The futures industry was recently rocked by the revelation that, once more, the sanctity of segregated accounts had been violated, resulting in over $200 million in missing client funds. While one would hope this was an isolated tragedy, it appears to be part of a larger trend. Segregated fund scandals at Sentinel, MFGlobal, and, most recently, PFGBest, have all occurred under the reign of one of the chief U.S. futures market regulators- the National Futures Association, or NFA.
The reports that have emerged in the wake of this catastrophe paint a frightening picture- one where red flags were ignored, facilitating 20 years of fraud. There have been additional stories told since then that bring up concerns of further incompetence, negligence, and willful ignorance of the problems developing.
The short-comings of these regulators should be unacceptable to anyone who has fallen victim to these crimes, but it should also be of concern to all investors and citizens. Faith in the futures markets is critical to maintaining investor participation, and that participation helps to hedge against sharp moves that can drive up consumer prices- a risk that a fragile global economy simply cannot take. If investors cannot trust those minding the till, that is the exact risk we take.
But in its simplest form, this is about the fact that we deserve more from our regulators.
This our formal call for the CFTC and Congress to launch a thorough investigation into the practices, policies and people of the National Futures Association in order to determine the extent of their culpability in these oversights and highlight the actions necessary to restore public faith in regulation of the U.S. futures markets, including, if necessary, the revocation of their charter.
If you believe that the NFA does a generally ok job, and that the recent scandals are simply unfortunate, isolated incidents, do nothing at this time. If you think the PFG scandal and NFA’s role therein is representative of bigger problems within the NFA, or have experienced incompetence by NFA staff and leadership yourself, sign this petition and help us make changes.
We will leave you with words from Pulitzer Prize winner Eudora Welty:
“Integrity can be neither lost nor concealed nor faked nor quenched nor artificially come by nor outlived, nor, I believe, in the long run, denied.”
Now is the time to demand integrity from our regulators.
Additional Reading- Vote of No Confidence: A Call to Investigate the National Futures Association