I still stand by my estimate that the loss is lot larger than the $150 million that optionsellers.com's manager has given out. According to this twitter message, this woman and her husband lost $1 million, their entire life saving. If this is true, this is the typical account or average account size, then the loss is at least $290 million. I wonder is that $93K the management fees or their debit balance.
Optionsellers.com goes bust and the apology video is painful to watch
- Thread starter Sweet Bobby
- Start date
I still stand by my estimate that the loss is lot larger than the $150 million that optionsellers.com's manager has given out. According to this twitter message, this woman and her husband lost $1 million, their entire life saving. If this is true, this is the typical account or average account size, then the loss is at least $290 million. I wonder is that $93K the management fees or their debit balance.
Was this guy soliciting money with free lunch seminars in hotel ballrooms in Florida or something? How does either side of this, the manager or the investor, invest anymore then a very small percentage of a 90 year old's life savings in anything but t-bills, cds, etc? Since these were poa accounts even the fcm should of scrutinized this account, a 90 year old with no income investing 100% of net worth in a commodities trading account. This makes no sense.
I'll add they probably also noted they had 0 years of trading experience. They would definitely have a case against the fcm if all the above was true even if there was a poa.
Well if it's with POA, it would be optionsellers.com or James Cordier trading on their behalf and since James Cordier has 20+ years of experience (on optionsellers.com website it says he has 30 years of experience), no scrutiny needed.
Just the fact that they would of listed a net worth range and the fcm would of seen a majority of that in an account would of raised red flags. Both the CTA and the fcm should of recognized that trading any highly volatile instrument was not suitable for this individual with that percentage of their net worth at that age.
Further since they were poa accounts the fcm should of known the style of trading and evaluated if it was appropriate for each customer before allowing engagement in that style of trading. Given the positions listed on the spreadsheets it would be suitable for very few with a very small percentage of net worth.
No matter how conservative the approach it is recognized that leveraged commodities are volatile and not suitable for all investors when opening an account. That differs from securities accounts that can take different approaches in more stable assets and are suitable for a wider array of investors. It is up to the fcm to make that judgement at the time the account is open and update investor information at least yearly to maintain it is still appropriate. FC Stone is very complicit in this.
True. It didn't dawn upon me before because we were so focused on James Cordier that those accounts were with FCM, FC Stone directly under those clients' name so FC Stone also has their due diligence to determine the suitability of the investment for those clients according to their age, trading experience, risk tolerance. I wonder if they had to fill out that "know your client" questionnaire that asks specifically about their age, trading experience about the instrument that they wanted to trade and their risk tolerance and if they did, what did the client write on those questionnaire. Then again optionsellers.com was probably acting as introducing broker to FC Stone so would James Cordier have more responsibility to know the client? If James Cordier filled them out on their behalf making them out to be experienced and knowledgeable about trading derivatives on commodities futures, then that's lying and fraud.
That we would have to let the court decide.