Futures brokerages will be required to allow their first-line regulators direct, online access to the bank balances of their customer fund accounts after the CEO of a small brokerage said he bilked investors of more than $100 million using paper bank statements.
A committee including representatives of CME Group, the National Futures Association, the InterContinental Exchange, the Kansas City Board of Trade and the Minneapolis Grain Exchange will "immediately begin the process of confirming the balances of customer segregated bank accounts for all (futures brokerages)," the NFA said in a statement on Tuesday.
Futures brokerages will be required to allow their regulators direct online access to confirm customer funds at banks and any bank that does not authorize such access "will not be considered an acceptable depository for holding customer segregated and secured funds," the statement said.
Cedar Falls, Iowa-based PFGBest CEO Russell Wasendorf Sr was arrested on Friday after he confessed to a 20-year scheme in which he doctored paper bank statements and forged bank officials' signatures to convince regulators he had more than $200 million more in customer funds than were actually in the firm's bank account.
(Reporting by Ann Saphir; editing by Andre Grenon)