We are now well past a year since MF Global‘s collapse seriously damaged the futures industry and now trekking toward six months since the Peregrine Financial Group went down in flames, taking more customer money with it.

Since November, after spending four months putting together solutions to those problems with our Restoring Customer Confidence video series, there’s been a small amount of industry action on what is arguably among the biggest threats to the futures industry’s growth – the lack of customer faith in the marketplace.

It’s been the era of the four “L’s” – low volume, low volatility, low interest rates and lots of regulation. That combination has been hit by the other L – lack of customer faith in these markets. What is sad and frustrating about the issue is that so little of it is talked about. Just one panel at the FIA Expo was devoted to it – “Moving Toward a New Customer Protection Regime.” And just days before the conference, NFA and AlphaMetrix announced a deal that will allow AlphaMetrix to provide the electronic confirmation system for the CME and NFA. A good start but since then, not much to discuss.

In July, I wrote a column about Alaron’s lawsuit against Chris Hehmeyer, the current NFA chairman, former CEO of Penson GHCO and current CEO of HTG Capital Partners.

Well, the verdict is in. The judge in the Circuit Court of Cook County dismissed the case with prejudice on Wednesday, which means it cannot be re-filed. It’s final. And actually, it should not have even come to this. Alaron’s president Steve Greenberg agreed to a legally binding arbitration case with Penson, and separately with Penson’s general counsel Carl Gilmore in 2010 over the transfer of Alaron accounts held at Penson to Peregrine Financial Group (PFG) in 2009. The NFA rulings went in favor of Penson and Gilmore.

But that didn’t work for Greenberg. So he sued Hehmeyer in court alleging “negligent misrepresentation, fraudulent misrepresentation, intentional interference with contractual relationships between Alaron and its introducing brokers” and interference with the sale of Alaron’s customer business to PFG. The suit called for $4 million in damages and another $12 million in punitive damages.

After listening to arguments from both sides, Circuit Court judge Sanjay Tailor tossed out the case, essentially saying “This looks just like the legally binding arbitration you already lost.”

In the end, this was either simply one industry person suing another as is his right, or it was a frivolous lawsuit and a waste of time.

In a broader context, the futures industry is at a point when its leadership’s focus should be on restoring the trust of customers and growing volumes. Let’s not waste more time.

Fund managers and regulators are displeased with US exchanges over certain order types that they say creates an unfair disadvantage for their clients. Platform operator Tradeweb launches a new service that provides multiple price quotes for ETF products to traders. NYSE Euronext chief Duncan Niederauer wants a complete review and overhaul of the structure of US financial markets, believing that the system as a whole has become too complex to serve its essential functions.

As we search for solutions to the Peregrine Financial Group crime spree and the MF Global non-criminal (so far) implosion, answers to questions about another criminal brokerage firm blow-up go unanswered.

The industry has come forward with after-the-fact solutions to the MF Global issues. The regulators have quickly put in place electronic confirmation of bank statements to address the PFGBEST mess. But despite all of the concern over inexperienced or captured regulators in each of those cases, the the fact is a well-known private equity investor and a robust public accounting IPO process failed to find the ongoing fraud at Refco. One estimate is that Thomas H. Lee and the public accounting firms doing the IPO due diligence spent over $10 million in investigating Refco and did not find their more than decade long fraud.

For all of the deserved criticism the National Futures Association (NFA) is getting these days for missing the “steal and spend racket” over at Peregrine Financial Group, the latest lawsuit involving the current NFA chairman Chris Hehmeyer appears rotten. This is a case only the futures industry could cook up and turn into a “You can’t make this stuff up” kind of story.

Let’s start with the Alaron suit and move backward from there. No doubt, many in the industry have seen or heard about the suit filed by Alaron Trading Corporation against Chris Hehmeyer on Monday for $4 million in damages and another $12 million in punitive damages. Among the many items alleged in this 22-page suit in Cook County Circuit Court are: “negligent misrepresentation, fraudulent misrepresentation, intentional interference with contractual relationships between Alaron and its introducing brokers” and interference with the sale of Alaron’s customer business to Peregrine Financial Group in 2009.

In short, Alaron’s president Steve Greenberg is accusing Hehmeyer of not playing fair with the customer accounts Alaron shifted over to Penson GHCO in late 2008. Ultimately, Alaron agreed to sell its business to Russ Wasendorf Sr.’s Peregrine Financial Group for $2 million, and “up to another $2 million if sufficient customer assets transferred to PFG.”

Just a few days removed from the National Futures Association’s live fire drill to reexamine and perhaps retool its audit functions, the CME Group brought its fire hose in the form of a letter to customers on Monday.

In the letter, CME’s leaders Terry Duffy and Phupinder Gill proposed that clearing houses or other depositories hold all customer segregated funds, with any interest earned going back to the FCMs.  This third-party custodian model has been around for decades, for managed futures firms, hedge funds and other institutions that need their cash separate and secure.

My house was broken into this weekend. The back door was forced and when that didn’t give way the thief broke the door glass and opened the dead bolt by hand. From there he rifled through a few drawers – he or she took a laptop, small electronics, most of our jewelry, then stuffed them in my favorite backpack and was gone.

I live on the north side of Chicago about a mile away from Wrigley Field. The police came and looked over the scene, dusted for fingerprints but got nothing. I was disturbed and felt violated, edgy and angry at the guy who took our stuff. And I was hopeful the cops would catch this person and bring him to justice. But that’ll likely not happen.

In a way, it’s a metaphor for how the victims of the MF Global case and the Peregrine Financial Group (PFGBEST), and ordinary taxpayers feel today. Someone broke into their account and stole their money. Russ Wasendorf Sr. got caught, but only after 20 years of stealing customer funds and then writing a suicide note detailing the fraud. The MF Global case is still ongoing and many in the industry wonder if there will ever be charges filed against anyone at the company.

From Chicago Tonight:

A spate of financial scandals has created a crisis of confidence among many investors. We delve into the murky world of business ethics on Chicago Tonight at 7:00 pm.

Check out the “Business Scandals of the 21st Century” interactive timeline feature on the Chicago Tonight website.

Senate investigators call HSBC’s number in the “banking scandal queue”, and release their statement detailing the bank’s involvement with terrorists and money launderers.  In London, a Barclays exec testifies that contrary to what was said last week, he did indeed get orders to jimmy the LIBOR rate from his CEO boss.  Only months after announcing it, NYSE Euronext puts away plans to create a retail CFD trading platform for commodities, currencies and equities.

An aggregation of today’s news on the PFGBest collapse. See original coverage of the story here and all our commentary and coverage here.