IBs, however, want to see all options considered.
“You hear this talk about going straight to the exchanges and having the exchanges do the clearing,” Marella says. “That’s an option worth considering — everything should be on the table.”
Gallwas, however, says the NFA has been getting a bad rap, and warns against implementing wholesale change.
“Look at 9/11,” he says. “We prevented a repeat by locking the pilot doors, but then we went ahead and implemented all these other changes that arguably don’t make us safer but do make for good show. [Futures has] a system that has worked very well for more than a hundred years, and we need to make changes rationally, not impulsively.”
He does, however, believe that senior management at companies like PFG should be held accountable. “There was a failure to supervise on the part of upper management,” he says. “We need to make it clear that titles mean something — that a compliance officer has culpability, that a chief financial officer has culpability, that anyone responsible for internally policing the organization has culpability.”
Neither CFO Brenda Cuypers nor chief compliance officer Susan O’Meara have been targeted publicly by investigators, but O’Meara was on the receiving end of an email to both herself and the NFA that critics say should have flushed the shortfall into the open more than a year ago (see “Just the fax, ma’am” on the last page).
Even more ire has focused on in-house counsel Rebecca Wing, who proved ruthless at going after IBs that tried to take their business elsewhere but not so good at returning calls, and oblivious to the shenanigans on Wasendorf’s computer. In 2011, she earned $380,220, and in early September was given a $20,000 raise, recommended by Bodenstein, to $400,000 if she stayed on with the company.
“Ms. Wing [has] a wealth of knowledge regarding the debtor’s business and has extensive experience as a commodity/financial services attorney,” wrote Bodenstein in petitioning for the raise.
“We find the request more than a little tone deaf,” answered John Roe, co-founder of the CCC. “It … lacks any structure to pay the increase on the basis of production, which would provide a financial incentive to find and return property that belongs to customers,” he wrote.
Scrutiny also has fallen on Jeannie Veraja-Snelling, who did the financial auditing of PFG from her home.
“Financial auditing is different from regulatory auditing, but it does make sense to have a financial auditor who understands the business,” Roe says.