The letter points out that the activity it was sanctioned for — the handling of cash residuals and trade break credits from trades resulting from bunched orders that Vision received for clearing from Ace — was discontinued two years prior to charges being filed.
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.
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.
In what only can be described as an act of supreme chutzpah or proof that Chang had become completely separated from reality; he then sent out a marketing letter to brokers encouraging them to raise assets for ACE.