Can What Happened to MF Happen to IB?

Discussion in 'Interactive Brokers' started by catmango, Nov 2, 2011.

  1. Someone posted this in another thread:

    Like Gekko said in wall street, you need to buy a certain amount of stock to get inside and see if the books are cooked.
     
    #71     Dec 21, 2011
  2. A 28 million is as small as any good smart trader does, despite being a gain or loss. MF bet the house on the "sure thing", except his size was too big. I think Petterfy has way better notion of risk than any Wall Street CEO, I really respect his real-life trading history.
     
    #72     Dec 21, 2011
  3. Options12

    Options12 Guest

    But buying common stock in MF Global was a proprietary trade, correct?

    I don't know how IB can state that the company does not proprietary trade.
     
    #73     Dec 21, 2011
  4. Daal

    Daal

    Either that or its not true that it wasn't Peterfly who bought, wasn't he saying in an interview 'you win some you lose some'?
     
    #74     Dec 21, 2011
  5. Options12

    Options12 Guest

    The MF common stock purchase has been poorly explained by the press and by IB.

    Without additional explanation it would appear that IB does not trade on behalf of IB except when they do.

    It would be interesting to learn what dates the stock purchases were made.

    Were the purchases executed before the MF Global downgrades and rumors about liquidity problems related to sovereign debt exposure? Or were the purchases made right up to, and perhaps during, the due diligence period for the purchase of the brokerage?
     
    #75     Dec 21, 2011
  6. Hedgehog1

    Hedgehog1

    Sure; there are not different agreements for Illinois residents, so far as I'm aware.

    However, in the (unlikely) event of a dispute you may well end up in a legal/resolution process outside the UK - as is the case for UK clients of MF Global.

    As I recall, signing up as an IB UK Customer you, inter alia: 1. commit to binding arbitration, 2. waive any right to punitive damages, 3. agree to limit any claim for damages to the maximum fees that you have paid IB, 4. submit to the legal jurisdiction of England & Wales for any of your claims against IB UK, but 5. accept that IB can opt to bring an action in any jurisdiction it pleases, 6. accept the arbitration of US associations for claims arising in respect of US traded instruments, and 7. accept US jurisdiction for disputes arising with US based exchange data providers.
     
    #76     Dec 21, 2011
  7. Probably the parent holding company, not the brokerage company, bought the stock?
     
    #77     Dec 21, 2011
  8. Options12

    Options12 Guest

    Comintel, I don't know if you are wrong. I can't find any mention of whether or not the MF prop trading occurred within the brokerage units.

    But the list of MF subsidiaries is vast. I'm sure it will be hard to tell which subsidiary is responsible for which failed trade:

    http://globaldocuments.morningstar....b1e3b4bef05be3d14f8.msdoc/original/dex211.htm
     
    #78     Dec 26, 2011
  9. I remember seeing this link several times in the past, but I guess that they really added some detail to that since MF Global, am I right? Very detailed now about where they put the cash, how they lent out property, and some 2 new paragraphs about MF Global
     
    #79     Dec 27, 2011