When I was a young lawyer and lobbyst I accompanied Bob Wilmouth, the President of the Chicago Board of Trade, who had been summoned to see Congressman Jack Brooks of Texas. Brooks had been summoned Wilmouth to see him because the Texas Hunt brothers had tried to corner the silver markets in 1980.
Brooks started the conversation by saying ”Aunt Sally has the red eye out for you. Those dirty SOB Hunt brothers (Republican oil tycoons from Texas) have cornered the silver markets in Chicago and run up the price of silver. It got so high that thieves have broken in and stolen Aunt Sally’s silverware”.
Wilmouth, a former banker, was taken aback by this outburst and did not know what to say. However, I thought I saw a twinkle in Brooks’ eyes and found it mildly amusing.
Years later I accompanied Brooks on a trip to Chicago to visit the three exchanges, the CBOT, the CME, and the CBOE. We sat beside each other on the airplane and he inquired about my life. I related to him that my wife had recently died.
Brooks immediately softened up and adopted a fatherly tone. He said, ”That’s alright son, you are going to be alright”. He then proceeded to tell me his life story. He had been born dirt poor near Beamont, Texas. He recalled that he wanted to date ”that beautiful little girl who lived in the mansion on the hill ” but he could not because he was too poor.
However, this was only Brooks early life. He represented his Texas District for 42 years. This was after he had served his country well in the Pacific theater as a Marine officer in World War II. He got through college on the GI Bill. Like my two uncles he was a part of Tom Brokaw’s ”Greatest Generation”.
He also had a good home life. He loved his wife Charlotte, and they had three children.
I strongly recommend reading the book about his life ”Jack Brooks, The Meansest Man in Congress”.
Michael R. McLeod
As one whose experience in the law governing commodity futures goes back to my time as the young General Counsel and Staff Director of the Senate Agriuculture Committee, I have been quite disappointed in the inactivity during the CFTC’s OptionSellers/INT FCStone debacle.
As the young staffer of the Senate Committee, I drafted the law establishing the CFTC in 1974. After having my savings wiped out in the current scandal, I have been astounded by their failure to act. The only branch of government I have heard from is the Federal Bureau of Investigation. One month after the crash of OptionSellers I received a letter from a Victims Specialist of the FBI, DOJ .The letter said I had been identified as the victim of a financial crime.
This failure to act to fill its duty under the law is a quite different from its actions against INT FCStone in 2008 and 2009. Below is their press release
“ Washington, DC - The Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against FCStone LLC, a Futures Commission Merchant (FCM) headquartered in New York, New York, for failing to diligently supervise its officers and employees relating to its business as an FCM in violation of Commission Regulation 166.3, 17 C.F.R. § 166.3 (2008). FCStone failed to implement adequate customer credit and concentration risk policies and controls in 2008 and part of 2009, allowing one account (Account) to acquire a massive options position that it could not afford to maintain. Ultimately, FCStone was forced to take over the Account, and lost approximately $127 million. The CFTC Order requires FCStone to pay a civil monetary penalty of $1.5 million, retain an independent consultant to review its internal controls and procedures, and cease and desist from violating its supervisory obligations.”
This is very much the same thing that thing that happened in the current scandal. The only thing that is different is that this time INT FCStone is trying to avoid paying for their own losses. They have claimed that these huge losses are solely the responsibilities of innocent investors.
It is hoped that the Congressional oversight committees will conduct an inquiry into this.
Michael R. McLeod
I had two uncles on my mother’s side who were foot soldiers in the Normandy Invasion 75 years ago. One was David Ramsey and the other was Richard (Dick) Ramsey. When Uncle Dick came home from the war, his two children were frigtened because they did not know him.
These people who served in World War II were memorialized in Tom Brokaw’s book ”The Greatest Generation”. He did his book to honor those who served their country in the war and came home to be productive businessmen and members of society. My uncles fit that mold to a tee.
Both of my uncles were Christian gentlemen and they never talked about the violence and killing they were a part of. When the book came out I mailed a copy of the book to Uncle Dick. Unfortunately, his daughter wrote me that he had passed away.
Michael R. McLeod
As I wrote a few weeks ago, the victims of OptionSellers/INT FCStone should unite in a class action lawsuit. Since then, I have found a law firm that is experienced in financial fraud cases. One victim other than me has contacted this firm. I hope that several others with do the same. I can connect any other victims to this firm.
I believe there is power in numbers. Rather than each investor suing INT FCStone as an individual, we should do so as a class. Another advantage is the individual investors will have to pay their law firms a contingency fee of 35% of whatever the firm recovers.
Also, I am curious as to whether any other investors received a letter from the Victim Specialist of the FBI, Department of Justice that I did. I received this letter on December 14, 2018, which was one month after OptionSellers defaulted and INT IFstone stuck it’s investors with the entire loss. This letter said that they had identified me as the victim of a financial crime.
No clearing firm has ever done this since the law creating the CFTC was enacted in 1974. I know better than anyone, because I was the young Senate lawyer who drafted that statute.
Subsequently, I went into private practice and represented the Chicago Board of Trade until they were acquired by Chicago Mercantile Exchange in 2007. No clearing firm has ever even attempted to get away with what INT FCStone has gotten away with so far.
The current trade war between China and the US is hurting American farmers. Commodities such as such as soybeans are the most significant. In 2017 the US exported $23.8 billion in farm products to China.
The issue of farm income will be very important in the 2020 Presidential election. Most of the farming states went for Donald Trump in the last election in 2016. If they are losing money, they will not do so again in 2020.