That is not a completely accurate statement. The typical CTA is a direct managed futures account. My clients, for example, maintain their own account with the FCM. They don't wait for me to supply quarterly statements, but instead have access to their account at any time. They can see what trades are being made, and PnL whenever they so desire.
Madoff wasn't just acting as the adviser. He was also the broker/merchant. Two different companies. He was sending fabricated statements generated by his own company. Thus having the ability to show trades that were never made. To do this, the CTA must also own the FCM and require clients to use that FCM. This isn't typical. If I were to try to do what Madoff did, I would need to bribe Interactive Brokers or another FCM to creating false software for me. An impossible task.
Conversely, If I were running a CPO, I wouldn't need to include the FCM in the fraud. I would simply need to send out false statements. The only way that I could be caught is by not being able to accommodate a withdrawal request, or if I were randomly audited. So for all but the very large advisers, it is virtually impossible for me to present false trade statements.
