Koutoulas stands by claims

January 8, 2015 01:02 PM

Dear NFA Members,

You may have read the Chairman of NFA’s letter denying the accusations I raised about improprieties committed by NFA’s Management and Executive Committee. I respect the Chairman, and have no doubt he felt he had no choice but to support Management.

You elected me to the Board of NFA because you believed that after my thousands of hours of pro bono service on behalf of MF Global and PFG customers, I would serve on your behalf with integrity. I do not like or welcome conflict, but I felt my fiduciary duty required me to raise this issue. In this case, it would have been far easier for me to just say nothing, acted like a member of the Club, and put my affiliated business partners first—many of whom do not necessarily agree with my own personal views about NFA. But, you did not elect me to serve my personal interests, you elected me to stand up for what is right, and to ensure that our regulator follows its own rules, and works to protect our industry.

I re-iterate that everything I said is true and has been reported to the CFTC with documentary support, which I trust will be made public at some point. Additionally, the Chairman’s letter to you is incorrect in several instances.

The Report Produced by Outside Counsel was in No Way “Independent” and was Not Issued as a Formal Legal Opinion

·  The Attorney that conducted the “Outside Counsel Review” was engaged at that time by NFA on another, related matter.

·  Said Attorney was a witness to the Executive Committee Meeting, and thus could not conduct an “Independent” review.

·  Said Attorney did not interview me, or any other witnesses, to my knowledge.

·  Said Attorney disclaimed his report as “Not Constituting a Formal Legal Opinion of Counsel.”

·  During the MF Global bankruptcy litigation, I personally objected to said Attorney’s firm’s fee application for making false statements to the Judge.

The Alleged Nominations were Contested at Length Internally

·  This situation has been contested internally since February, it is not just, as the Chairman stated, “campaign nonsense.”

·  I was not the first Executive Committee member to dispute the correspondence presented to the Board which claimed that an Executive Committee member had nominated certain Public Directors at the January 2014 Executive Committee meeting. Another Executive Committee member initially raised the issue to NFA Management, in writing, while a third Executive Committee member verbally agreed that no nominations were made.

·  I objected to the veracity of the content of the email in question, and to Management’s representations that the alleged nominations were made, in front of the entire Board at our February 2014 meeting.

·  Following my objections, the Director in question refused to confirm that he made his alleged statements to the Board.

·  Four other Directors joined me in dissenting from the vote to confirm the alleged nominations.

Page 1 of 2
About the Author

James L. Koutoulas, Esq. is the CEO of TyphonCapital, co-CEO of TyphonAccess, President of Commodity Customer Coalition, and a member of the National Futures Assocation Board. You can follow him on Twitter: @jameskoutoulas