On Friday December 14, 2012, the NFA officially mailed ballots for the upcoming election for their Board of Directors. James and I made the decision to run for the CTA/CPO representative positions so that would could further the CCC's mission to return assets to commodity customers embroiled in the MF Global and PFGBest insolvencies and in order strengthen customer protections for all commodity customers.
Below please find the position paper we submitted to the NFA to be included with the CTA/CPO ballot. We will be reaching out to CTAs over the coming weeks and making our case to earn their votes. We hope this will serve to open a dialogue to create the changes we need to make in order to restore confidence flagging in commodity markets.
James L. Koutoulas, Esq. and John L. Roe founded the Commodity Customer Coalition ("CCC") to fill a void in leadership in the wake of the MF Global Bankruptcy. The group has been solely funded by donations. James and John have devoted thousands of hours of volunteer work to the CCC and accomplished the following:
- Forced the distribution of 72% of MFG customer money six weeks after the bankruptcy instead the trustee’s proposal of a 60% distribution, nine months later
- Filed a brief in MFG bankruptcy court asserting segregated accountholders have priority over general creditors in the event of a shortfall in an FCM, and successfully lobbied NFA to submit a complementary Amicus Brief.
- Lobbied for an Independent Counsel to take over the criminal investigation of MFG, with 65 Congressmen signing a letter of support.
- Authored two white papers to inform Congress of the implications of the bankruptcy, and wrote many of the questions asked by Congressmen in Capitol Hill hearings.
- Testified before the Senate only nine months after the CCC’s formation and provided 30 pages in recommendations for industry reforms.
- Worked directly with the PFG trustee to expedite initial customer distributions and provided pro bono representation for customers.
- Produced claims FAQs for both the MF Global and PFG bankruptcies and hosted numerous conference calls educating customers on the legal issues in both cases.
- Worked with IRS to provide official tax guidance for MF Global victims.
- Continuing to collaborate directly with the leaders of CME Group, Futures Industry Association, NFA, and National Grain and Feed Association on a tri-party segregation pilot program and a private, industry-owned insurance cooperative plan.
In addition to representing the interests of CTAs and CPOs, James and John will advocate for the following issues once elected:
- Lifetime NFA bans for Jon Corzine, Russ Wassendorf, Sr., and any other culpable parties from MF Global and PFG.
- Change NFA joint arbitration procedures so that each victim doesn’t have to pay a separate filing fee for claims arising out of the same incident. This would reduce recovery time as compared to class action litigation from 5 years to about 1 year.
- Change auditing culture to focus less on on minutiae (ie past performance disclaimer being in all caps or not, personal charges showing up on company credit card), and more focus on identifying fraud.
- Proportionate treatment of big firms and small firms for violations. Currently, a business conduct committee fines the same amount no matter what the size of the firm, which can put a small company out of business while being negligible to large firms.
- Make FCM data more accessible. Current system is good start, but needs to be easily accessible for customers and have more informative calculations, such as percentage of excess compared to customer assets.
James L. Koutoulas, Esq. is the CEO of Typhon Capital Management, a CTA and CPO with $75M in AUM across the Arion Financials Program, Chiron Currency Program, Plutus Grain Strategy, and Tauros Livestock Strategy. Typhon also manages the Hydra Multi-Strategy Agricultural Fund, LP. James is the President and Co-Founder of the Commodity Customer Coalition, a non-profit customer advocacy organization formed in response to the MF Global bankruptcy. James has been a vocal advocate for commodity customers, appearing regularly on CNBC, Bloomberg, and CNN, featured in major national print publications such as the Wall Street Journal, New York Times, and Reuters, and has written advocacy pieces for ZeroHedge.
Mr. Koutoulas has a J.D. from The Northwestern University School of Law and is a member of the Illinois Bar. He serves as a consulting expert to the Northwestern Investor Protection Clinic and is a member of Mensa. James also has a degree in Finance from the University of Florida, where he was a National Merit Scholar, AP National Scholar, and Angelo Langadas Classics Scholar.
John L. Roe is the founder and president of Roe Capital Management, a CTA firm which offers managed futures programs trading equity index futures. He is also a principal and founder of BTR Trading Group, Inc, a futures broker specializing in the execution of algorithmic trading systems and alternative investments for private clients and small institutions. Mr. Roe began his career in the futures industry working as a Globex clerk on the floor of the Chicago Mercantile Exchange’s Eurodollar pit. He is active in philanthropy and politics as well, serving on the boards of directors of several non-profit organizations from time to time. He has also served as a strategic adviser for several US Congressional campaigns and managed campaigns for state legislative office. His work with the CCC has been featured in publications ranging from the New York Times to the Wall Street Journal, as well in various television appearances on networks like CNN, Bloomberg and PBS.