PFG freezes accounts, CEO attempts suicide
- Thread starter Maverick74
- Start date
Glad I'm not the only guy with a bullshit detector.
Look, if a Government Regulator accepts a fucking "PO BOX" as an acceptable address to send crucial regulatory documents - like requests for bank statements - and neither confirms that PO BOX is owned by the bank (..a fucking PO BOX!!!), nor confirms the veracity of those statements over the phone (or fax!), this has scam written all over it. How exactly was the "PO BOX" address provided to the NFA? Obviously, it wasn't provided by US Bank! So what, did the NFA ask Rumpelstiltskin what address they should send the bank documents, too? What are we, in grade fucking 2!?? Last time I checked, every bank account is tied to a specific branch number and transit ID, whereupon a 3 mins search on US banks' website, will give you the exact mailing address, phone number, and fax, to call in to that branch location!! Any one remember funding their brokerage account here??? RrrrrrrringRrrrrrrinng. Hi! This the NFA. One of your largest fucking customers claims to have a quarter of a billion on deposit with you, in segregated accounts. They only have 5 million? Okay, thanks. BYE.
No, that would be too complicated. Much easier to *mail* the documents to a strange, unlisted PO BOX, instead.....Seriously...And I'm supposed to believe a crew of CPA's who passed the CPA exam, can't figure this out? This is a scam....
This is reminiscent of Madoff who single-handedly forged TENS OF MILLIONS of order tickets, customer and bank account statements, himself!! God knows how he "cleared" all those false trades and reconciled it under the watchful noses of his accountants and regulators who were surely pouring over his books, every quarter, as "per regulation"...?!??! The scariest part about all this is, nobody bats an eye. Nobody has the slightest inkling that none of this shit adds up, in the slightest. The good 'ol SEC is on the case!
As I said, this whole thing stinks.
I do not have an account with PFG, but if I did, I would most certainly look into filing a complaint against the various Regulators and the Futures Exchanges involved with PFG.
From the NFA website - http://www.nfa.futures.org/nfamanual/NFAManual.aspx?RuleID=1003&Section=1
Quote:
NFA'S REGULATORY OPERATIONS
Financial Requirements.
One of the principal functions of NFA is to establish, audit and enforce minimum financial requirements for its FCM, FDM and IB Members and to receive and analyze financial reports from those Members. No such requirements currently are established under NFA rules for other Members of NFA, such as CPOs and CTAs. Under the Joint Audit Agreement, executed between NFA and the various exchanges, the futures exchanges are responsible for financial compliance for exchange-member FCMs, although at the request of an exchange NFA may perform those functions for such FCMs.
End Quote.
Surely ensuring compliance with the various sections stipulating segregated customer funds means not just looking at it on reports submitted by the FCM but independently verifying the funds are actually where they are supposed to be.
Up to the time of the MFG fiasco, I was being actively solicited by a Lind-Waldock broker to open an account with them. Fortunately, I had not taken that step. As I see it, with MFG and PFG, that makes 2 bullets that have missed me. How much more needs to happen before the folks in authority do something about this mess?
I do not have an account with PFG, but if I did, I would most certainly look into filing a complaint against the various Regulators and the Futures Exchanges involved with PFG.
From the NFA website - http://www.nfa.futures.org/nfamanual/NFAManual.aspx?RuleID=1003&Section=1
Quote:
NFA'S REGULATORY OPERATIONS
Financial Requirements.
One of the principal functions of NFA is to establish, audit and enforce minimum financial requirements for its FCM, FDM and IB Members and to receive and analyze financial reports from those Members. No such requirements currently are established under NFA rules for other Members of NFA, such as CPOs and CTAs. Under the Joint Audit Agreement, executed between NFA and the various exchanges, the futures exchanges are responsible for financial compliance for exchange-member FCMs, although at the request of an exchange NFA may perform those functions for such FCMs.
End Quote.
Surely ensuring compliance with the various sections stipulating segregated customer funds means not just looking at it on reports submitted by the FCM but independently verifying the funds are actually where they are supposed to be.
Up to the time of the MFG fiasco, I was being actively solicited by a Lind-Waldock broker to open an account with them. Fortunately, I had not taken that step. As I see it, with MFG and PFG, that makes 2 bullets that have missed me. How much more needs to happen before the folks in authority do something about this mess?
Quote from achilles28:
Glad I'm not the only guy with a bullshit detector.
Look, if a Government Regulator accepts a fucking "PO BOX" as an acceptable address to send crucial regulatory documents - like requests for bank statements - and neither confirms that PO BOX is owned by the bank (..a fucking PO BOX!!!), nor confirms the veracity of those statements over the phone (or fax!), this has scam written all over it. How exactly was the "PO BOX" address provided to the NFA? Obviously, it wasn't provided by US Bank! So what, did the NFA ask Rumpelstiltskin what address they should send the bank documents, too? What are we, in grade fucking 2!?? Last time I checked, every bank account is tied to a specific branch number and transit ID, whereupon a 3 mins search on US banks' website, will give you the exact mailing address, phone number, and fax, to call in to that branch location!! Any one remember funding their brokerage account here??? RrrrrrrringRrrrrrrinng. Hi! This the NFA. One of your largest fucking customers claims to have a quarter of a billion on deposit with you, in segregated accounts. They only have 5 million? Okay, thanks. BYE.
No, that would be too complicated. Much easier to *mail* the documents to a strange, unlisted PO BOX, instead.....Seriously...And I'm supposed to believe a crew of CPA's who passed the CPA exam, can't figure this out? This is a scam....
This is reminiscent of Madoff who single-handedly forged TENS OF MILLIONS of order tickets, customer and bank account statements, himself!! God knows how he "cleared" all those false trades and reconciled it under the watchful noses of his accountants and regulators who were surely pouring over his books, every quarter, as "per regulation"...?!??! The scariest part about all this is, nobody bats an eye. Nobody has the slightest inkling that none of this shit adds up, in the slightest. The good 'ol SEC is on the case!
If you want to open a futures trading account with the $2,000 minimum, you need to fill out a dozen-paged agreement, provide a picture license or passport for proof of id and under no circumstances fund with third-party checks where name on check does not match exactly the name on account.
Three years ago the NFA sent two agents from NYC to my house which is a four-hour drive just to verify it's a real address, I'm a real person and it's safe for me to manage friends & family retail accounts. Two guys, four-plus hour drive to physically verify I am who I hold myself out to be.
Yet this guy could transact nine-figure account bank statements thru a PO Box in a state hundreds of miles from where the company physically resides?
Someone(s), somewhere was getting paid. That ain't a one-man show from end to end. How could it be?
NFA FCM reference link http://www.nfa.futures.org/nfa-compliance/NFA-futures-commission-merchants/index.HTML
Some questions/points I would ask are as follows:
1) Who were PFGâs auditors? Did they not verify the balances either?
2) While many of these FCMâs are private, should it be required that they have audits performed by reputable third party auditors which are in turn made available to clients?
3) Who else at PFG was aware of this scheme? Surely somebody in Operations, Accounting, Finance would have been in daily correspondence with U.S. bank considering over half of the clients funds where there to the tune of $200M plus. Are you telling me these statements were hand provided to the group by Wassendorf himself?
4) What type of work did anybody doing business with PFG ask? As a client you have the right to ask to confirm balances yourself. I would not expect a retail client to do this, but I would expect an IB, CTA, CPO, etc, to do their own proper due diligence. There entites out there claiming they did due diligence obviously they do not know how to perform due diligence either as they would have pressed for confirmations.
Are the Regulators to Blame? The simply answer is no. I think it is really easy to blame the regulatory agencies in this situation. Nobody ever wants regulation and when a fraud happens it is said the regulators did not do their job accurately. What about the frauds they do detect, what about the fines they do hand out? Often times they donât get credit where it is due, but fall on the sword when things go wrong. In a world where a firm can operate in accordance with regulations one day, become fraudulent the next and when the masses complain about any form of regulation I find it tough to throw mud.
So what is the solution to the Seg Problem? My suggestion would be that on a daily basis not only does every FCM have to report their daily seg number to the NFA, but their custodian banks also need to independently report the daily account balance to the NFA. Obviously this needs to be done electronically with a full automated reconciliation performed daily between the two. Sound simple right? How many FCMâs are there? How many bank/custodian accounts do FCMâs have? Do all FCMâs only invest custom assets in cash? What about cash equivalentâs? Do all banks have the means to deliver a file electronically in a secure manner? This solution is achievable, but it does not happen overnight.
1) Who were PFGâs auditors? Did they not verify the balances either?
2) While many of these FCMâs are private, should it be required that they have audits performed by reputable third party auditors which are in turn made available to clients?
3) Who else at PFG was aware of this scheme? Surely somebody in Operations, Accounting, Finance would have been in daily correspondence with U.S. bank considering over half of the clients funds where there to the tune of $200M plus. Are you telling me these statements were hand provided to the group by Wassendorf himself?
4) What type of work did anybody doing business with PFG ask? As a client you have the right to ask to confirm balances yourself. I would not expect a retail client to do this, but I would expect an IB, CTA, CPO, etc, to do their own proper due diligence. There entites out there claiming they did due diligence obviously they do not know how to perform due diligence either as they would have pressed for confirmations.
Are the Regulators to Blame? The simply answer is no. I think it is really easy to blame the regulatory agencies in this situation. Nobody ever wants regulation and when a fraud happens it is said the regulators did not do their job accurately. What about the frauds they do detect, what about the fines they do hand out? Often times they donât get credit where it is due, but fall on the sword when things go wrong. In a world where a firm can operate in accordance with regulations one day, become fraudulent the next and when the masses complain about any form of regulation I find it tough to throw mud.
So what is the solution to the Seg Problem? My suggestion would be that on a daily basis not only does every FCM have to report their daily seg number to the NFA, but their custodian banks also need to independently report the daily account balance to the NFA. Obviously this needs to be done electronically with a full automated reconciliation performed daily between the two. Sound simple right? How many FCMâs are there? How many bank/custodian accounts do FCMâs have? Do all FCMâs only invest custom assets in cash? What about cash equivalentâs? Do all banks have the means to deliver a file electronically in a secure manner? This solution is achievable, but it does not happen overnight.
http://www.nfa.futures.org/NFA-investor-information/PFG.HTML
Russ Wasendorf Sr., the founder and CEO of PFGBest, reportedly attempted to commit suicide this morning outside the corporate headquarters in rural Cedar Falls, company officials confirmed Monday afternoon.
Please make another attempt! but make sure you die this time
On July 9, 2012, NFA made inquiry with U.S. Bank and learned that rather than the $225 million in customer segregated funds that PFG had reported to NFA as being on deposit at U.S. Bank just days earlier, PFG had only approximately $5 million on deposit at U.S. Bank. NFA also learned that, in contrast to purported bank confirmations submitted to NFA that sought to confirm U.S. Bank account balances as of February 2010 and March 2011, that reported balances of approximately $207 million and $218 million, respectively, PFG's actual balances at U.S. Bank at those times were less than $10 million for each one of these months.
Russ Wasendorf Sr., the founder and CEO of PFGBest, reportedly attempted to commit suicide this morning outside the corporate headquarters in rural Cedar Falls, company officials confirmed Monday afternoon.
Please make another attempt! but make sure you die this time
On July 9, 2012, NFA made inquiry with U.S. Bank and learned that rather than the $225 million in customer segregated funds that PFG had reported to NFA as being on deposit at U.S. Bank just days earlier, PFG had only approximately $5 million on deposit at U.S. Bank. NFA also learned that, in contrast to purported bank confirmations submitted to NFA that sought to confirm U.S. Bank account balances as of February 2010 and March 2011, that reported balances of approximately $207 million and $218 million, respectively, PFG's actual balances at U.S. Bank at those times were less than $10 million for each one of these months.