First MFG(lobal), Now PFG: Who Is Next?

First MFG(lobal), Now PFG: Who Is Next?

It seems the murky world of segregated accounts and FCMs is coming under the right amount of scrutiny once again. Atlas Ratings – who provide detailed ratings analysis on the entire spectrum of FCMs – had identified PFG Best in the bottom 5% of all FCMs (but with 4 other firms ranking lower on their proprietary rating scale – see below). As they note, almost across the board, PFG Best lagged dramatically in most categories. The only category where they did not have low marks was in regard to exchange penalties. The commodity exchanges had not penalized PFG very often for their clearing procedures or floor record-keeping, that much was done adequately within the company. Everything else we monitor showed weakness within the company:

  • Their net capital ratio and the trend of that ratio was extremely weak.
  • Their business is not diversified, they rely on minimal interest revenue, commissions and any proprietary trading.
  • Customer assets growth has been weak, healthy companies attract and retain new accounts.
  • PFG Best has had many CFTC & NFA penalties, these are major red flags. They failed to ID a massive ponzi scheme.

The big question – obviously – is who is next? The following table provides some clear indications of where the stress may just explode next.

20120709_FCM1_0.png

20120709_FCM2_0.png

20120709_FCM3_0.png

20120709_FCM4_0.png

20120709_FCM5_0_0.png

It would seem account holders at Pioneer Futures, Rosenthal Collins Group, Crossland, Forex Capital Markets, and Velocity Futures should be checking in on those funds?

Source: Atlas Ratings

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