I made an error:
Quote from Thunderdog:
To begin, let us review the few facts that are known...
3. Larryâs accounts and those of his managed accounts were evidently not segregated...
http://www.elitetrader.com/vb/showthread.php?s=&postid=1007920#post1007920
In fact, I have no factual basis on which to conclude that Larryâs own accounts and those that he managed were not segregated. I apologize for this error. In fact, what I should have written is what William Gallacher had written on page 39 of his book,
Winner Take All. And I quote:
ââ¦Commodity Trading Advisors (CTAs) registered with the NFA are obliged to disclose their actual trading records to the NFA when soliciting public funds through promotions. A large part of the NFAâs Complaint had to do with whether Williams ought to segregate the results of his personal trading from the results of the accounts he was handling for othersâ¦â
So, it was the results that were not segregated, and not the accounts themselves. My mistake. And it was this misleading advertising that led to the paltry fines that both Robbins Trading Company and Larry Williams paid. Further, this deceptive advertising led the NFA to make the following statement in its
Findings and Conclusions as a matter of record:
âThere is no question that Mr. Williams's personal trading accounts had a material effect upon his composite trading performance. The record reflects that for the first quarter of 1987, Mr. Williams's composite performance showed a loss of $6,122,281, while at the same time Mr. Williams's personal accounts experienced a gain of $902,599. The Panel finds that the fact Mr. Williams was making significant gains while managed customer accounts were suffering considerable losses would be a material fact which a potential customer would need to know in order to make a fully reasoned decision.â
In the circumstances, I suppose it was the best that the NFA could legally do to warn potential investors of whom they were dealing with.
Even so, and strictly for hypothetical purposes (of course), please bear in mind that the type of unscrupulous conduct I described as a result of the relative time stamp laxity at the time, could still have easily been perpetrated by those with an inclination to do so. In fact, hypothetically speaking, the poor results in the client accounts and the simultaneous outstanding results in his own personal account were not separate phenomena. Hypothetically speaking, they were the essential two sides of the same equation. Hypothetically, of course.
) to their intelligence.