ACE and Chang charged by NFA with misappropriating $2.1 million

February 1, 2014 06:27 AM
Blog first appeared in DanCollinsReport on Sept. 24, 2013

Earlier this month the National Futures Association issued a complaint against Vision Financial Markets and two of its associated persons regarding Vision’s ongoing relationship with ACE Investment Strategists and its owner Yu-Dee Chang. I noted this and shared a story of how I got introduced to Vision's aggressive marketing of ACE.

The NFA filed a complaint against ACE and Chang at the same time but I failed to link that filing in my story. Frankly, given the details in the Vision complaint I thought the NFA may have been working with other entities in its case against ACE and Chang. I apologize for the oversight but it only makes the fact that ACE and Chang were sending out marketing material last week encouraging introducing brokers to raise money for them even more brazen.

ACE Complaint

The NFA charged ACE and Chang with converting customers' property; failing to observe high standards of commercial honor and just and equitable principles of trade; presenting the performance of accounts - whose performance differed materially - in the same composite performance capsule; and failing to maintain required books and records. The Complaint also charged Ace and Chang with failing to supervise.

The complaint charges ACE and Chang with misappropriating net trade break credits and unallocated cash residuals, “which rightfully belonged to customers,” to the tune of $2.1 million.

Last week I attended the National Introducing Brokers Association (NIBA)  and CTA Expo conferences in Chicago, where I received a lot of encouragement over my reporting on the charges against Vision and of my retelling of the story of ACE that I originally reported on in 2004-05. A lot of IBs were pitched on raising money for ACE and most refused to put customers in a product with such a high hurdle to overcome for them to make any money. And most know of the regulatory history of Vision.

Today I just posted a blog on some of the concerns I heard from industry participants at those events over new rules proposed by the Commodity Futures Trading Commission.

We noted here in the past that many of the problems in recent years have been the result of a failure to enforce existing rules rather than a lack of regulatory authority. Vision has been cited by the NFA five times and by exchanges 14 times but not by the CFTC despite 170 reparation cases being filed since 1990.



About the Author

Editor-in-Chief of Modern Trader, Daniel Collins is a 25-year veteran of the futures industry having worked on the trading floors of both the Chicago Board of Trade and Chicago Mercantile Exchange.