Home / News / Business news / Broker accounts frozen; wrongdoing suspected

Broker accounts frozen; wrongdoing suspected

Jeff Caldwell 07/10/2012 @ 11:12am Multimedia Editor for Agriculture.com and Successful Farming magazine.

Months ago, MF Global's demise, after which it was learned the firm had commingled and later lost investors' funds, shook the grain markets. Now, another firm's seemingly in the same boat.

Reports show PFGBest, a trading firm based in Cedar Falls, Iowa, has watched as federal regulators froze its customers' accounts after the news broke that the firm's CEO had allegedly attempted suicide. Russell Wasendorf, a Marion, Iowa, native, was taken to the University of Iowa hospital in Iowa City, Iowa, and was in critical condition after the alleged suicide attempt, reports show.

Though the dollar volume in question with PFGBest (an alleged $220 million) isn't near what it was in the MF Global situation ($1.2 billion), sources say the news could have both short- and long-term ripples in the trade.

"PFG Best is giving the market a minor jolt this morning with reports of an attempted suicide by the CEO," says Agriculture.com Market Analyst, Marketing Talk veteran contributor and floor trader in Chicago, Scott Shellady.

Longer-term, this instance could do more to shake farmers' confidence in a system that was already on shaky ground after the MF Global situation unfolded late last year, says Iowa Republican Senator Charles Grassley.

"From a systemic standpoint, the question is whether there is effective oversight in our commodity trading system. People need to have confidence in our commodity trading system in order for it to work for farmers and investors the way it’s intended," Grassley said Tuesday morning. "I want to know if the existing set up with the National Futures Association and the Commodity Futures Trade Association is working to safeguard this marketplace. Regulators need to be on the ground working diligently to sort out what's going on, and I would expect the Senate Agriculture Committee to look into this matter in the same way it continues looking into MF Global.”

Farmers speculate the PFGBest situation may be tied to larger issues, ones that indeed cause some to question whether their money and grain is safe in the marketplace.

"Reading the company history, I wonder if our new 'techie' trading with its speed doesn't let these shell games get farther along before detection," says Agriculture.com Marketing Talk senior contributor sw363535.

Adds Marketing Talk contributor tom s. in tn.: And this is a perfect example of exactly why deregulated greed will lead to the markets own failure and demise. No one mature enough around to operate on common sense any more."

   

CancelPost Comment
MORE FROM JEFF CALDWELL more +

Drought's Assault Continues in… By: 07/24/2014 @ 9:06am Though it hasn't rained in parts of corn and soybean country in a few weeks, the drought has…

Malaysian Airliner Crash in Ukraine Sends… By: 07/17/2014 @ 2:34pm Wheat futures took off Thursday afternoon to close double-digits higher after news that officials…

Wheat Takes The Reins To Trade Sharply By: 07/17/2014 @ 1:13pm The bouncing around continues in the grain markets, with a quick, sharp turnaround in the wheat…

MEDIA CENTERmore +
This container should display a .swf file. If not, you may need to upgrade your Flash player.
Soybeans Rally on Demand, Weather