I checked the NFA report and it seems they got $150M in excess capital after their equity raise back Sep. Anyone knows whats the total deposits they hold and where they put the deposits(bank)?
A failed broker/clearing house has definitely been a concern of mine. If it can happen to Refco it can happen to anyone. And then there's MF Global. Scary times man! If your futures broker goes belly up is there a way to get your money back? Probably not. Take the money out and put it in the bank? Yep, they may go too. How about the mattress?
NO forex broker is safe in bankruptcy. Your money goes into the liquidation process, so you'll have to wait a couple years, hire lawyers to only get a small % back. Google about "priority claims" in bankrupcy and regulated markets
NFA notice: âThe transactions you are entering into with [Member] are not traded on an exchange. Therefore, under the U.S. Bankruptcy Code, your funds may not receive the same protections as funds used to margin or guarantee exchange-traded futures and options contracts, which receive a priority in bankruptcy. Since that same priority has not been given to funds used for off-exchange forex trading, if [Member] becomes insolvent and you have a claim for amounts deposited or profits earned on transactions with [Member], your claim may not receive a priority. Without a priority, you are a general creditor and your claim will be paid, along with the claims of other general creditors, from any monies still available after priority claims are paid. Even customer funds that [Member] keeps separate from its own operating funds may not be safe from the claims of other general and priority creditors.â
my point is, the got a $150m cushion to absorb withdraws without having to liquidate the clients cash assets(whatever they put the clients funds at, be it CDs, money market funds, whatever) I was worried about them but that $100m equity raise reassured me a bit