MF Global: customers with warehouse receipts get 72%

Discussion in 'Retail Brokers' started by m22au, Dec 18, 2011.

  1. m22au

    m22au

    http://online.barrons.com/article/S...tml?mod=googlenews_wsj?mod=googlenews_barrons

    The Silver Rush at MF Global
    Investors are furious that they can't get back the gold and silver they stashed with the failed brokerage.

    Also here
    http://jessescrossroadscafe.blogspot.com/2011/12/attempt-to-seize-and-liquidate-customer.html

    "The trustee overseeing the liquidation of the failed brokerage has proposed dumping all remaining customer assets—gold, silver, cash, options, futures and commodities—into a single pool that would pay customers only 72% of the value of their holdings. In other words, while traders already may have paid the full price for delivery of specific bars of gold or silver—and hold "warehouse receipts" to prove it—they'll have to forfeit 28% of the value. "
     
  2. Barron's made a big deal about this, this week.
    But if you think about it, the Trustee isn't giving any MF Global account holder ANY priority.... not even if you hold a physical gold/silver position.
    It would make sense to me.

    I have an account with them ( in cash ) and have had it transferred (60%) by the Trustee over to RJ O'Brien.

    Why should anyone else ( like someone with a precious metals position ) get PRIORITY?
     
  3. . You're talking about a group of people that may already be nuts.
     
  4. Wow. It's one thing when MF steals customer segregated money. Now the government trustee is doing the same with a different type of segregated asset that even MF couldn't touch??? The lack of prosecution and blatant theft here really spell the end for US markets IMO. How can you function/trade in a system this corrupt? I don't see much option but to cash out and hold real estate or physical commodities.
     
  5. asap

    asap

    wtf are you talking about?

    clients are getting their fair share of the settlement. too bad they lost money but that's risk of doing business with a third party, either a broker, bank or government.

    you can have a ton dollar bills under your mattress and then one day there is fire and all your money is gone. what are going to say then? fire stole your money?
     
  6. There's a difference between you putting your money under a mattress in a building that caught fire and you paying someone and they put your money under a mattress in a building that caught fire.
     
  7. MF Global clients got hit by a black swan, in that no one has lost money like this before.

    But it shouldn't have been unexpected, traders should always be aware that if a firm or the entire financial system collapses they might lose their entire accounts. MF Global clients are currently only getting back 72%, that is very bad, but it could have been a lot worse.
     
  8. clacy

    clacy

    I don't think anyone is saying that collapses and black swans don't happen or that they can all be prevented. Rather, I think the point is that MF Global execs need to be PROSECUTED some how, some way. These men need to go to jail for a very long time, so as to send a message to the market place that if you don't live up to your responsibilities, you'll face hard time.
     
  9. No bailouts for MF traders like those at Goldman Sachs got. Not surprising.
     
  10. what needs to be distinguished is Bankruptcy

    bankruptcy doesn't distinguish between type of company/business, it just is
    point being that Any creditor can argue a claim to Any funds the bankrupt still
    has available including disposal of assets

    72% appears to be the amount of All Money Available to disperse, which works
    out to 72% of orginal client funds' amounts, 72% of any claim

    at some point in the future, after all the various lawsuits are ended - against the
    CME for instance, it's probable/possible that all clients will receive all their funds
    repaid, the major fault is that FCM's client funds are not insured

    "The Canadian Investor Protection Fund applied for a bankruptcy order for MF
    Global Canada on Nov. 2. The Ontario Superior Court granted an order allowing
    KPMG to make the cash payments, according to the statement."
    although I've not read anything to confirm it, I presume that all Canadian MFG
    clients received all of their accounts funds via transfer to other brokers
    also I think that that only CIPF made a claim against MFG C, not sure if the
    Canadian regulator - IIROC was involved in the order, or, if anyway the CIPF
    would have been regarded as the First creditor ahead of all others, but the CIPF
    and other insurances are usually 'person of last resort' after all other means of
    recovering funds have been exhausted
    CIPF's action was to prevent any claims being made on the insurance fund

    the CIPF insures up to $1M of client funds at any type of broker, and some
    brokers offer higher amounts of insurance
    http://www.cipf.ca/homepage.aspx
     
    #10     Dec 19, 2011