Vision Fined by CFTC Over 2008-09 Segregation Violations

CFTC Orders Vision Financial Markets LLC to Pay a $525,000 Penalty for Violations of Customer Fund Segregation Requirements, Failure to Notify the CFTC of its Under-Segregation, and Misstatements to the CFTC

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Vision Financial Markets LLC (Vision), for failing to segregate commodity and options customer funds, failing to notify the CFTC and Vision’s designated self-regulatory organization (DSRO) of its under-segregation, and making misstatements to the CFTC about the location and manner in which the customer funds were being held. Vision is registered with the CFTC as a Futures Commission Merchant and with the Securities and Exchange Commission as a broker-dealer.

The CFTC Order requires Vision to pay a $525,000 civil monetary penalty and cease and desist from violating the Commodity Exchange Act and Regulations, as charged.

In the Order, the CFTC finds that Vision, after using commodity futures and options customer funds to purchase securities, failed to account for and hold those securities separately for its customers. Instead, between approximately August 2008 and June 2009, Vision commingled the securities with its own funds and the funds of its securities customers in Vision’s participant account held in its own name at the Depository Trust Company (DTC). Vision represented to the CFTC that the securities were “deposited in segregated funds bank accounts,” when, in fact, certain Vision personnel involved with preparing and submitting the monthly segregation statements knew that the assets were not held at a bank but actually were held in Vision’s account at DTC and were commingled with funds of Vision and others, according to the Order.

The Order further finds that after Vision’s segregation violations and misstatements were uncovered in June 2009, Vision restated its monthly segregation statements, deducting the value of the customer funds held in the DTC account from its calculation of total segregated funds. From December 2008 through May 2009, when Vision had invested larger amounts of customer funds in securities, excluding their value from Vision’s calculation of total funds in segregation put Vision in a position of under-segregation for a six month period. However, during that period, Vision did not notify the CFTC or its DSRO that it was under-segregated, the Order finds.

The CFTC Division staff members responsible for this case are Candice Aloisi, Laura Martin, Lenel Hickson, Jr., Stephen Jay Obie, Manal Sultan, and Vincent McGonagle. Kevin Piccoli and William Tylinski of the CFTC’s Division of Swap Dealer and Intermediary Oversight also assisted in this matter.

 

2 Responses to “Vision Fined by CFTC Over 2008-09 Segregation Violations”

  1. Ron

    Dan, My wife and I had a segregated account with Elsworth Berg Capital Management, a tiny hedge fund. In CFTC vs Elsworth Berg, Doug Wilson, et al, the Court ordered the CFTC to formulate a restitution distribution Plan. Their plan utilized the Rising Tide Method against our segregated, non-commingled account from which we made an early withdrawal of over $200,000 long before the later bunch of commingled accounts customers became involved. That caused our share of the distribution to be stolen from us and distributed to customers who had no prior or then present right to our monies. That caused many more dominos to start falling against us. We are now fighting for our survival after losing all our retirement capital and income in the recession amounting to just under $2 mil. We’re on food stamps and a small SS chk. fighting 3 bank foreclosures, one including a 21-year apparent conspiracy and many illegal documents and recordings by Wells Fargo going back to our 1992 refi of only $251,250. Please let me know if you would like more info re the CFTC matter. I am one 68 yr. old man who is not an attorney doing the best I can and under daily pressures. Please advise.

    Reply
    • Dan Collins

      Ron,

      I am sorry to hear about your ordeal. I will send a note to some attorneys I know to see if they are familiar with this case. You can send additional relevant info to me privately and I can share that with an attorney to see if they think you have any recourse.

      DC

      Reply

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