickly and go back to
dealing with the same guys. What a bunch of
yahoos! Get the names and mark them indelibly
on every wall.