NIBA Journal

Insights, analysis, and updates from the National Introducing Brokers Association

February 1, 2013

NIBA Winter Conference in Southern California Re-Cap

NIBA Winter Conference in Southern California January 24, 2013 I recently had the pleasure of attending the “Winter” NIBA conference in Southern California. I genuinely struggled to type the word “winter” in the title, as the weather greeting participants was a balmy 70 degrees. I’m sure that there was a tussle back in Chicago as to who was going to represent the CME and NFA for this event! Complementing the SoCal weather was the choice of venue, Flemings Prime Steakhouse and Wine Bar. Anyone that knows the brand knows the restaurant’s service is first rate, coupled with great food and wine. We have the CME to thank for that! (NIBA Members attending the SoCal Winter Conference) More impressive than the venue was the subject matter covered. Opening remarks came from NIBA President, John Jensen. He brought up a great point that NIBA’s role for the IB community is not just...

Peregrine CEO Wasendorf Gets Maximum

CEDAR RAPIDS, IOWA — Disgraced financier Russell Wasendorf will be at least 107 years old by the time he’s eligible for release from prison under the 50-year sentence handed down Thursday in Cedar Rapids. The former head of the defunct Peregrine Financial Group futures and commodities brokerage stole $215 million from more than 13,000 customers over a 20-year period. The 64-year-old Marion native pilfered customer funds to live a lavish lifestyle and expand the business, which prosecutors said was never profitable on its own. Investor confidence in the sanctity of the $37 trillion futures market was shaken by details of the scam that were contained in suicide notes discovered after Wasendorf’s botched attempt to take his own life July 9. “This is a very serious offense with staggering affects to the victims and ripple effects,” U.S. District Judge Linda Reade said. “The sentence I impose must be a deterrent to...

By NIBARead article

February 1, 2013

3 min read

The Daily Electronic Confirmation of Customer Segregated Funds

For years, the futures industry had an impeccable reputation for safeguarding customer funds deposited at FCMs. Now, within a very short time frame, we are dealing with a shortfall in customer segregated funds at two FCMs, and their ensuing bankruptcies. Customers at both firms suffered real harm, the type of harm that all regulators attempt to prevent. The MF Global and Peregrine Financial Group customer losses are a painful reminder that regulators must continuously improve our surveillance, audit and fraud detection techniques to keep pace with changing technology and an ever-more-complicated financial marketplace. We know that we can never completely eliminate fraud, but we must continue to adopt rules and surveillance techniques to try to reduce the opportunity for fraud as much as possible. That is why the process of refining and improving regulatory protections is ongoing and constant. After the MF Global bankruptcy, NFA and CME Group in conjunction...

By NIBARead article

February 1, 2013

5 min read

A letter from NFA's CEO and Chairman

January 31, 2013 Dear Members, We wanted to send you a personal update on all that has happened in the months following the collapse of Peregrine Financial Group Inc. (PFG), and let you know that we have taken steps to refine and improve our regulatory practices and better protect you, your customers and the industry in the wake of this tragic situation. As you know, in July 2012, PFG filed for bankruptcy following the attempted suicide of its former president and CEO Russell Wasendorf, Sr., and subsequent discovery that he had defrauded PFG customers by using segregated funds for his personal gain and submitting falsified records to NFA and the Commodity Futures Trading Commission (CFTC). Shortly after we uncovered the PFG fraud, a Special Committee of NFA's public directors commissioned an independent review of our audit practices and procedures by Berkeley Research Group (BRG). As part of the review, BRG...

MF Global clients may get most of their money back

A bankruptcy court is set to consider a plan that would return 93% of MF Global customers' money. That number is an improvement on the 80% that U.S. customers had previously received. Read the full article here. The Opinions expressed are the opinions of the author. The opinions, the trading styles, trading information and trading programs are not endorsed by the NIBA, but are the individual opinions, styles, information and programs of the author.

What Is Link Building and Why Is It Important?

Whether you possess a wealth of knowledge in search engine optimization (SEO) or you’ve just heard about it in passing, you probably know the phrase “link building” and how crucial it is to your website’s success. If you don’t know about link building don’t sweat it, you’re in the right place. In general terms, search engine optimization (SEO) is the process of increasing your website’s visibility in a search engine's (such as Google) un-paid ("organic") search results. Search engines such as Google have algorithms that are applied to websites in order to rank them. The higher your page rank, the higher up your site appears in search results. Page rank algorithms heavily favor sites with many inbound links, especially inbound links from other high ranking sights (like a yahoo.com or cnn.com). (Graphical display of Google Algorithm courtesy Wikipedia) A popular and effective SEO tactic is to increase the number of...

By NIBARead article

January 30, 2013

3 min read

Some Filing Changes - NFA and IRS

In addition to the myriad of tax changes we’re facing as we go into the new year, here’s a reminder that CFTC Reg 4.27 requires all CTA’s to file a Form PR within 45 days of year end. This gives you a filing deadline of February 14, 2013 for the 2012 calendar year. This report must be filed using the NFA’s EasyFile System. Keep in mind that there is a proposal pending that this be expanded to a quarterly filing requirement. Here is the link detailing how to establish an EasyFile account Here is a link to a Form PR template provided by the NFA As we leave 2012 behind, the Bankruptcy Trustee for Peregrine Financial Group has been authorized to make a bulk transfer of approximately $123 million to Vision Financial Markets, LLC . For those of you who have clients or associates involved in PFG’s failure and subsequent...

By NIBARead article

January 30, 2013

3 min read

Technology to Monitor FCM Segregation Requirements

Notice to Members I-13-05 January 30, 2013 Effective Date of Amendments to NFA Financial Requirements Section 4 Regarding Use of Technology to Monitor FCM Segregation Requirements NFA recently amended NFA Financial Requirements Section 4 to require FCMs that hold customer segregated funds under CFTC Regulation 1.20, customer secured amount funds under CFTC Regulation 30.7 or cleared swaps customer collateral under CFTC Regulation 22.2 (collectively "customer segregated funds") to instruct the depositories holding these funds to report the balances in these accounts on a daily basis to a third party designated by NFA. The amendments also provide that a depository must comply with this request in order to be an acceptable depository for customer segregated funds. CME Group, Inc. (CME) has adopted similar requirements for its FCM clearing members. As previously communicated to FCMs, NFA and CME selected AlphaMetrix360, LLC to act as the aggregator of this information. Over the last...

By NIBARead article

January 28, 2013

2 min read

Reminder: CFTC Regulation 4.27: CTA Reporting Requirements

In February 2012, the CFTC issued final rules adopting CFTC Regulation 4.27 which, among other things, requires that all CTAs file a Form PR annual report with NFA within 45 days of the calendar year end. The Form PR requires each CTA to report on an annual basis general information about the CTA, its trading programs, the pool assets directed by the CTA and the identity of the CPOs that operate those pools. NFA has provided the Form PR template. The first annual Form PR report will be due by February 14, 2013 for the year ended December 31, 2012 and must be filed electronically using NFA's EasyFile System, which can be accessed at http://www.nfa.futures.org/NFA-electronic-filings/easyFile-CTA-filers.HTML. In order to access the EasyFile System, the CTA's security manager must set up the necessary security settings. Instructions on how to do that can be found on our website. CTA Members should also be...

By NIBARead article

January 28, 2013

2 min read

Notice of Newly Elected Members to NFA's Board of Directors and 2013 Nominating Committee

This year there were contested elections in the IB and CPO/CTA categories of NFA's Board of Directors. Newly elected Board members in those categories and a complete list of the members of the 2013 Nominating Committee are as follows. Board of Directors IB Representative: Jeffrey D. Malec Chief Executive Officer and Founding Partner Attain Capital Management, LLC CPO/CTA Representatives: James L. Koutoulas Chief Executive Officer Typhon Capital Management, LLC John L. Roe President Roe Capital Management, Inc. 2013 Nominating Committee FCM Category: Bruce Beatus Assistant General Counsel Bank of America Merrill Lynch Chris Damilatis Vice President ADM Investor Services, Inc. Marc Nagel Chief Operating Officer Dorman Trading, LLC IB Category: Michael T. Burke Chief Executive Officer Highground Trading Group Inc. Rodney W. Dow President The Dow Corporation John C. Jensen President Heritage West Financial, Inc. CPO/CTA Category: Robert J. Amedeo Executive Vice President Altegris Portfolio Management, Inc. Anthony T. Gannon...

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