Washington, D.C.—FIA filed an amicus brief in the FCStone/Sentinel litigation involving the protection of customer funds that may have been moved out of futures segregated accounts. FIA’s brief focuses on protections afforded to customer segregated funds in bankruptcy situations.
The issue on appeal addressed by FIA is a U.S. district court's decision in March 2016 which held that futures customer funds are property of the bankruptcy estate to be generally distributed to Sentinel’s creditors, and thus not subject to special protection for the exclusive benefit of futures customers. FIA’s brief explained how the court’s decision is inconsistent with both standard industry practices with respect to holding futures customer funds and federal laws that prioritize the claims of futures customers to their funds in the event of an FCM bankruptcy.
The appeals court accepted an amicus brief filed by FIA in 2013 addressing other issues of concern to the industry in the same bankruptcy proceeding.
Update, 31 August 2016: Judge David F. Hamilton granted permission for FIA to file the amicus brief, which in effect means that the amicus brief will be considered by the court.
