You’re screwed, and we’re proud: NFA

Sentinel Seg 3 clients to see 50 cents...maybe

National Futures Association president Dan Roth running victory laps in the Chicago Tribune this morning:

...the NFA had met its goal of extracting as much cash [from Sentinel Management Group Inc] as it could, as quickly as it could, so that futures brokers could avoid insolvency. “No firms have failed,” Roth said.

Not such good news for customers—“hedge funds [including commodity trading advisors], trust accounts, endowments and individuals,” according to the US Securities and Exchange Commission—with assets in Sentinel’s Seg 3 account, from NFA chief operating officer Dan Driscoll:

Sentinel told those in the Seg 3 account that their assets totaled $700 million. But investigators have found that the Seg 3 account has just $96 million in it.

Not enough to make whole

“It doesn't add up anywhere near $700 million,” Driscoll said. He said some other money may be available to Seg 3 customers, but not nearly enough to make them whole. “Based on what we have seen now, it would appear to be less than 50 cents on the dollar,” Driscoll said.

The NFA had not returned an email seeking an interview at pixel-time.

The Sentinel lottery pays out
NakedShorts Aug. 22 2007

Sentinel repays some clients
But many customers haven't seen a dime
by Robert Manor and Becky Yerak
Chicago Tribune Aug. 22 2007