THORNTON | A Thornton farmer is pushing for commodity brokers to be better regulated after he said he lost hundreds of thousands of dollars because his broker allegedly didn't "follow the rules."
"The NFA (National Futures Association) has not been held accountable," said Doug Bell.
Bell said he lost the money after his broker with the NFA allegedly made trades without his permission. After that he filed a complaint with the NFA, but since it's a self-regulated industry he was never questioned or heard his broker's version of what happened.
"If they believe his side, that's the end of the investigation," Bell said.
Bell is now asking for better commodity broker regulations to protect other customers. He has been talking to state and federal legislators, along with farm organizations.
Specifically he is asking for the U.S. Commodity Futures Trading Commission (CFTC), a government agency that oversees the NFA, to be held more accountable when it is reauthorized by Congress.
Bell is proposing 10 changes to the regulations:
- Brokers must follow the rules of the market commodities are traded on.
- Rules are enforced on both brokers and customers.
- When a customer files a complaint, all facts and statements are gathered.
- Customers are provided the broker's account of events.
- Customers have the right to rebut the broker's version and ask for a hearing.
- Customers will be provided with a decision from the investigation.
- Decisions can be appealed.
- The investigation should be done in a speedy process.
- Investigators will work with officials if criminal activities are involved.
- Brokers can be held responsible for damages caused by wrongful activities.
Sen. Chuck Grassley, R-Iowa, agreed that oversight is important.
“The futures industry has been a vital tool for managing risk for farmers, agriculture companies and end users. It’s critical that everybody can trust the system," he said. "As the reauthorization for the CFTC is up for debate, strong oversight must be a key component. If the CFTC regulators know that there is tough and effective oversight, they will be more apt to provide their own oversight and enforce the law.”
From a farm organization perspective, Cerro Gordo County Farm Bureau President Kevin Pope said he and fellow members took the issue to the Iowa Farm Bureau but it has received little support.
"As a farm organization we don’t like to see more rules and regulations," Pope said. "We don’t want to sit here and push for rules and regulations. You need to be aware of who you’re doing business with and comfortable with that."
While the issue did not receive much support, Pope said they will bring it up again during the Iowa Farm Bureau's annual meeting in December.