MF Global Customer Representative: PFG Situation Proves The Retail Futures Industry Is In Disrepair | Business Insider
This article originally appeared in Business Insider.
Rob Wile | Jul. 10, 2012, 10:54 AM
We’ve been reporting since yesterday on the unfortunate, disturbing situation at Peregrine Financial Group, the Iowa-based investment firm that’s been charged with misrepresenting customer account shortfalls on the order of $200 million and whose CEO was hospitalized after apparently attempting suicide.
In an interview with Business Insider, John Roe, a Chicago-based futures broker who’s representing 8,000 MF Global customers to retrieve missing funds, says “if you had the opinion that the futures industry wasn’t in need of serious reform after MF Global,” this latest incident seals the deal.
As recently as January, the CFTC conducted an industry-wide audit of futures commission merchants — which would have included PFG, Roe says — and found none to be in material breach.
If that was the case, he says, “then what good are customer-segregated regulations?”
Roe is advocating for industry-wide implementation of account insurance across the futures trading industry. Investors would pay one penny per contract into a national liquidity facility, and in return would be able to recoup funds in the event of an apparent meltdown of customer-segregated funds.
Finally, Roe said he is all the more troubled by the situation given he is an acquaintance of PFG CEO Russ Wasendorf’s son, Russ Jr. Roe said Wasendorf Jr. had been a very forceful advocate of reform in the wake of MF Global.
Indeed, we previously reported Wasendorf Sr. himself had been interviewed by PBS in the wake of MF Global’s collapse calling for change.
Read more: http://www.businessinsider.com/mf-global-customer-rep-pfg-confirms-futures-industry-in-disrepair-2012-7#ixzz296vPcwFj