When OptionSellers.com defaulted in 2018 and INT FCStone came after the innocent investors, I thought that it was probably the first time.

Nothing could be further from the truth!

A quick review of CFTC press releases shows a pattern of misconduct that goes back to 2008. In one case FCSTone LLC was charged with failure to supervise its officers and employees. The pattern of misconduct occurred in 2008 and part of 2009.

Ultimately, FCStone was forced to take over the account and lost approximately $127 million. The CFTC ordered them to pay a 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.

There was a similar case in 2017. However they never learned and the OptionSellers default of 2018 is the worst ever. In this case, FCStone at first billed the innocent investors for everything that had been lost.  In many cases the investors were billed for over a million dollars.  Subsequently they seemed to be content to merely take the investors’ money and refund nothing of the hundreds of millions of dollars lost by these investors.

It is to be hoped that the CFTC will soon begin proceedings in this case. I know that attorneys for the investors have already petitioned the CFTC for relief.  Also, I am asking Congress to hold public hearings on this case. The regulatory framework for the  CFTC will break down if this kind of conduct goes unpunished.

Michael R. McLeod