IMO the analogy is a bit of a non-seq. US exchanges are hybrids w.r.t. regulation and it's too much of a smear to allow it to happen. The MF debit is too big to absorb, so it will likely be the first. On another note, nobody is going to find/disgorge where Wasendorf hid the cash because he pissed it short W and short gamma in SPs. He may have put some into that Romanian RE deal, but the guy was driving a Cavalier! My guess is that the philanthropy was justified as Robin hood-esque and that he didn't shelter it. Pissed in the mkt or philanthropic. I think it's time the NFA tacked an additional dime on each trans. It's time to pass the cup around. It's the least we can do for a little peace of mind.
Atticus, can you elaborate on the "US" part of it?...Did foreign institutions, individuals of US FCMs lost money over the years? I know that in the case of a bankruptcy, different rules apply to : 1- Segregated funds to trade US futures 2- Secured funds to trade foreign futures 3- Account used to trade swaps But when it comes for example to segregated funds, in the case of a bankruptcy, there is no difference between "customers", US or foreign. They contribute pro-rata to the customer money missing, from what I am reading on the NFA website. Perhaps the European trader with a big secured account to trade LIFFE will be more impacted than the US guy trading CME on seg funds, but it seems there is no difference between the US guy trading CME and the foreign one. I am really asking 'cause I am scared.
First in time or first in order( pro-rata between US then pro-rata between non-US with what is left ) for the same class of accounts? I think they make the segregated funds whole first( dedicated to trade US futures, hold by US and non -US ) and then secured funds( dedicated to trade foreign futures, hold by US and non US ) with what is left.
I am a Canadian with a PFG account. Recent communication said 90% of accounts have been liquidated and emails have been sent out with balances. I have yet to receive mine. Anyone with PFG accounts please post what you are experiencing!!!
Ah ... so now we have exceptions. I can tell you that institutional US clients of Lehman that missed literally a few sentences in account agreements (they are big boys and should not have) lost hundreds of millions of dollars that they do not want to publicize (I'm not suggesting it is a secret) because the agreements allowed their accounts to be administered out of London and UK seg rules were deemed to apply. The overarching reality is that segregation regardless of its pretty solid (but far from perfect) record is Swiss cheese. None of the funds are insured against loss or fraud. What that means is you get your PROPORTIONAL share of what is left (after loss or fraud in that class of funds) but that means it has to be there and sometimes it ain't gonna be there. Hence it is all about counter party risk. Don't be foolish enough to think you are a priority creditor in a bankruptcy or reorg. That is what the industry wants you to believe and it is untrue. You are pari parsu (on equal footing) with the rest of the creditors except you have collateral -- the segregation account. That is not a priority in the capital structure it is a secured obligation that reverts to being a general creditor if account does not pay out 100 cents on the dollar. You are then behind JP Morgan's and CitiBank's secured positions on real assets ... you get to sell off the desks and chairs for fifteen cents on the dollar. That seg account could be like being the holder of a $400,000 mortgage on a house in Vegas that is now worth $200,000. Actually worse -- the house may bounce back over time. Seg accounts do not bounce back they get liquidated. BTW I am not an attorney or an accountant but I did own three seperat brokerage firms in NY, London and Lugano, Switzerlad when I was in my mid twenties. I have a great deal of confidence that I know what I am talking about on this subject. COUNTER PART RISK COUNTS.
I seriously take offence to these statements. You're a potato head. This is not construtive at all, terribly condencending and ignorant. Over 4000 posts and this is how you contribute? What in hell is the matter with you? Anyone trading futures understands that point, you can win or lose on your "bet" however, there shouldn't be a risk with who is the custodian for your funds. I was one of the folks with MFGlobal and now PFGBest. Through no fault of my own, I'm burned, out of my trading funds, locked out and waiting to see if and when i'll see full restitution. You really need to think before posting such incendary statement. Thanks for being supportive of your fellow traders. Now, as far as information goes, the NFA has updates on their site here,,,, http://www.nfa.futures.org/ and the CCC has taken on the PFG Best situation as well, information gets posted on their main page here,,, http://www.nfa.futures.org/
OMG... You were one of the account at MF that got transferred to PFG? I can't imagine what it must be... Hope you get the maximum.
I think that is not the case. You are correct that funds that are received from the liquidation of foreign futures are in a separate account -- A Customer Part 30 account -- but I believe that is a seperate seg account. Imagine a guy that is arbing interest rate differentials between Chicago and London that has a big profit in the foreign instrument (residing in the Part 30 account) and a big enough loss in the US seg account. in theory (although I believe not in practice) he could put the US seg account underwater, the customers ion the US could settle for 80% of their money to avoid protracted litigation and, particularly if he had partners on the foreign end he could walk away with a huge profit there leaving the firm to sue in a foreign jurisdiction. Absurd? Probaly but not a zero chance outcome! Once the seg account is gone the rest leaves you as a general creditor. Could I be wrong ... of course. But like the Kansas City mob boss said when considering whether whack Alan King's character: "why take a chance". Do you really want to hire a law firm to figure this shit out or would you rather keep small money at a couple of weak firms for the low margin requirement, ability to trade liquid futures like ES and 6E 23 hours a day ON DAY TRADING MARGINS (YES THAT DEAL IS OUT THERE!) and keep the real money under FDIC or SIPC umbrellas? So you pay a few $25 wire fees throughout the year ... so what? C'mon guys ... this ain't brain surgery. COUNTER PARTY RISK COUNTS