PFG - What happens if you have accounts with them??

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 and encourages traders to do likewise ahead of Thursday's meeting.

Proposals to Bring Full Market Transparency and Accountability to the Futures/Forex Industry


1) Require All FCM’s to Publicly Publish Their Financials Once a Quarter:

Currently, the CFTC publishes monthly “Net Capital” reports that disclose to the public how much money a Futures Commission Merchant has set aside in capital. However, that report provides very little insight into how well the company is doing financially. By requiring FCM’s to publish their audited financials the trading public will know how much risk they are taking with each firm since investors will be able to weigh the liabilities along with the excess capital that a Futures Commission Merchant has.

Furthermore, the published financial statement should include everything (i.e. holding company’s financials) since what happens to other subsidiaries of the company can easily affect the regulated FCM. Each company should be required to provide a link to its financials on its own homepage so that the public can do its proper due diligence.

Too often, those FCM’s that are teetering on the edge of bankruptcy lure customers in by offering unsustainable gimmicks (dirt cheap commissions, account opening bonuses) that temporarily puts off the inevitable. Customers should be aware of the perilous finances of those FCM’s that would offer these kinds of gimmicks before opening an account with such a firm. PFG Best was a classic example of a firm that used such gimmicks as they routinely low balled their competitors with uneconomical discounts that no reputable, legally compliant firm could match.

2) Require all FCM’s to Employ a Top Ten Accounting Firm:

There need to be much higher accounting standards than currently exist in the FCM world. The Platt Group publishes an annual ranking of public accounting firms that could be used by FCM’s. Whether it is top 10 or top 25, the main point is that FCM’s must use a nationally recognized and respected accounting firm that could apply the same tough standards to FCM’s that publicly traded companies must meet.

While no one proposal will guarantee that a future FCM will not fail, these proposals will help enhance the public's due diligence capabilities by bringing greater market transparency and accountability into the world of futures/forex trading.

Traders can show their support for these proposals and others by leaving comments with the CFTC using the following web page:

http://comments.cftc.gov/PublicComm...rm.aspx?id=1250




Charles Delano
Director of Government Affairs
FXCM, LLC
http://www.fxcm.com/financials.jsp

 

Heads up, the PFG Trustee has posted claims forms to be filled out.

http://www.omnimgt.com/SBLite/Templ...CTH/UoH71miODakPIzfeAY2Jz9cbvsKRVwkWisq+56Os=

Oh joy, been through this with MFG, now I get to do this with PFG. My advice is read thoroughly, take your time when filling them out, watch the CCC site for clarification to the questions that come up.

 

Attention PFG FX and Metals Account Holders,

We are contacting you as fellow Peregrine Financial Group, Inc. (PFG) Forex and Metals account holders. We would like to share information with you that directly impacts all Forex and Metals accounts during the current PFG bankruptcy proceedings. The following information pertains to the perilous status of our accounts and should be of concern to every Forex and Metals account holder. Please read this entire e-mail as this is not spam.

A fellow FX account holder, Scott Shofner, contacted the PFG Trustee, Ira Bodenstein, and asked him directly why there are no plans to distribute the Forex and Metals accounts. The Trustee informed Mr. Shofner that he categorized our accounts as unsecured and therefore our accounts are not protected under the bankruptcy laws. (At least two additional Forex account holders have been told the same by the Trustee.) The Trustee also stated that because we signed the PFG Risk Disclosure Agreements when opening our PFG accounts it puts our accounts at full risk. The results of this conversation prompted the search to find proper legal representation to protect our FX and Metals accounts.

A fellow FX account holder, Rick Medley, appeared and represented himself in the PFG courtroom last week (9/12/12). Inside a courtroom filled with attorneys representing PFG Futures/Options/Commodities account holders, there was no legal council representing us as FX and Metals clients. Contrary to our previous understanding, not even the Commodity Customer Coalition (CCC) appeared to be supporting FX and Metals clients in the courtroom. Mr. Medley confirmed from his presence and while addressing the court during the bankruptcy proceedings last week that FX and Metals clients were without legal representation in Judge Doyle’s courtroom. Mr. Medley stated in court on 9/12/12 that it was his understanding that all the money Mr. Wasendorf had stolen came out of futures accounts and no money was stolen from Forex accounts. Neither the Trustee nor anyone else disputed this in court. His testimony in front of Judge Doyle was the first step in representing our accounts.

Our Forex and Metals monies are currently intact at JPMorgan Chase Bank and Royal Bank of Scotland as confirmed by the Trustee. You may think that because our accounts are listed in the Trustee’s documents that our accounts are safe. Initially we believed this as well. In fact, if you carefully read thru all the Motions, schedules and documents submitted to the bankruptcy court, nothing could be farther from the truth. Our accounts are at risk of being completely emptied in the current legal proceedings - effectively stealing our money in the next few weeks - and converted to pay Futures account holders and the Trustee’s law firm. We view what may be about to take place as equivalent to criminal theft/larceny. We never in our wildest dreams thought that one man or a group of lawyers could put 100 percent of our accounts at risk, do it openly, publicly, and legally get away with it. The Trustee’s Motions are designed to distribute $123 million to Futures account holders – which was approved in court on 9/20/12 – and will deplete the funds available to Forex and Metals account holders. We need to immediately protect our accounts. If we let the Trustee and the dozens of lawyers representing non-Forex and non-Metals clients take our money without doing anything about it, then we don’t have anyone else to blame but ourselves. We cannot sit idly by and watch our hard earned money be divided between creditors and other customers.

Previous brokerage bankruptcy proceedings have set an ugly track record for FX clients and have resulted in the complete loss of Forex and Metals accounts. The current PFG bankruptcy proceedings and the lack of action by the Trustee to disperse our FX and Metals funds to us are creating many questions and causes for concern. We are frustrated and shocked with the entire PFG bankruptcy proceedings and lack of fair play toward all PFG account holders. We refuse to watch our money be stolen with impunity. We have decided to take action to protect our accounts. We feel legal representation is necessary in order to protect the accounts we have spent our entire lives building. Individually, we do not have the cash reserves to hire the right attorneys to represent us. We must join together to share the attorney’s fees required to protect all of our Forex and Metals accounts.

 

continued:

For those of you unsure about hiring legal representation or contributing… or are concerned that we are perpetrating a scam … or don’t believe that the Trustee can legally empty our accounts … we invite you to do your own due diligence: (hyperlinks are included to the relevant websites/documents)
Contact the Trustee, Ira Bodenstein, (312) 666-2861, and ask him why FX and Metals accounts are not included in the distributions.
Read footnote 11, page 340 of the Motion to Liquidate FX Accounts submitted 7/27/12 in which the Trustee states we are not PFG “customers” under the bankruptcy code and that the treatment of our claims and distributions is unknown.
Read section C8 – C12 (especially sections C11 and C12), pages 8-9 of the Motion Approving Interim Distributions to Certain Customers submitted 9/05/12 in which the Trustee once again states that we are not considered PFG “customers” under the bankruptcy code and will not be included in such distributions.
Read sections 16 & 17, page 10 of Notice of Motion to File Proofs of Claim submitted 9/18/2012 which states Forex and Metals account holders are not “customers” under bankruptcy code, do not hold claims against the Debtor and the Claims Process does not address the issue of the treatment of the claims of Forex and Metals Customers.
Read pages 14-16 of the PFG Presentation to Customers and Creditors submitted 9/10/12 which lists the shortfalls and balances in the domestic futures, foreign futures and FX/Metals accounts.
Read pages 10 & 12 and exhibit B-2, pages 19 - 23 of Schedules A, B, D, E and Schedules F Parts 1 – 7 submitted 9/06/12 in which it lists PFG’s liabilities at $525 million and its assets at $270 million - numbers including Customer Accounts and Financial Accounts respectively.
Read footnote 2, page 16 of the PFG Presentation to Customers and Creditors submitted 9/10/12 in which the Trustee states that while cash related to our contracts was kept in separate accounts, Forex/Metals customers should not draw conclusions on potential recoveries due to specific legal issues which need to be resolved.
Look up our names in the PFG Forex Customer Service List on pages 5-332 of the Motion to Liquidate FX Accounts submitted 7/27/12 to confirm we are fellow PFG account holders.
Contact the Commodity Customer Coalition (CCC) and ask why they are failing to represent the interests of the FX and Metals clients in the PFG courtroom as well as in the US Senate Ag Committee hearings that took place a few weeks ago.

For those of you needing further proof that our accounts need to be represented and protected:
Late Wednesday afternoon (9/19/12), the Trustee moved up a scheduled court Hearing from Friday (9/21/12) to Thursday (9/20/12) to quickly get his Motion for Interim Distribution signed for Futures/Commodities account holders only.
Due to the scheduling change, our attorneys were unable to finalize a Motion to the court to postpone the Distribution Order. They were allowed to present verbal objections in front of Judge Doyle, the CFTC representative and the Trustee, Ira Bodenstein.
The Trustee admitted to the absence of any written audit report on the accounts as well as to the discovery of indications of fraudulent activities within the PFG Futures accounts that were the subject of his Distribution Order.
The Trustee confirmed an intact balance of $44.58 million in FX and Metals accounts in addition to the $193.87 million in Futures/Options/Commodities accounts.
Our attorneys spent most of the day (9/20/12) in the courtroom representing us as FX/Metals clients. Our concerns were presented verbally and as a result Judge Doyle invited our attorneys to submit a new Motion to her court.
This session, as well as all official court proceedings, were documented and recorded by the court. You can confirm this information for yourselves within the Chicago Court computer system or via the public PACER system.

We hope that we have made everyone aware of how critical it is to protect our account balances. Since we are all traders and none of us has the expertise or experience necessary to represent ourselves and our accounts in such a precedent setting bankruptcy case, we feel we have hired the right experienced attorneys to represent us in the courtroom. We must continue to take action to have our FX/Metals accounts represented in front of Judge Doyle.

When our account holders’ fund for attorneys’ fees is exhausted so are our chances at getting our account balances returned to us. We are asking those wanting to help protect their accounts to contribute an initial 1% on a pro-rata basis of your account(s) balance towards the retainer to maintain representation. We are also asking larger account holders to join us on retainer and help represent our accounts more actively. You can contribute one percent to help protect your entire account(s) value or contribute nothing and allow your account(s) to be legally plundered. This is real, and it is happening right now. We are all in this unfortunate situation together. Please join us in our fight to protect and retrieve our accounts. For more information please visit our website www.PFGForexMetalsLegalAccount.com.

If you are interested in joining this group action to protect our accounts, please respond to Info@PFGForexMetalsLegalAccount.com. This is an email account dedicated to initiating contact with us. Do not reply directly to this email (PFGAccountHolders@PFGForexMetalsLegalAccount.com) as it will not be monitored.

We know that this may seem like a unique approach, but this is the only way we know how to contact each of the 7,000 fellow account holders and let you know what is happening with your accounts and what you can do to help protect them.

Please remember that time is of the essence as we are already late in being represented in the courtroom. If we do nothing … then nothing is what we will end up with.

Thank you for your time,
Scott Shofner, Richard Medley, Michael Krall, Aarynn Krall,
Paul Smith, Christopher Olson, David Beyerlein, James Landrum

 

Hi Atticus,
I am both a futures and Forex customer with PFG Best

You stated in your 2 recent posts:

Our Forex and Metals monies are currently intact at J P Morgan Chase Bank and Royal Bank of Scotland as confirmed by the Trustee.
in which the Trustee once again states that we are not considered PFG “customers” under the bankruptcy code

If you combine these two quotes:

The logical conclusion is, if we are not PFG Customers and the accounts are in our names as individuals then we simply contact JP Morgan or Royal Bank and tell them to close the accounts and wire the funds to us directly

It appears the trustee is trying to have his cake and eat it. How is it possible for the trustee to sequestrate assets from bank accounts of individuals who are not customers of the PFG Best. Is that not, in itself illegal?

 

You need to revisit the Refco fiasco from 2005 to see how fx accounts are handled at futures firms. What is happening here is deja vu all over again. Refco taught me a valuable lesson about fx deposits and the consequences of a futures firm blowup.

Feel sorry for you guys who have fx accounts with them but there is already precedent on how these accounts get handled in a bankruptcy and it doesn't end well.

 

the logical conclusion is money is in PFG name and will be used in PFG process.

 

The Wall Street Journal is reporting that PFG's trustee is now going to address the status of PFG's retail forex customers:

http://online.wsj.com/article/SB1000...googlenews_wsj

Of further interest to traders in the article is the NFA's support for additional legal protections, although nothing was specified.

 

I have a PFG managed futures account. Recently received notice from the Trustee that they are in the process of gathering account information for the returning of funds to customers. They requested recent statements.

 

http://www.reuters.com/article/2012/10/05/us-peregrine-vision-transfer-idUSBRE8941I920121005

Vision is getting all PFG accounts.