It’s full steam ahead for the CFTC, sending a CTA to prison for lying to customers. Yes you heard it right; the CFTC is holding someone accountable for wrongdoing in the industry. Upon reading the press release, we were shocked to gain knowledge that Josh Wallace of System Capital had misrepresented to clients the company’s wealth of prior experience in trading futures, accumulating $29 Million assets under management.
After an audit by the CFTC, they discovered there wasn’t much experience for Mr. Wallace to go by. CFTC went after Wallace to the full letter of the law, resulting with the quest to revoke registrations for Mr. Wallace and a 27 month prison sentence for committing criminal commodity fraud.
This is exactly what the CFTC should have their focus on. In the last two months, the CFTC has filed charges against U.S. bank over the PFG Fraud, filing civil charges against Corzine in the MF Global scandal, and now throwing a CTA in prison for fraud.
While it only took them almost two years to get their act together on the two biggest scandals in the managed futures history, we are left scratching our heads as to how and why they were able to successfully convict a CTA for inventing a history of prior experience, and yet unable to find and build a criminal case again Corzine. If you were to ask anyone in the industry, it would not be difficult to discover evidence of how Corzine violated a portion of the Commodity Exchange Act. Yet it took federal investigators two years to announcement there will be no criminal charges against him?
Congrats, CFTC! We’re glad you caught this guy, and you pursued him. These instances are true attempts at restoring confidence in the system, because what’s the point of rules and regulations, if nobody is held accountable? Now if only you could one up yourself, and reconsider criminal charges against Corzine…. We can only hope.