As an update, the date to set the auction for Refco FX has been pushed back to the 9th. Most likely there will be no new news before then. This will not be the auction itself, this will just be the date they determine when the auction takes place. Trader/God
Dec. 5 (Bloomberg) -- Refco Inc. affiliates Forex Capital Markets LLC and Advanced Currency Markets SA are attempting to take back their own shares from the bankrupt futures broker to protect their business. ACM in Geneva will seek Swiss court approval today to halve Refco's stake to about 26 percent, after the New York broker got an injunction to block the move last month. Forex Capital Markets, or FXCM, a New York-based currency trader, offered Refco $110 million to buy back its 35 percent share as well as acquire RefcoFX, FXCM's biggest client. A New York bankruptcy court is scheduled to consider that bid on Dec. 8. ACM and FXCM, electronic brokers in the $1.9 trillion-a-day foreign-exchange market, are trying to wrestle control of their firms to keep stakes owned by Refco from being sold or liquidated by a bankruptcy judge. Refco has more than 20 affiliated businesses after selling its main futures assets to hedge fund company Man Group Plc to help pay the $16.8 billion it owes creditor. ``Brokers are not surprisingly looking to get rid of their link with Refco,'' said Daryl Swain, co-founder of Wallwood Consultants Ltd., a London-based currency dealing firm and a former client of both FXCM and Refco. ``Any time anyone mentions the name Refco it doesn't go down well at all.'' Refco spokesman James Craig in New York declined to comment on ACM for this story because of ongoing litigation. He also wouldn't comment on FXCM. Hidden Debts Refco was the fourth-largest U.S. broker before its Oct. 10 disclosure that former Chief Executive Phillip Bennett hid $430 million of debt from investors and auditors. The company filed for bankruptcy within a week as clients withdrew more than $3 billion from accounts. Refco took control of ACM in July 2004 to expand its business with individual clients in Europe and the Middle East. The price for the acquisition wasn't disclosed. ACM on Nov. 15 increased the share capital of other holders to dilute Refco's stake, Nicholas Bang, a founder and managing director at ACM, said in an interview Nov. 22. Refco got an injunction from a Geneva court to prevent the issuance of ``any new ACM shares'' and said it still holds 51 percent of the firm. ``After Refco collapsed a lot of our clients called to ask what would happen with their accounts,'' Bang said. ``They were very concerned about our ties with Refco.'' `Not Nice' ACM has more than 9,000 customers who trade about $50 billion monthly using the company's online platform. None of the accounts, which are at depositary banks in Switzerland, has been blocked, Bang said. He declined to comment on the proportion of accounts that Refco contributed to the company, or provide details on the clients that left since the broker's bankruptcy. ACM is unlikely to succeed in diluting Refco's share in the company without its consent, Mark Andrews, head of insolvency and restructuring at London-based law firm Denton Wilde Spate, said in an interview Nov. 23. The hearing is scheduled for 4pm at Geneva's so-called first instance court. ``We haven't done anything wrong,'' said Alexandre Axarlis, who co-founded ACM with Lloyd la Marca and Bang. ``I'm sure pretty much all the brokers that can afford to cut ties with Refco will do so. It's not a nice situation to be in when a business partner is hiding things from you.'' `False Pretence' FXCM agreed to buy Refco's unregulated currency-trading accounts on Nov. 11, taking back the stake in its own company that Refco originally bought in 2003. RefcoFX contributed 30 percent of FXCM's revenue last year, according to court filings. Seventy of FXCM's 500 employees worked on Refco-related business; all have been retained, Chief Executive Drew Niv said. ``We want our shares back,'' Niv said in an interview. ``We sold them to you under some false pretence that you were a credible company,'' Niv said about Refco. FXCM would have access to 15,000 Refco customers should the takeover succeed, Niv said. Former Refco customers may choose to trade with FXCM or leave in favor of a competitor, he said. Refco ``going out of business gives a big black eye to the industry,'' Niv said. ``We want to be the white knight that saves Refco customers.''
I think GFT is right to spread word of NFA's fine against FXCM for fraud. If the brokers compete with each other, each broker arguing that his company is less fraudulent than the other guy's company, then this can only benefit customers and also the entire industry. GFT's previous postings were obnoxious repetitive spam, deserving nothing but derision, but this more recent posting is a very positive and informative step in the right direction, and it should be encouraged as a good and educational way for a broker to state its case.
As an official GFT representative, please know that GFT did not post this information about Refco. It is not our company practice to belittle any of our competitors or highlight negative press about them. After all, we are based in the Midwest and practice Above All Integrity throughout our company. For clarification purposes, there is a company out there with the name Global Futures, which is NOT an affiliate of GFT. GFT's parent company is called Global Futures & Forex, Ltd. and Global Forex Trading (GFT) is a division of GFF.
gotcha, thks for clarification, i read about GFT in Profit&Loss every month and they did seem to me to be a better company than that!