A piece snuck up on Reuters last week outlining some of the points being held at the CFTC roundtable on how to better protect customer funds.

There are some good points here. The first one (make MF Global customers whole) was floated by Attain CEO Jeff Malec shortly after the MF bankruptcy and repeated on a near daily basis on the phone. The industry as a whole needs to step up and restore MF clients funds in the name of saving the industry.  Let them book a credit due from the MF estate for the amount they pay into the “make them whole fund,” and upon any recovery it goes to the firms who made the clients whole. Shoring up confidence in the sanctity of segregated accounts is crucial for the future of the industry, and it’s the right thing to do.

In addition, we wholly support a rule saying heads of futures firms holding client assets should be criminally and personally liable for any missing funds. The buck has to stop with the top executives; the “Corzine Defense” of claiming ignorance in the face of large transfers of customer funds is no excuse.

We continue to believe the best way to insure no MF madness happens again is to make any creditor claims in the case of any firm dealing with customer assets going bankrupt subservient to any customer claims. That is, no lines of credit, bonds, employee salaries, etc., will be paid out until and unless customers are made whole. That would create a very large invisible hand which would make darn sure no shenanigans were going on – for fear of being last in line to get their money back.