In a Member Responsibility Action, released Monday afternoon, NFA alleges that PFGBest’s reported customer funds deposited at U.S. Bank did not match the amounts NFA found when NFA contacted the bank Monday. On June 29, 2012, PFGBest reported to the NFA that they had nearly $400 million in customer funds, of which approximately $225 million was purportedly deposited at U.S. Bank. The actual funds found in the account were approximately $5 million. Furthermore, the NFA alleges that in contrast to purported bank confirmations submitted to the NFA that sought to confirm U.S. Bank balances as of February 2010 and March 2011, reported balances of approximately $207 million and $218 million, respectively, were actually less than $10 million for each of these months. NFA says in the MRA that PFGBest was unable to demonstrate to the NFA that it had sufficient capital to meet its minimum adjusted net capital requirements or segregated funds to meet its obligations to customers. John Lothian update
http://pointsandfigures.com/2012/07/09/pfg-best-accounting-irregularities/ The CEO of PFG Best has tried to kill himself. Supposedly, his firm, PFG Best may have had some accounting irregularities. They werenât a full line clearing firm of the CME. So, at first blush, this looks a lot different than the MF Global scandal. Clearing firms are under enormous pressure right now to make a profit. The way most of them are structured, they make a profit from earning interest on the float from accounts. In a 0% interest rate environment, itâs pretty tough to earn any money. Very few, if any, firms want to commit the capital necessary to become a full line clearing member these days. Most take the Introducing Broker (IB) route PFG did. John Lothian tweeted the sad news first. I didnât know Russell Wasendorf really well. He was on the retail side of things. He had built a pretty innovative firm in PFG, and I knew some people that worked there. They were all straight up people. As far as I know, PFG never traded their own account, unlike Jon Corzine at MF Global. Corzine had his own P+L line. The futures industry is littered with people that have killed themselves. I have known a few. Off the top of my head, I can count at least ten people since 1986. Itâs terrible when you are so depressed that it comes to that. Here is a place to get help. Some of my fellow traders are sitting in dark rooms right now. The marketplace as they knew it has been ruined. They donât know what to do. Once you are in a cycle of depression, itâs awfully hard to break. You can try James Altucherâs daily practice, but when you are in the cycle it probably wonât work. You will have to seek pro help. Trading is very tough on your psyche. It wears you out. Itâs easy to get depressed, especially when other things arenât working in your life. Itâs frustrating. In PFGâs case, my gut says the embarrassment of the accounting problem would have caused the firm to go under. Wasendorf had poured his life into that firm and couldnât live with the consequences. Too bad. Itâs another wart on the futures industry that has absorbed plenty in the past few years.
You're giving Wasendorf too much credit. At least alive he can face trial. I doubt this is a basic accounting irregularity. It's pretty fucking hard to lose $220 running a small company.....money might have been stolen or purloined. PFG was never a 'reputable' company. MF was. For a time, MF Global was a VERY reputable company, doing 8.5 million lots per day average, #1 on CME, CBOT, NYMEX, COMEX and ICE. PFG mostly attracted small retail traders, which is unfortunate, because it looks like a bunch of their money is missing. When I think of PFG I think of that arse Phil Flynn, who churns accounts with POA yet somehow flies under the RADAR with NFA. Fuck those guys. We need some prosecutions already.
LOL, Mf was reputable "for a time", what the fuck does that mean? They were reputable as long as it took to accumulate enough money to make the executives rich and get away with screwing everyone else? A lot of companies were reputable at one time or another, and most likely PFG was also, even though they dealt with us pathetic retail traders. I've never had an account with them, but I have with IB and Advantage Futures. My guess either or both could screw me at any time. I am all for going after these clowns personal wealth after they screw the pooch. And all their families wealth, on top of jail terms in real federal prisons, no country club prisons. They should be just as subject to Bubba and his crew of ass raping queers as the guy who sells a couple of pounds of coke, maybe even more so. I bet alot of these pansy execs who are sold as tough guys, would change their tunes if they knew they would go to a real prison, and lose their wealth, and have their pansy kids end up in public schools. I'll never hold enough money at any firm that would cause me to be broke, or in a position of loss of ability to pay bills. Regardless if they steal my money I am going to take care of business.