By Doug L. Bell
Farmers, are your commodity accounts safe? Do you know how the person or firm that holds a large amount of your funds and is a key part of your financial planning and stability is regulated?
You should be concerned — they are a self-regulatory group. The National Futures Association was formed as a non-profit Delaware corporation that is not registered to do business in Iowa. This organization, a membership of commodity brokers, realized a profit of nearly $13 million last year, and built its holdings to almost $68 million while being exempt from taxes. The group paid out salaries of about $35 million to 320 employees. This information is from its website on the NFA’s published financials — www.nfa.futures.org/NFA-about-nfa/index.HTML.
The CEO, Dan Roth, is reported to have received more than $700,000 in salary and compensation while many farmers suffered huge losses from the Peregrine Financial collapse and the MF Global event.
It is apparent the brokers were not following the rules, especially the PFG Best, which was reported to have gone on for almost 20 years. Where were the regulators? They should be held accountable to the public for huge losses suffered by many.
The government agency, Commodity Futures Trade Commission, oversees the National Futures Association. The agency is up for reauthorization before the Congress this next session. You, as the public or farmers, should voice your concern to Iowa senators and Agriculture Committee members Tom Harkin and Chuck Grassley with congressman Bruce Braley.
You also should contact an organization such as the Farm Bureau and tell it you want the industry regulated in a fair and effective way. The regulators should be held responsible to protect the public and ensure your accounts are safe. You have rights in a conflict over a broker’s activity.
I went through the process of a broker not following the industry rules in handling my account. The actions led to my loss of almost $600,000 — life changing. As the person filing the complaint, I cannot see the broker’s version that he gave to the investigator in defense of his illegal activity. The NFA calls that non-public information.
How can his version be held accountable when he knows he can tell the investigator anything, with no other person having the opportunity to review, rebut or discredit his version? This is not a very transparent investigation. This can lead to “protecting their own.”
This is not an effective way to ensure justice for the protection of your funds and financial stability.
Become informed about this issue.
Doug L. Bell is a farmer from Thornton. Comments: firstname.lastname@example.org