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The PFGBest Scandal: Who’s at Fault?

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  • Description

    John Person of NationalFutures.com discusses the PFGBest scandal and how the firm fell apart.

  • Duration 4:11
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Eight and the markets returns John person is president of national futures dot com and John we thank you for joining us.

This afternoon for saving -- cents set.

See you had money you're money's reporting with MF global and with -- best he can you give us a sense how much you've lost or how much is kind of hanging in the balance.

Well first off MF global they've been trying to make arrangements to get investors whole again there were still missing around 28% of the the balance there.

But PSG and this is just another.

I mean I don't think a lot of it's it's not a as far as.

The professional traders.

They were mostly a small speculator outfit so I think what it is the small speculators the general public confidence in the amount of the accounts.

That are lost to this.

Is going to end up both from and he has speculator aspect of more of a confidence this is one more nail in the coffin as -- wide to come to trade commodities.

You understand a lack of confidence when you read the unfolding story of Russell walks in the -- senior right he was supposedly part of -- advisory committee upbeat and that today.

The NFA itself was supposed to be overseen.

By the CFTC.

And lawmakers have called war against players.

Resignation because of this whole mess what what do you about must be infuriating after reports in your mouth but what we're adding that what what happened how to get -- Partner you.

You know it almost seems like the foxes watching the hen house he's on an the NF -- future commission -- -- Advisory board.

And hearing knows the inside rules and how to get around some of the regulatory.

Issues like he was component of of not having electronic statements.

That's how we was able to get away with.

Falsifying documents.

In being on the Vienna based board I think this is one of the things that we really have to take a look at.

Where was the CFTC where was the NFA and why do they have certain rules in place not to safeguard or simply say.

Give us a phone number we want to see the money.

Let's safeguard the money they should've been done immediately after MF global customize writes -- as this CFTC then.

Rely too much on the national futures association.

You know I think there's two sides of this issue first off there's been a lot of budgetary cuts and and I think got a both sides of the -- the defense will say.

We're all we have too many products to regulate and were understaffed and underfunded.

But -- -- we get debt but at the very least the core of everything you the markets are hard to trade.

People put their faith in the markets -- Chicago Mercantile Exchange one of the oldest exchange in the United States still surviving.

And here we have established great markets great transparency is great access for people to trade.

But they want their money out when they make money they -- -- in their accounts and then it's up to the CFTC and the at a date to make -- simple spot check.

Is the money in those bank accounts and is the money separated at customer funds from the firm -- I mean that's really the crux of it also.

Do you have any solution right -- Yes real simple let's make the rules that you don't touch customer segregated funds and that needs to be addressed immediately.

Director John just made sense in our remaining time here.

How year pulling it all together and where you're going from here what your next steps -- you have to be yakking conversations with your clients.

Sure I think a lot of people are very dissuaded some people that were at MF global they did go to PF -- there are other fine.

-- CME's clearing member firms that are oversight -- overseen by the Chicago Mercantile Exchange to still use and I don't think that every one that's looking to trade in the market will walk away but if you're working capital is being held up by both MF global and then it's going to be hard to get back into the game.

I think that right now there are still a lot of clearing firms out there and number one ask.

How are you regulated who's the overseer and where's the money helps these other things as well as opening accounts with maybe.

Put stock brokerage firms that can handle -- it date of the future side of the business yeah I gotta watch out for yourself great.

Questions you should ask as as a customer trader thank you so much John person.

Appreciate it thank you very much a -- Obama.

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