Alaron Trading: X_Trader infrastructure and Sentinel..

Discussion in 'Retail Brokers' started by Bernard111, Aug 30, 2007.

  1. Anyone is trading at Alaron w/ X_trader 7 as platform and about their support for this front end?

    Pros/cons of their TT feed?

    Also, which is their situation about their cash exposition in $ @ Sentinel?

    Thank you,
  2. Bump!
  3. JayS


    Interesting part....

    "Another set of questions surrounds the money returned to some Sentinel customers just before the bankruptcy. Within two days of Sentinel’s announcement that it was freezing redemptions, one firm, Alaron Trading, got all $69 million out of its main Sentinel account. Securing the release of the funds was crucial for Alaron, which had invested about half of its $150 million under management with Sentinel."
  4. The NFA gave its tacit approval for the full repayment of Alaron and the other three brokers, but Mr. Driscoll says that was before the agency discovered the missing $505 million. “There is a legitimate issue now as to how that shortfall should be treated with regard to the equitable distribution of those funds,” he says.

    What does this mean practically?

    Could the judge ask Alaron to give back some funds to be redistributed to the other creditors?

  5. Anyone here is a lawyer?
  6. Could the judge ask Alaron to give back some of the $69Mln funds to be redistributed to the other creditors, funds received 2 days before of the Sentinel chapter 11 declaration?

  7. Were those Alaron bells?

    September 04, 2007
    Futures brokers may face different ‘give up’

    The term ‘give up’ is widely understood within the futures trading community. Specifically, according to the Commodity Futures Trading Commission glossary:

    A contract executed by one broker for the client of another broker that the client orders to be turned over to the second broker...often used to consolidate many small orders or to disperse large ones.

    But several futures brokers—among them, according to Chicago Business, Alaron Trading and “three other brokers with the same type of all-cash account” that got a total of more than $110 million “within two days of Sentinel’s announcement that it was freezing redemptions”—may well find themselves giving up at least some of those proceeds as the bankruptcy process kicks into gear.

    Alaron collected $69 million from its main Sentinel account, or half of what Chicago Business described as the firm’s “assets under management.”

    Chicago Business did not name the three other brokers, but the Aug. 20 order approving the distribution of proceeds from Sentinel’s sale of a large proportion of its unencumbered assets named four firms, including Alaron, that were to receive a total of less than one percent of that distribution. Alaron’s share was just 4 bps (or four one-hundredths of one percent) of the distribution.

    Another four customers—Fortis Clearing Americas (an affiliate of the Dutch bank), Kottke Associates, Vision Financial Markets and IFX Markets—accounted for more than 50 percent of the bankruptcy-court approved distributions, with Fortis accounting for more 18 percent of the total, and the other three from 11.5-12 percent each.

    Earlier reports said that the distribution to Sentinel’s futures brokerage clients that did not have “all cash” accounts amounted to no more than 75 cents on the dollar.

    The ‘all-cash account’ distributions will undoubtedly be among the early targets for bankruptcy trustee Fred Grede, who was appointed last week. Bankruptcy law provides considerable latitude for attacking material transactions within time-frames much longer than the two days that elapsed between those payouts, and Sentinel’s Aug. 17 bankruptcy filing.

    The circumstances of the transfers are analogous, if not directly comparable, to the ‘preferential transfer’ of more than $300 million of the now-defunct SPhinX Funds’ assets from Refco Capital Markets in the days before that brokerage filed its Chapter 11 petition. The judge in that case upheld a settlement, now being appealed, that required the funds to return more than $250 million to Refco.

    Even the National Futures Association, which as recently as last Tuesday had, on these very pixels, been cheerleading the rapid distribution of funds to Sentinel’s futures brokerage customers, now seems to be a few yards down the road toward repenting at leisure. Dan Driscoll, the NFA’s chief operating officer said that its approval of the payments to Alaron and the three other brokers, came before it discovered that $505 million was missing.

    “There is a legitimate issue now as to how that shortfall should be treated with regard to the equitable distribution of those funds,” Driscoll said, according to Chicago Business.

    Noted with interest: Alaron did not escape Sentinel totally unscathed. According to exhibits supporting the US Securities and Exchange Commission fraud action, four Alaron entities were caught by the freezing of Sentinel’s Seg-III customer accounts for a total of just over $1.42 million, including the princely sum of $1.82 purportedly held in the account of Alaron FX.