| CHICAGO, Sept 27
CHICAGO, Sept 27 The U.S. Commodity Futures
Trading Commission fined Vision Financial Markets $525,000 on
Friday for illegally commingling customer money with company
It was the second penalty this week against the broker,
which raised its profile in the futures industry last year by
absorbing the accounts of former customers of bankrupt brokerage
Peregrine Financial Group.
David Stein, Vision's general counsel, could not be reached
for comment. The firm agreed to settle with the CFTC in both
instances without admitting or denying wrongdoing.
From August 2008 to June 2009, Vision used funds from
commodity futures and options customers to buy corporate notes
and bonds and then commingled those assets with its own funds
and the funds of its securities customers, the CFTC said.
Customer funds are supposed to be "segregated," or kept
separate, so the money can be available for clients to trade
with or withdraw.
Vision's violations went undetected because the broker did
not notify regulators that the amount of money in segregated
accounts did not meet requirements, according to the CFTC.
The agency requires that customer funds be separately
accounted for and that brokers hold sufficient funds in customer
segregated accounts to meet their obligations to clients.
Vision "misstated in monthly segregation statements filed
with the commission the location and manner in which the
customer funds were being held," the CFTC said.
The violations were discovered during a regulatory check in
June 2009, according to the CFTC, which did not explain why it
did not impose the fine until now.
The CFTC on Tuesday fined Vision $140,000 for failing to
supervise employees handling futures accounts in 2012.
Peregrine's trustee, Ira Bodenstein, selected Vision to take
on customer accounts last year because Vision offered the
highest bid, said Robert Fishman, a lawyer for the trustee.
Vision paid about $325,000.
"We'd never heard of them before," Fishman said about Vision
on Friday. "Their bid was the best bid and that was all we
needed to know about it."
Peregrine collapsed in July 2012 after founder Russell
Wasendorf Sr. attempted suicide and confessed to stealing tens
of thousands of dollars from customers over two decades.