Vision will pay a $1.5 million fine in addition to the $2.053 million in restitution it paid to customers on March 15, 2014. Vision was also ordered to withdraw from NFA membership six months from today’s decision.
NFA's Board anticipates that the fee reduction may be sustainable for a few years. However, a change in trading volume could either shorten or lengthen the amount of time that this fee can be maintained.
2013 was a year of anticipation and perhaps disappointment. For those hoping the 2012 election would have settled some of the dysfunction in Washington, that did not happen. In fact, we doubled down on fights already settled as if there were no new business. Equity markets impressed, but few saw it as anything other than the hand of the Fed. Mercifully, the Fed signaled the beginning of the end of QE3 by year-end.
What was clear is that more than three years after the Dodd-Frank Act was passed and with many deadlines missed and more deadlines on the horizon there is a massive amount of confusion regarding how these products are to be regulated.
As we are all well aware, the last two years have been the most challenging for the futures industry in the almost 80 years the two of us, collectively, have been in the business. The collapse of MF Global and the uncovering of the Peregrine Financial Group (PFG) fraud brought about the questioning of systems and procedures believed to be safe
The complaint points out that Vision “has had a long history of supervisory issues during its tenure as an NFA Member,” and notes that it has been the subject of four prior NFA Complaints – three of which charged the firm with failing to diligently supervise various aspects of the firm’s operations.
The respondents in this complaint could face expulsion or suspension for a specified period from NFA membership; bar or suspension for a specified period from association with an NFA Member; censure or reprimand or a monetary fine not to exceed $250,000 for each violation found.
I was introduced to Vision’s aggressive strategy for raising assets for options writing CTAs nearly a decade ago. Justin Boshnack, son of Vision founder Bob Boshnack (who currently has no administrative responsibilities) had called me to pitch a story on the success of Vision’s brokers. He told me that many of their brokers were making in excess of $1 million a year by raising assets for various CTAs. I was at Futures Magazine at the time and I recall thinking that he did not understand the nature of our publication.
Futures covers all things related to the futures industry but a story on successful asset raising absent any context of a trading strategy is something we didn’t do. The younger Boshnack was bragging about how much money their brokers were making as if we were some internal broker newsletter. There was no mention of whether the investments they were selling was making any money for customers. None. I recall thinking, ‘if we did do a story on this it wouldn’t be positive.’
Shortly later a CTA who I had profiled recently had sent me some disturbing offering documents from Vision. The CTA was also an introducing broker (IB) and the documents were touting excessive upfront fees an IB could charge by raising assets for ACE and Yu-analysis I did on ACE came to 25.60%. No one is that good.