The clearing firm INTL FCStone took great care to insulate itself from lawsuits that could be brought by investors. The following disclaimer accompanied every statement that was emailed to investors.
“It is understood and agreed that all futures and/or option transactions made by INTL FCStone Financial Inc (“FCM”) for your account are either hedges or contemplate actual delivery and receipt of the property and payment therefore, and all property sold for your account is sold upon the representation that you have the same in your possession actually or potentially. These transactions are made and subject to Federal and State laws.”
When one considers that INT FCStone had been subject to severe sanctions by the CFTC for its conduct since 2008, it is understandable that they would try to insulate themselves from more sanctions and legal actions.
The problem they have with this legal posturing is that it flies in the face of everything that OptionSellers has ever told its investors. In both their book “The Complete Guide to Option Selling” and their frequent newsletters and communications with their investors it was clear that none of the conditions of INT FCStone were ever met.
It was always abundantly clear that transactions made by OptionSellers were not hedges and none of them “contemplated actual delivery and receipt of the property and payment therefor”. OptionSellers only sold and never bought options. If someone from INT FCStone denies this in a court of law, they will be committing perjury.
Michael R. McLeod