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PFGBEST accounts - LIQUIDATION ONLY - NFA Problems!
https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?t=687		 Page 6 of 10
Author:  FCM-Reform [ Tue Sep 18, 2012 4:38 pm ]
Post subject:  NFA Moves Forward on Public Disclosure
The National Futures Association has added some additional public financial information on their BASIC search function effective September 1:

http://www.nfa.futures.org/news/newsNot ... cleID=4109

At its August meeting, NFA's Board of Directors determined that certain FCM financial data should be made publicly available on NFA's website to assist customers in their due diligence review of an FCM.

The Board determined that the best way to display this information is on an FCM-by-FCM basis through NFA's BASIC system. Therefore, NFA is adding new sections to each FCM's BASIC page to disclose certain financial related information. Specifically, from each FCM's BASIC page, the public will be able to access three separate FCM Reports - FCM Capital Report; FCM Customer Segregated Funds Report; and FCM Customer Secured Funds Report.

These actions are a step in the right direction. Clearly, regulators believe that public disclosure of FCM financial accounts are beneficial to customers as they conduct their due diligence. It therefore follows that additional financial disclosures (complete disclosure of a FCM's balance sheet for example) would empower traders to an even greater degree.
Author:  FCM-Reform [ Fri Sep 21, 2012 12:04 am ]
Post subject:  PFG Distributions Begin
The federal bankruptcy judge in the PFG case authorized a series of initial customer distributions today. http://www.foxbusiness.com/industries/2 ... oney-back/
The first wave of payouts will happen by October 8 and a second wave will occur before October 29, Fishman said.

The Commodity Futures Trading Commission initially raised concerns about the trustee's plan because of uncertainty about the integrity of Peregrine's books. The commission warned that some people could get money they were not entitled to without proper vetting of records.
The fate of PFG's retail forex customers remains in doubt. The CFTC has yet to announce their proposed reforms. Retail forex needs to be a part of these reforms. We're still encouraging traders to contact CFTC at secretary@cftc.gov to voice their concern.
Author:  FCM-Reform [ Tue Sep 25, 2012 3:45 pm ]
Post subject:  Reuters Special Report on PFG
Reuters has just published an exhaustive two part special report on the fraud perpetrated by Russ Wassendorf. Wassendorf spent tens of millions of dollars on luxury items and in failed business ventures with money stolen from client accounts.

Part One: http://in.reuters.com/article/2012/09/2 ... EJ20120924

Part Two: http://in.reuters.com/article/2012/09/2 ... HF20120925

One of the most distressing aspects of the fraud is that Wassendorf was nearly caught last year in a routine audit but managed to head off the NFA with a last second fax that allowed him to keep the fraud going for another year. The episode highlights the need for greater auditing and accounting standards, not to mention the need for more financial disclosures for brokers so as to prevent lone wolf CEO's like Wassendorf from hiding the true state of their firm's finances.
Author:  FCM-Reform [ Fri Sep 28, 2012 5:36 pm ]
Post subject:  CFTC Releases Roundtable Transcript
The CFTC has released a transcript from the public roundtable that was held in August.
http://www.cftc.gov/ucm/groups/public/@ ... 080912.pdf

While retail forex is absent from the discussion the issues pertaining to FCM’s is of importance to retail forex customers since FCM’s like PFG routinely offer retail forex as part of their suite of products.

One of the arguments against additional financial disclosures for FCM’s is that these disclosures may weaken the fragile, financial health of less profitable FCM’s. Warren Davis of Sutherland, Asbill & Brennan made the following point in response:


"In the case of a FCM, the money that the customer gives the FCM is not for the use of the FCM. It's solely to protect the customer, so it seems to me that the run on the bank analogy is not altogether appropriate here. But what is appropriate is to ensure that customer money is, in fact, used for the only purpose for which it's given which is to secure the customer's obligations to the FCM and the clearinghouse. And therefore, if information is released which causes a customer to move its account from one FCM to another, that shouldn't be viewed as a bad thing. That's sort of the way the futures world is supposed to work."


Unfortunately, that is not currently the way the futures world works. Because FCM’s are able to keep their financials hidden from the public there is no way of truly knowing if the firm traders are doing business with is healthy or unhealthy. The net result is that traders are left to play a guessing game about whether their funds are safe or not.

CFTC has yet to announce when they will unveil their reform proposals.
Author:  garyfritz [ Fri Sep 28, 2012 5:41 pm ]
Post subject:  Re: CFTC Releases Roundtable Transcript
FCM-Reform wrote:One of the arguments against additional financial disclosures for FCM’s is that these disclosures may weaken the fragile, financial health of less profitable FCM’s.
Good. If an FCM is fragile, that means it's putting its customers' money at risk. The customers need to know that so they can move their money to someplace safe.
Author:  garyfritz [ Mon Oct 01, 2012 2:38 pm ]
Post subject:  Re: PFGBEST accounts - LIQUIDATION ONLY - NFA Problems!
Just received this very interesting and disturbing email. See http://www.PFGForexMetalsLegalAccount.com for more details.

===

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.

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 thetreatment 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 ofindications 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 http://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
Author:  FCM-Reform [ Tue Oct 02, 2012 4:45 pm ]
Post subject:  PFG Customers Still at the back fo the Line

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.
FXCM has been lobbying Congress since 2005 to include retail forex in any bankrupcy prodeeding but we have not had much success due to the hesitancy of Washington to re-open the bankruptcy code on behalf of retail forex customers. In the meantime, the PFG bankruptcy should give retail forex traders pause in regards to opening a retail forex account with a Futures Commission Merchant instead of a Retail Forex Exchange Dealer due to the disparity in treatment the two class of customers are getting in this bankruptcy.

We are also still encouraging traders to contact CFTC at secretary@cftc.gov to urge greater protections for retail forex traders.
Author:  garyfritz [ Tue Oct 02, 2012 5:19 pm ]
Post subject:  Re: PFGBEST accounts - LIQUIDATION ONLY - NFA Problems!
Apparently I'm confused. I thought all US forex brokers were FCMs.

* What's the difference between an FCM and a Retail Forex Exchange Dealer?
* How do the RFEDs treat forex accounts differently?
* Who are some RFEDs?
* What about a broker like Forex.com? Their website says "FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association ..." So what is the customer protection with a company that is an FCM and an RFED?
Author:  FCM-Reform [ Tue Oct 02, 2012 8:15 pm ]
Post subject:  Re: PFGBEST accounts - LIQUIDATION ONLY - NFA Problems!
garyfritz wrote:Apparently I'm confused. I thought all US forex criminals were FCMs.

* What's the difference between an FCM and a Retail Forex Exchange Dealer?
* How do the RFEDs treat forex accounts differently?
* Who are some RFEDs?
* What about a criminal like Forex.com? Their website says "FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association ..." So what is the customer protection with a company that is an FCM and an RFED?
FCM's are Futures Commission Merchants whose primary business is on-exchange futures. RFEDS are retail foreign exchange dealers whose primary business is over the counter currency trading. PFG was a Futures Commission Merchant. However, FCM's are allowed to offer over the counter currency trading.

Both FCM's and RFED's treat their foreign currency accounts the same (neither category offers seg funds protection). The problem we are seeing now with PFG, however, is that because futures customers get priority over forex customers it may not be a wise move to be a forex customer at a futures firm. With RFED's, in the event of bankruptcy there is one fewer category of customer (the futures customer) waiting in the bankruptcy line ahead of them ready to lay claim to the assets.
Author:  garyfritz [ Tue Oct 02, 2012 8:32 pm ]
Post subject:  Re: PFGBEST accounts - LIQUIDATION ONLY - NFA Problems!
I see. Thanks for the clarification.

So how does one find RFEDs that aren't FCMs? The only likely one I can think of offhand is CitiFX Pro.

Also, right after the PFG blowup a report got passed around that rated all the forex (and futures?) brokers. PFG, as it turns out, was near the bottom of the list. I've lost the link to that report. Anyone have it handy?
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