PFG freezes accounts, CEO attempts suicide

Quote from logic_man:

You make a good point about internal controls and the likelihood that at least the PFG CFO was aware, but would US Bank really know what PFG was filing with the CFTC as its balances?
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Yes, they would. Not only that, but their account manager at the bank would have access to PFG's account history, and would see in 2011, for example, PFG customer deposit account was 250 mill, or whatever. And then, in 2012, it was run down under 5 million. Red-flag?


Quote from logic_man:

Was the NFA staffed sufficiently to check up on every custodial bank address submitted to it?
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Buddy, come on. This would take all of 1 week by an intern. Look at the Atlas list on zerohedge. There's 117 brokers there. Ring-ring, hi, do u hold an address at PO BOX 1234? No, we don't. Thanks bye.


Quote from logic_man:

Maybe US Bank did check those filings and maybe the NFA did have enough staff to follow up on every piece of information each member submitted, but no one here knows for sure.
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It's the CFTC's job to play watchdog to these guys. The CFTC has a budget of a quarter of a billion dollars per year. They're entire mandate is to prevent broker thefts, just like this! That's what they're supposed to do!!! CHECK THIS STUFF.


Quote from logic_man:

We will all know in time, though. Obviously, for a scam running into the hundreds of millions of dollars, there will be more than enough willing participants.
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Now you're talking. See the reuters article? PFG's "auditor"? Some little shithead running out of his 90K house. This is what I'm talking about. A scam like this can't be run without 5-6-7-8-9 people. The paperwork is astronomical and the regulations pile up. Everything has to be checked, rechecked, signed off on, etc etc. That's why the lone wolf Madoff story is a complete joke. Not only did that require at least 7 or 8 inside people, but proves the SEC was totally corrupt and let most of them go! Look at Corzine, for fucks sakes. That guy lost, what? 2.2 Billion from segregated funds? And not a single person was indicted!!
 
Here's a good way to summarize the current regulation problem. Is anyone scared anymore when the CFTC or SEC comes in to audit them? The answer is no because they are god awful at doing their job. Doesn't matter how much money they have because the people are either lazy, incapable of doing proper audits, or have no idea what to look for because they were never in the industry to begin with. Until people actually have any respect for regulators being capable of doing their job, can always expect things like this to happen.
 
Also let's not forget who actually committed the crime. I am shocked that people are not calling for his head along with the employees of the firms heads who had tomhave been complicent in the fraud. Either the son, CFO, various other operational staff were in on this or they were 10000 percent dumber than any of the regulators. There is no way ws was in charge of daily transfer to and from us bank to meet client redemptions and sweep excess cash. Nor was there anyway he was the one preparing and sending the seg report. With that said, wouldn't even the ,ost junior person look at the balance sheet and say, wait a minute we don't have 250m at us bank!!! Unless of course wasendorf sr also hand delivered the f'ing accounting department statements too and they didn't have online access which is highly unlikely.
 
Singling out a single perpetrator is exactly what Wasendorf and crew want. After his recent marriage, his spouse can be protected somewhat by financial law from bankruptcy proceedings and clawbacks for customer money.

Never mind that the CFO never had a cpa and was for 12 years "responsible for account balancing and producing a daily segregated funds report. After that she served as Controller of the firm for six years."

http://www.pfgbest.com/about/brendacuypers.asp
http://www.pfgbest.com/about/press/brendaCuypers.asp

outside gov't TARP auditors that much better than PFG staff at finding discrepancies? ...right..


Or the "shithead" personal auditor in the suburbs is some woman when caught by the reporters said she "just found out about it." and didn't know "anything".

http://www.reuters.com/article/2012/07/12/us-broker-pfgbest-auditor-idUSBRE86B02N20120712
 
LOL

"U.S. futures industry investigators are looking into why Iowa-based collapsed brokerage PFGBest used a tiny accounting firm that appears to be operating from inside a suburban Chicago home to audit its books, according to a person familiar with the matter.

Experts said the use of such an auditor should have been a red flag to regulators of a futures brokerage with more than $500 million in assets and several hundred employees across the United States as well as in Shanghai and Canada.

There are comparisons with the way convicted Ponzi schemer Bernard Madoff used an auditor operating out of a strip mall in suburban New York and convicted swindler Allen Stanford's investment firm retained a little-known auditor on the Caribbean island of Antigua.
http://www.reuters.com/article/2012/07/12/us-broker-pfgbest-auditor-idUSBRE86B02N20120712
 
With respect to to mf global, why has nobody pointed a finger at the cme? They had more onerous responsibility with respect to oversight than the cftc.

Fraud can always be perpetrated and it is generally caught, I think it is naive to think regulation can happen in real time. And by the way, a 250m cftc budget is hardly enough to implement the Dodd frank act which was thought up by morons who have zero, zero knowledge of the markets or regulatory environment. stop thinking so short sighted people, the problem is at the top, just like the majority of you, these people only know and do as they are told.
 
^The problem is regulators are bought and paid for by the industry they're charged to regulate! Wallstreet writes their own rules!

Note: for the idiots in the thread that say the NFA couldn't call US Bank directly and verify PFG's account balance due to "privacy" concerns....that's exactly what the compliance documents they sent via the mail, empowered them to do!!!!!! COLLECT PFG ACCOUNT BALANCES FROM US BANK. They do it over the phone, or through mail! It makes no difference! They're getting the same information, from US BANK DIRECTLY.
 
Offer regulators significant bonuses, such as percentage of fraud uncovered or penalties imposed, and see how regulation changes. People will be taking there job more seriously and you will attract talent to the industry. The sec's whistle blowing scheme provides upside of employees or anybody of the general public to provide tips to the sec. Yet I'd a regulator where to uncover a fraud, or hand down violations with respect to lack of controls that could lead to a fraud, they are not compensated. People need incentive to do there job.
 
Bonuses for the regulators? In this environment?
They should all be put on notice, and if they do not perform exceptionally, their jobs should be advertised.
What amazes me is how a large minority of the US lives in a bubble. This needs to be well and truly burst. There are plenty of unemployed people that could do a better job at the regulators.
 
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