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"PFG Isn't The First Huge NFA Auditing "Oversight" - Ann Barnhardt

Posted by Ann Barnhardt - July 11, AD 2012 2:16 PM MST
So you think that PFGBest is the first time that the NFA has inexplicably "missed" hundreds of millions of dollars from a non-clearing FCM that they had under their auditing auspices?

Oh, you would be very, very wrong. Let me tell you the tale of Sentinel Management Group, a non-clearing FCM that operated as a hedge fund for other FCMs, that was a Ponzi scheme which when it finally collapsed in 2007, was "missing" $500 million.

The NFA's own report on Sentinel, for which the NFA was the auditing body, found:

"Sentinel failed to maintain adequate books and records, including records to demonstrate the location" of some accounts.

Huh. How is that possible, given that the NFA auditors had signed off on every audit ever performed of Sentinel, since the NFA was itself the auditing body?

Apparently, just as with PFGBest, the NFA was grossly, grossly negligent in its due diligence - almost certainly intentionally - and then mid-level robosigners who were neither competent nor possessing any real knowledge of Sentinel's books were told to sign off on the Sentinel audits.

Anecdotally, I have been told by someone familiar with the situation that when the investing FCMs who had their money stolen by Sentinel pressed the NFA to explain how they could have possibly missed half a billion dollars in missing funds, the NFA's reply was that they didn't really understand the complexities of the documentation and investments that they were shown, and thus just signed off on the audit trusting that everything was okay.

(read the rest at the URL)

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Also Ann Barnhardt Alleges That Affirmative Action Workers...

...were hired so the blame could be pinned on them (in other words, it would be presented as if the affirmative action workers were incompetent and that's why PFG Best passed the audit).

Apparently some PFG customers were transferred from MF Global

Twice in 9 months for these people.

"It's Like I'm Psychotic or Psychic or Somethin'" -Ann Barnhardt


Posted by Ann Barnhardt - July 9, AD 2012 11:22 PM MST
Uh, so do you believe me now?

When I said, "Get the hell out," do you understand that I meant to GET. THE. HELL. OUT.?

When I wrote in my Going Galt Letter that the problem was SYSTEMIC, do you now understand that I wasn't just typing big, fancy words so that I could hear the soft pitter-pat of my keyboard?

When I said over and over again in interview after interview that the so-called regulatory system overseeing the futures industry was no such thing, but rather an evil, despicable mafia, administered by politicking psychopaths on the take, and staffed by affirmative action hires to provide plausible deniability and scapegoats, WERE YOU NOT LISTENING?

How did I see this coming? How could I NOT see this coming?

PFGBest, which used to be the old Alaron Trading, has stolen at least $220 million of customer funds, which is fully HALF the entire customer asset base. The firm's owner attempted suicide this morning in the parking lot outside of the corporate HQ in Iowa.

While claiming to have over $200 million in bank accounts, it turned out that PFGBest only had $10 million at most. And they had been short NINETY-FIVE PERCENT of their seg funds for at least five months, and it may be closer to two years. The reportage on the timelines is very fuzzy.

Alright. Here's where we call bullshit. Action item number one for any auditor is the independent confirmation of bank account balances. When little tiny me was audited both by the regulators AND for my annual Sarbanes-Oxley audit done by a local accounting firm, the first thing I had to do was sign the balance confirmation requests that the auditors then sent to Wells Fargo. This is the fundamental purpose of an audit. Make absolutely sure the flipping money is where they say it is.

What this PFGBest situation tells us is that the auditors were NOT independently verifying the bank account balances and were instead using internal, falsified, forged documentation provided not by the bank, but by the firm itself.

Oversight by the auditors? Mistake by the regulators? Oopsie? No flipping way, Jack.

Try: Premeditated fraud. Try: Conspiracy. Try: Full knowledge, complicity and cooperation by the regulators in covering the stolen customer funds, and all within mere WEEKS of MFGlobal.

(read the rest at the URL)

"I Have Info For Anyone Who Wants to Sue the NFA" -Ann Barnhardt


Posted by Ann Barnhardt - July 10, AD 2012 4:59 PM MST
The National Futures Association needs to be sued into the ground by all of the PFGBest customers, as well as many of the NFA employees PERSONALLY.

In 2010 I was audited by the NFA, which is a bi-annual (every two years) occurrence for Independent Introducing Brokers. The NFA tried to tell me that a commercial hedge broker could not execute more than one round-turn per client per cash inventory cycle.

Yes, I kid you not. They actually tried to make that argument. As in a feedlot or rancher who is hedged with short futures and has a big open profit on the hedge MAY NOT exit that short futures and buy puts in order to manage that position. Or, if a hedger has an option position that has a big open profit, the hedger may NOT roll that option position into a different strike price in order to capture equity and protect against time value erosion.

The NFA actually tried to argue that it is against the law for a hedge broker to transact more than one round-turn per cash commodity inventory cycle. Again, I can't make this crap up. I have all of their stunningly ignorant letters to prove all of this.

(read the rest at the URL)