PFGBest fallout explained by professional Forex trading experts the “PFGBest fallout” FX trading team.
CFTC calls for an emergency meeting. Reuters reports that the CFTC’s technology committee has called for an emergency meeting on July 26, primarily to discuss how technology can boost customer protection. It turns out that the CFTC relied mainly on (real) paper trails and (real) mail to confirm supposedly segregated customer balances at PFGBest and other brokers. Those snail-mails were apparently intercepted and doctored by Wasendorf, perpetuating the fraud for nearly two decades.
Calls for resignation of CFTC Chairman Gary Gensler to resign. CFTCLaw.com reports that Senator Jerry Moran, a Kansas Republican, called for the resignation of Gary Gensler, Chairman of the CFTC. Moran accused Gensler and the CFTC of being “asleep at the switch” during the crisis, “more preoccupied with his Dodd-Frank Act power grab than with his core responsibilities.” Meanwhile, we understand that certain groups of ex-PFGBest clients are looking to recover their lost deposits via a joint lawsuit against the CFTC, with the basic claim being the CFTC’s gross negligence in not manually checking actual bank balances for so long a time at one of the US’s largest futures brokers.
PFGBest’s auditor. In what should have been another red flag for regulators, the NY Times reports that PFGBest’s auditor was a one-person shop run out of the accountant’s home in Glendale Heights, Ill., a Chicago suburb. As part of its investigation, the CFTC is looking into the role that the individual may have played.
Who knew what? Although PFGBest founder Russell Wasendorf Sr.’s suicide note made it clear that he was the only one involved in the fraud, and the only one who even knew about it, investigators will unlikely be convinced of that without a thorough, and likely quick, investigation.
What can clients expect to recover? DailyFinance reports that investment firm CRT Capital has already swooped in and offered to buy up customer claims from PFGBest victims for 20 to 25 cents on the dollar. If nothing else, this is a sign that CRT is pessimistically handicapping the outcome of the Peregrine customer recoveries — the lowest price CRT paid for MF Global claims was 60 cents on the dollar.
PFGBest fallout Conclusion
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