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.

See these excerpts from a company press press release on April 9.

“ The Company now offers its 3,000+ institutional clients the ability to trade a full array of fixed income products across the entire risk spectrum. The expanded product line was facilitated by the recent strategic acquisition of GMP Securities LLC, formerly Miller Tabak Roberts Securities, in January. Additionally, and as a result, the Company is looking to expand its High Yield, Convertible and Emerging Market debt product lines through key hires on each desk.

Robert LaForte, Co-Head, Fixed Income, INTL FCStone Financial, commented on today's news, "In addition to strengthening our offering, the acquisition deepens our institutional customer base, enabling us to consider products such as Leveraged Loans, CLOs, and build out DCM capabilities for primary issuance.  The demand for additional products across the risk spectrum continues to grow within our current clients and we anticipate our investment grade corporate bond offering will be a large focus for our newly acquired accounts that currently transact in High Yield and Emerging Market debt."

The 1,500+ new institutional customers acquired through the acquisition enables the Company to expand its global reach and distribution channels. Institutional clients will also benefit from INTL FCStone's full range of financial services and products within the securities, commodities, derivatives, foreign exchange, and global payments sectors.

Anthony DiCiollo, Co-Head, Fixed Income, INTL FCStone Financial, added, "This new diversified account base will not only benefit from our suite of fixed income products, but also from INTL FCStone's strong network and differentiated offerings. Our high-touch approach exemplifies our commitment to supporting the needs of our institutional clients, setting us apart in the sector."

INTL FCStone's Securities Division offers its clients equity and debt products.  In equities, it is the leading OTC market maker by dollar volume, making markets in over 5,000 securities including over 3,600 OTC ADRs and GDRs.  In fixed income, INTL is an institutional dealer making markets in U.S. Government Securities, Federal Agency, Mortgage-Backed Securities, Asset-Back Securities, Investment-Grade Corporates, High-Yield Corporates, Emerging Market Debt, Convertibles and Municipal securities to over 3000+ institutional clients. “

Michael R. McLeod