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October 14, 2008

In this Issue: Senior Summit Highlights Account Protection During Market Volatility Las Vegas Traders Expo

Regulators aim to help senior investors and assist firms who serve them during Senior Summit

The Securities Exchange Commission (SEC) held their third annual Senior Summit in Washington, DC on September 22, 2008. The summit, held in partnership with the Financial Industry Regulatory Authority (FINRA) and North American Securities Administrators Association (NASAA), provided information and resources to help senior investors ensure that their assets are well-managed and protected.

Among the actions recommended by the summit were:

  • Diversifying your portfolio,
  • Creating an income cushion,
  • Being smart with withdrawals,
  • Monitoring costs and performance,
  • Being knowledgeable of the persuasion tactics of fraudulent individuals, and
  • Preventing investment fraud.
The summit also aimed to assist the investment advisers and brokers who serve senior investors. The SEC, FINRA and NASAA issued a joint report which summarized best practices utilized by firms who provide services to elder investors including:
  • New practices implemented by firms to help meet the needs of senior investors,
  • How to communicate effectively with seniors,
  • Training firm employees on identifying diminished capacity and elder abuse, and
  • Utilizing new senior-focused supervision, surveillance techniques and compliance reviews.
For archived materials of the summit and additional resources visit:

For the joint report released by the SEC, NASAA and FINRA visit: Protecting Senior Investors: Compliance, Supervisory and Other Practices Used by Financial Services Firms in Serving Investors.

NFA to provide investor education at Las Vegas Traders Expo

NFA will sponsor an information booth at the Traders Expo being held at the Mandalay Bay Convention Center in Las Vegas from November 19 - 22. NFA will be distributing investor education brochures including "Opportunity and Risk: An Educational Guide to Trading Futures and Options on Futures" and "Trading in the Retail Off-Exchange Foreign Currency Market - What Investors Need to Know". Attendees will learn about the futures and forex markets and their rights as investors.

Admission to the expo is free. For more information about the expo, visit the expo's Web site:

Account protection concerns during market volatility

With the volatility of today's financial markets, investors may have questions about the safety of their assets and what protections are in place for them. The answers depend on what types of products they are trading.

Regarding futures and options on futures contracts, government regulations require the strict handling of customer funds used to participate in U.S. futures markets. Funds that customers have deposited in an individual account with their futures commission merchant to trade on futures exchanges located in the United States are required to be segregated (held separately) from any of the firm's own funds. The amount segregated will increase or diminish as the customer makes or loses money from trading.

Customer funds are not subject to creditor claims against a futures commission merchant should it become financially unstable or insolvent, and customer funds can be transferred to another futures commission merchant if necessary. Finally, even though a futures commission merchant is required to segregate customer funds, customers still may not be able to recover the full amount of any funds in their account if the firm becomes insolvent and there are insufficient funds available to cover the obligations to all of its customers. Customer accounts are not insured. Customers should ask their broker about account protection and should be aware of the limitations imposed on the protection of the funds in their futures trading accounts.

For additional information visit the Commodity Futures Trading Commission's resource Understand Commodity Futures and Options Contracts and Your Contractual Obligations.

Recent Enforcement Actions

In the third quarter of 2008, NFA's Business Conduct Committee issued Decisions, Member Responsibility Actions and Final Orders in Registration Cases against the following NFA Member firms and individuals. Click on the name for more detailed information.

Decisions in Disciplinary Cases
American Atlantic Financial Corp. et al.
Robert J. Beasley
James R. Burbage
JST Capital Management LLC
Longboat Global Funds Management LLC
Todd Marshall
Randall McCullough
Stephen Miles
Nextsource Trading Corporation, et al.
Joshua Scott
Stephen J. Shore
SNC Investments Inc.
Christopher B. Spinnler
Sterling International Commodities
Trade Center LLC
VanKar Trading Corp.
Worldwide Associates LLC

Member Responsibility Actions
Capital Blu Management LLC

Final Orders in Registration Cases
Gregory T. Anderson
Edward Lau

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