Scrutinize Regulatory System for Commodity Brokers

In the wake of PFGBest in Cedar Falls filing for Chapter 7 bankruptcy with $215 million in customer funds missing, the public needs to know if the existing set up with the National Futures Association and the Commodity Futures Trading Commission (CFTC) is working to safeguard the marketplace.

Tomorrow morning, I will ask CFTC Chairman Gary Gensler questions about what concerns were identified regarding PFGBest and how they were handled when he testifies before the Senate Agriculture Committee, just as I questioned the CFTC after MF Global’s broker-dealer unit collapsed last year.

The CFTC is responsible for regulating commodity markets, and the Agriculture Committee has legislative and oversight responsibility for the CFTC.

Congressional oversight is an important means for figuring out if the regulators are doing their jobs, or not.  If people can’t have confidence in the commodity trading system, the system won’t work as intended for farmers and investors.

Monday, July 16, 2012