Published by Global Banking & Finance Review
Dec 12, 2018
The following was issued by: PEIFFER WOLF CARR & KANE.
Investors wiped out in the recent OptionSellers.com natural gas investment debacle now face a new challenge: legal advice from firms that may not have experience in futures arbitration and commodities litigation, according to Joseph Peiffer, attorney and managing partner at Peiffer Wolf Carr & Kane (PWCK). For more information, go to https://www.optionsellerslawsuits.com.
A small law firm announced last week that it was initiating FINRA arbitration proceedings on behalf of a Michigan family and others cleaned out in the OptionSellers.com hedge collapse. But, Peiffer noted that FINRA arbitration (which focuses on regulation of broker-dealers) has no role to play in this case, which will likely be handled in National Futures Association (NFA) arbitration, federal court in Chicago, or both.
Both OptionSellers.com and the firm handling the funds option investor accounts, INTL FCStone, are regulated by the NFA and the Commodity Futures Trading Commission (CFTC). Here, OptionSellers.com is a commodities trading advisor and INTL FCStone (in this capacity) is a futures commission merchant (FCM), which means that it solicits or accepts orders to buy or sell futures contracts, options on futures, retail off-exchange forex contracts or swaps, and accepts money or other assets from customers to support such orders.
Attorney Peiffer said: Remember, these investors just lost everything and still have INTL FCStone breathing down their neck; FCStone is simultaneously trying to collect on margin calls while pressuring these folks to sign away their last chip: their legal rights. Now, you likely have investors seeking recourse in the wrong venue. What kind of message do you think this sends a Fortune 500 company?
PWCK is a national law firm with 20 attorneys on its team that can take on OptionSellers.com and INTL FCStone, which is ranked #83 on the list of Fortune 500 companies.
Attorney Peiffer added: This case isn’t about your typical FINRA broker/broker-dealer relationship. This case is going to require significant resources and funding, the OptionSellers investors need a law firm with the experience, leverage, size, and financial wherewithal to fight a Fortune 100 adversary.
Here is what PWCK is advising OptionSellers.com investors now:
1. Get legal help now before making any decisions.
2. Do not respond to INTL FCStones demands for margin call payments without seeking legal advice.
3. Do not agree to sign away your legal rights to challenge INTL FCStone or any other party involved in the OptionSellers.com matter.
OptionSellers.com investors face real challenges. In addition to losing all of their investments in the natural gas hedge fund, they also face demands for additional sums in the form of margin calls from INTL FCStone, which is also pressuring investors to sign away their rights to pursue any kind of legal challenge.
The OptionSellers.com hedge fund engaged in wildly speculative trading in natural gas options. James Cordier, the president of the firm, was a viral internet sensation in November when he issued a weepy explanatory video.
Even with a focus on high-net-worth individuals, OptionSellers.com was aggressively marketed to a wide spectrum of individuals, including unsophisticated retirees. In addition to $150 million or more lost in the hedge fund itself, the margin calls disclosed to date total more than $35 million but could add up to considerably more.
OptionSellers.com stumbled in the volatile energy markets with disastrous results last month. In mid-November, oil prices fell by the largest amount in a single day in three years and then on the very next day natural gas futures had their biggest intraday gain in eight years.
In a 2013 lawsuit filed by the U.S. Commodity Futures Trading Commission (CFTC), James Cordier, president of OptionSellers.com, his partner Michael Gross, and former firm Liberty Trading Group were charged nearly $50,000 for improper trading.
Separately, INTL FCStone was involved in its own natural-gas options controversy in 2013. As reported in a CFTC notice in May of that year, the CFTC fined the company $1.5 million for a failure to prevent an unchecked customer from taking grossly excessive risks and the brokerage ended up with losses of $127 million.
Peiffer Wolf Carr & Kane has extensive experience in handling national investment fraud cases.
In August, PWCK took legal action on behalf of victims of an elaborate investment scheme that succeeded in large part through the credibility lent to the scheme by a network of middlemen insurance agents, brokers, financial planners/investment advisors (IAs) and others who roped in unwary investors for Future Income Payments LLC (FIP). Peiffer Wolf Carr & Kane launched a coordinated wave of five lawsuits in the Los Angeles area, Houston, Chicago area, northern Florida, and Philadelphia/New Jersey targeting the seemingly legitimate financial professionals who made the FIP scheme work. For more information in that case, go to https://fiplawsuit.com.
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