Rep. Austin Scott, Chairman of the House Agriculture Committee's Subcommittee on Horticulture, Research, Biotechnology and Foreign Agriculture, held a public hearing to review the impact of enforcement activities by the U.S. Department of Labor (DOL) on specialty crop growers. Specifically, Subcommittee Members addressed growing concerns that DOL is using the "Hot Goods" provision under the Fair Labor Standards Act of 1938 (FLSA) in an arbitrary manner against producers of perishable agricultural commodities without regard for the inevitable destruction of the product and significant economic hardship inflicted on farmers and their employees.
The Ag Minute: Futures Markets Must Function with Confidence to Allow Farmers to Effectively Manage Risk
Tamara Hinton, 202.225.0184
WASHINGTON – This week during The Ag Minute, Chairman Frank Lucas discusses the efforts of the House Agriculture Committee to examine the circumstances surrounding the collapse of Peregrine Financial Group, Inc and the estimated $220 million shortfall in client funds. The company filed for bankruptcy shortly after regulators froze their operations through emergency enforcement actions. Tomorrow, the House Agriculture Committee will hold the first hearing on the matter. Chairman Lucas stresses that his priority is ensuring that customers have their money returned and confidence in the futures markets is restored.
Click here to listen to The Ag Minute. The transcript is below.
"Once again, the futures industry is facing another bankruptcy where customer funds – that were supposed to be separate from the company’s investment funds – are missing.
"On July 10, the National Futures Association froze the operations of PFGBest and the Commodity Futures Trading Commission filed a suit against the firm and founder for allegedly committing fraud and violating customer segregation laws.
"Later that day, PFGBest filed for bankruptcy and it is has been reported that roughly $220 million in segregated client money is missing.
"Meanwhile, customers of MF Global have still not received all of their funds since the company went into bankruptcy last October.
"This is unacceptable.
"The futures and swaps markets must function with confidence to allow farmers and ranchers the ability to effectively manage risk.
"The Agriculture Committee is trying to get to the bottom of this and will hold a hearing tomorrow to examine this bankruptcy and get an update on MF Global.
"We’ll examine what regulators are doing to ensure customer funds are protected, and whether new reforms will ensure that fraud in the futures markets cannot be carried out at customers’ expense.
"Our highest priority is ensuring that customers have their money returned, and confidence in the futures markets is restored."
The Ag Minute is Chairman Lucas's weekly radio address that is released from the House Agriculture Committee.