I have been quite disappointed with the performance of the authorizing committees of the Commodity Futures Trading Commission (CFTC) after bankruptcy of the introducing broker OptionSellers and the absolving of the clearing firm INT FCStone of any blame.
Anyone who knows anything about the operation of the futures market knows that the integrity of these clearing firms is what makes the markets work. The House and Senate Agriculture Committees have at stake their jurisdiction over this field of law. If they don’t use it they should let other committees have it. Maybe it should go to the committees with oversight responsibility for the SEC.
They should call the current Chairman Heath Tarbert to come before their Committees. The questionable activities took place during the term of his predecessor Chairman Giancarlo, who is now a Washington lawyer and lobbyist.
I know how the CFTC was started because I was the young Senate lawyer who drafted the law to establish the CFTC in 1974. I have the documents to prove it. Unfortunately, I have the documents to prove the huge loss I took when OptionSellers went under in the second week of November 2018.
To me it is inexplicable that a few years before, in 2013, the CFTC fined the clearing firm INT FCStone $1.5 million and forced them to absorb $127 million in losses. This time they allowed this firm to charge innocent investors like me for the losses. I would be happy to testify before the House and Senate Agriculture Committees.
The only Federal agency that has expressed any interest in trying to help me is the FBI, Department of Justice. I received a letter from the Victim Specialist stating that she understood I was a victim of a financial crime. A copy is included in my little book “The Worst Financial Scandals of the Last Twenty Years: From Madoff to the Coverup of the OptionSellers/INT FCStone Scandal”.
This little book is available for $6.99 in print or free as a Kindle book.
Michael R. McLeod
I continue to be shocked by the anti Semitic violence that occurs in our nation. The news is full of this on this day, December 29, 2019 in New York. I still vividly recall what happened in a Pittsburgh Synagogue on October 28,2018 when 11 elderly Jewish victims were murdered.
I have known several admirable Jews, such Leo Melamed of Chicago, the founder of the Commodity Mercantile Exchange. He was a little Jewish kid in Poland when his parents took him on the trans Siberian railroad to Japan, where they took a ship to America.
I spent an hour talking to Leo two years ago when I went to Chicago to race up the 94 floors of the Hancock Building. He seemed quite surprised that I remembered everything in his book “Escape to the Futures." I responded by saying “How could I not remember?“
On a personal level, a Jewish couple, the Hirsch family in Alexandria, VA, have been our closest personal friends for years. Our two boys played together almost every day. We would share a Thanksgiving dinner every year. I would propose a toast to the family patriarch General Hirsch because he is the only person I ever met who fought for his country in three wars, World War II, the Korean War, and the War in Vietnam. After his retirement he taught in the War College. When I proposed the toast, he just said, “I didn’t do anything anyone else wouldn’t do.”
I attended the funeral of the Brigadier General Hirsch. It was the most impressive funeral I have ever been to, with the horse with no rider, and the integration of Jewish custom and military tradition .
Michael R. McLeod
In dealing with the coverup of the OptionSellers/INT FCStone financial scandal, I am reminded of the Watergate Scandal that brought President Richard Nixon down. Nixon was a good progressive President. He was a child who was reared in poverty and worked his way through college and law school, graduating from Duke Law School in North Carolina.
He then returned to California and practiced law. He got married to Patricia in 1940 and they had two lovely girls. He then got into politics and ultimately became Governor of California. However, he was ill at ease in social settings and had few close friends.
Nixon was a very successful President in his first term and was about to cruise to a landslide re-election over George McGovern, who got only 17% of the vote and the electoral votes of only Massachusetts and the District of Columbia.
However, the Watergate Scandal had been brewing. He had authorized a group know as the plumbers and lead by G Gordon Liddy (a former FBI Agent) to break in the headquarters of the Democratic National Committee in the Watergate office building. This was silly because the DNC had no information worth stealing.
A special Senate committee was appointed by Senate Majority Leader Mike Mansfield to investigate and hold public hearings It was chaired by Senator Sam Ervin, a self-styled ”country lawyer” from North Carolina. My boss Senator Herman Talmadge was appointed to serve on the committee. He was a former trial lawyer and one of the most effective cross examiners.
Since my offices, the Senate Agriculture Committee were next door to the Senate Caucus Room (where the hearings were held), I had a front row seat. Several key Nixon aides were charged with crimes, and some ultimately went to jail. One of these was White House Counsel John Dean. He was represented by Bob McCandless, an Oklahoma friend on mine and of J.D. Williams.
The point of my narrative is that if President Nixon had not engaged in a cover-up he would have served two full terms. He would have gone down in history as one of our better Presidents.
In the case of the Optionsellers/INT FCstone Scandal the current Chairman of the CFTC Heath Tarbert had nothing do with it. It occurred in the term of his predecessor, Christopher Giancarlo. However, he is allowing the CFTC to Cover it up. This is not in the best interest of either himself or the CFTC. I am talking to investigative journalists, and I confident the truth will come out.
Michael R. McLeod
It has not been possible to get help for victims of the OptionSellers/INT FCStone scandal because victims have not been contacting their Members of Congress. Moreover, I do not know who the Victims are because the CFTC is refusing to release the names of the victims despite my repeated Freedom of Information Act Requests.
As we found out in the Watergate Scandal the coverup is often worse than the crime. I suggest that people check out BillMoyers.com, and ProPublica. A good little nonprofit is
MotherJonesNews. They are worthy of a small donation.
Michael R. McLeod
In my last blog, I urged all victims of the OptionSellers/INT FCstone Scandal to contact their members of Congress and ask for justice. In the meantime I have peppered the CFTC with freedom of information act requests. These requests have been met with a stone wall.
Also, the law firms that are representing victims are afraid to cooperate because they are afraid of losing their clients
It is no wonder that I just published my little book “The Worst Financial Scandals of the Last Twenty Years: From Madoff to the Cover up of the OptionSellers/INT FCStone Scandal . As I learned as a close observer of the Watergate Hearings (the Senator I worked for was a member of the Watergate Committee) the cover up is often worse than the crime.
My book also mentioned that I did Pro Bono work as a member of the Coalition For Futures Reform. This work resulted in the passage of the Commodity Commodity Futures Modernization Act of 2000. In this effort CFTC Chairman Gary Gensler was our leader.
I hope to be able to work on another Coalition sometime soon.
Michael R. McLeod