On a related matter: mf-global-customers-will-recover-all-they-lost "The authorities came to believe that an employee in MF Globalâs Chicago office transferred the customer money, perhaps inadvertently, to banks like JPMorgan Chase." Interesting wording - does that mean that a rogue clerk and a fat finger incident occurred but nobody knew for a few years about it? Good on JPM for rescuing customers. One poor fellow even lost "potential interest" - a real sad tale of woe! (I lose some "potential profits" every year! Could I file a claim somehow?) http://dealbook.nytimes.com/2013/11/05/mf-global-customers-will-recover-all-they-lost/?_r=1& Perhaps there is hope for PFG as well given time.
A primer on how to forstall continuing inquiries. Years ago the head of the securities department of a major New York law firm told me that you can steal as much as you want in the investment business without doing time. Just be sure that you can make everyone whole if you get caught.
Here's some news that I was hoping for : http://www.reuters.com/article/2013/11/06/usbank-cftc-lawsuit-idUSL3N0IR0V720131106 "A federal judge rejected U.S. Bank's motion to dismiss a lawsuit that accused the bank of letting Peregrine Financial founder Russell Wasendorf Sr secure loans against money that belonged to his brokerage's customers, a court filing showed......" So there is still hope that U.S. Bank might settle and make PFG customers whole or nearly so......
Why is this ruling so surprising? US Bank MUST and WILL pay for its employees gross negligence not to say criminal acts. Not to forget about interest for every investor they owe money + a nice fine to NOT REPEAT it.....
Exactly right! But you are about the first person I have seen on any forum to say that, or indeed to say anything at all on U.S. Bank liability. People are far too apathetic and have been focusing on how to write off losses for tax purposes or on future reforms instead of first and foremost getting their money back! Thank goodness the CFTC has now sued U.S. Bank (after waiting a year). We also have the class action lawsuit pending. It is very helpful that other banks sued by regulators on a variety of issues have been settling recently and paying out billions to do so. It sets the right tone. Hopefully this one will have the same outcome. I was afraid for a while that the Trustee might cave and settle with U.S. Bank on grossly inadequate terms just to get the bankruptcy finished quickly. U.S. Bank has been stalling on even paying back the remaining cash balance of PFG's accounts without an agreement with the Trustee that it likes. Fortunately the CFTC suit makes it impossible for the Trustee to settle with U.S. Bank for too small an amount while the suit is pending. If you know of any forums or ways to increase pressure on this issue, please post them!
US BANK's negligence and forestallment has been well known by my attorney's since they interviewed Russell Wasendorf <u>JR</u>. Their involvement will pass this judgement but doesn't curtail them from amends like lost profits or how they handled my accounting department's balances. If on one day you see a double wire be added to your account, then that money should be the signal something's not right at all...
They have just proposed the second distribution. The first was 30% for customers who used U.S. exchanges. The second will be only 7%. http://pfgchapter7.com Arggh!
More news. The Trustee is proposing an agreement with the class action plaintiffs to coordinate their suits against the banks and other defendants. That part sounds fine to me in principle. However, I am puzzled by one part of the agreement which is cited by the WSJ in a story titled "Peregrine Trustee, Customers Strike Deal Over Legal Claims" : "One condition of the trustee's agreement is that the customers and Peregrine settle legal claims against one of those banks, J.P. Morgan Chase Bank." Why is the Trustee requiring that customers's representatives settle with JP Morgan? What are the terms of the proposed settlement? Are they favorable or are we just giving up our claims against JP Morgan for no good reason?
No, it is because JP Morgan held custody of assets transferred between them and US Bank where segregated accounts were held and so Morgan was creating the actual segregation while US Bank handled the pools futures transactions in a ledger whose only purpose was to total funds up to required margin levels and segregate the excess margin by showing that this was at JP Morgan And held futures positions for benefit of the accounts allocation in the commingled pool with US Bank and this is what made the scheme illegal in that segregation is only with regard to the funds held by the investors excess margin meaning cash only protects futures customers who are not participating in the market but otherwise own the contracts in the commingled pool when at maintenance margin call levels the excess margin ended less than the required maintenance margin agreements between investors and the exchange's FCM PFG defaults in this scenario because it ended up being that by segregating excess margin only that makes it possible for maintenance calls for trades in the US Bank commingled we'll just say large fund that what is left over in the supposed segregated accounts at JP Morgan where funds I personally wired from US Bank to JP Morgan House accounts when funds are received they are treated as funds of the broker and this allowed PFG to cast a shadow on who really held the securities of this particular FCM so that PFG's CEO Russel Wasendorf regularly used this particular account to move all cash positions to it in order to show the company's results were stable and so JP Morgan loaned money that captured the US Banks segregated Assets at JP Morgan by margining excess liquidity through tally direct accumulation of firm when accounts were merely held to task and keep notes as to who and how much money is being made. This embezzlement is still illegal because underwriters at both banks and particularly with regard to the Morgan House account using excess liquidity as collateral allowed the CEO to create a fraud which could not have been detected by NFA or CFTC officials without live wire monitoring of bank accounts so that funds for the purpose of segregation appeared to be segregated in that everything is accounted for but when maintenance calls in the market exceed excess liquidity being truthfully lower than shown by the excess liquidity of the JP Morgan House Account only that house account being composed of nearly 24,000 accounts presented an opportunity for PfG's CEO and his son to essentially make PFG appear to be more capitalized than it really was since loan payments came due which washed customer segregated funds away at Morgan leaving accounts at margin or maintenance levels to be capitally deficient and produced a default that froze all cash positions and per CFTC requirements resulted in clients being only able to close open futures positions and wait for their return of capital which if loans made via JP Morgan's House account were not represented in debentures to be part of PFG's assets they really were in fact property of nearly 24000 individuals and entities so while customer money was segregated any banks writing loans using segregated asset account values reported by PFG as being part of an FCM and brokerage house account allowed a fraud to occur that cleverly combined the rudimentary appearance of so-called house accounts which have different stature and meaning between the futures and securities industries. Because PFG was also a Broker-Dealer, it used a non compliant oversight to facilitate the legal categorization of house accounts as property of that dealer, whereas in the futures industry house accounts should be internal proprietary trading capital earned through successful trading in properly classified fund level accounts. Thus, both US Bank and JP Morgan are guilty of gross criminal negligence that allowed futures customers to segregate cash to JP Morgan's PFG BEST'S House account and through some quick software upgrades allowed the account of every customer's deposit to immediately be considered equity in a securities over categorization which determined custodial uses under SIPC for brokerage accounts but granted to futures customers access for the company to install loans and debit customer funds as they new debts issued to PFG made the possibility that the liquidity wash instantly took a day's margin or maintenance level to be undercapitalized in the sense that were there losses in the commingled fund list of positions at the FCM sent excess liquidity available through the establishment of a futures customer's registration and remittance to JP Morgan House account to be pledged and paid as collateral for various loans the CEO Wasendorf made through the fraud and thus even though PFG had some of the best securities and futures trading algorithms available to it the fact is that at one point a debit to the house account was taken because it was identified and legally considered to actually be net equity of the company when the net equity of the company was literally trivial to the eventually is momentary when House accounts were somehow not large enough to one the positions of every customer's loan so the futures customers have received compensation thus far of 30% and another 7% interim distribution that should be tacitly refused and denied by the judge who should fair side-by-side that illegally modified loans cannot be used to deny owners equity that was segregated but through the compliance procedures made books and financial records able to withdraw and leverage all deposits made towArd PFG's numerous other failed ventures. Both JP Morgan and US Bank are directly responsible for the misrepresentation of the house accounts as bona-fide property of PFG and so with illicitly nonregulated investment activities allowed lenders to contact these banks with regard to the "net equity" of "PFG's House Account." So, in failing to verify the purpose of funds verification requests and checks allowed the CEO to make customer property appear to be net equity attributable to PFG when it was actually the customer's own sacred segregated money that was fraudulently bankrupted through illegal approval of loans and oversights who did not verify directly whether reports in bank statements were true or not. However, given if true, the account was commingled in cash, broke down to dtc number parceled between securities and futures customer accounts who deposited via FBO remarks in wires verifying a net equity investment securities regulators consider as equity investment in the company but through software along with securities individualized the accountability of every deposit to be fraudulently used as money on JP Morgan and US Bank response to debentures written against their net equity so since nobody was aware that fund ach wires checks and transfers were essentially bunched into one dtc number gathered out then futures customers house deposits thereby misrepresented so that both JP Morgan and US Bank should have been able to deny reporting PFG's CEO Russell WAsendorf then used to obtain the loans that ultimately caused PFG's default.