Home Indiana Agriculture News Agency Reviews Didn’t Uncover Peregrine Fraud

Agency Reviews Didn’t Uncover Peregrine Fraud

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A list of Commodity Futures Trading Commission reviews shows that operations at Peregrine Financial Group Inc. were reviewed in 2007 and 2008 without detecting the fraud that resulted in the future’s brokers collapse and a 200-million dollar shortfall in customer funds. The records or procedures evaluated are not detailed. A review in 2011 was scheduled to oversee compliance with foreign exchange regulations – but due to limited resources – was not conducted. CFTC Chairman Gary Gensler told the Senate Agriculture Committee Tuesday that the full facts of what happened are not yet known – but the system failed to protect Peregrine’s customers. Noting that market regulators can’t prevent all financial fraud – he admitted they must all do better. According to Gensler – the agency will review the documents from 2007 and 2008 to see how to improve.

Gensler also told the committee that – partly due to an inadequate budget – the CFTC relies on industry-funded self-regulators like the National Futures Association and CME to conduct routine oversight of futures firms. He called them the front-line regulators and explained that the CFTC oversees them. He said they need to review the relationship to make sure the CFTC is doing things right when examining the examiners. Gensler told Ag Committee members that CFTC will review NFA’s self-regulatory responsibilities. Iowa Senator Tom Harkin said he is losing faith in self-regulation unless there is adequate, tight oversight by the agencies Congress funds.

bility to rapid and unforeseen changes in the price of oil that can negatively impact readiness, while also increasing energy security.

 

Source: NAFB News Service