This could turn out ok for customers who had accounts with him. I am not saying that it will turn out ok, but it easily could in my opinion. The reason is that the bankruptcy petition lists assets as exceeding liabilities by potentially (ranges are used) hundreds of thousands of dollars. This petition was drawn up by Russ Jr. and his lawyers *after* they learned that the money was missing in the U.S. Trust account. Now conceivably he had legal advice not to write down the U.S. Trust account yet. But I doubt that. Even still, liabilities to brokerage customers will come ahead of liabilities to other creditors. If the bankruptcy petition amounts are roughly correct, then there is hope of a rapid sale of PFG's brokerage business in one piece and we could all be back trading those accounts quite soon. Efforts need to be made to quickly realize the value of all PFG assets by selling them before they lose value. This will likely be the priority of the trustee. I hope that preoccupation with the criminal and regulatory aspects does not get in the way of maximizing recovery. It should not.
Specificallyâ¦, what are you calling an asset vs a liability? Are you implying there potentially to restore the customer accounts?
The bankruptcy filing summarizes assets at "$500 million to $1 billion", and liabilities as "$100 million to $500 million". I sincerely hope that they did not enter them backwards by mistake but I doubt that. It does not break them down. But *if* the filing is accurate then yes, there may be the possibility to restore customer accounts since brokerage accounts will have priority over other liabilities. We may have to wait for the first report from the trustee to see what potential he sees. I suppose that it could take a long time to realize the sale of the assets since some are real estate etc. But it is interesting that the PFG web site and platform have been kept active. They are still keeping quotes live etc. Maybe they have just not got around to cancelling the quote subscriptions but this does preserve the ability to sell them.
Everyone needs to pull their statements right away, you'll need them in the claims process. Pass the word around the message boards.
If anyone wants to see just how complex this can become and how those complications can put segregated customers far back in the pecking order in a bankruptcy check this out. http://www.scribd.com/doc/81511822/MF-Global-Issues-and-Proposals
Does bankruptcy court see customer accounts as a liability or asset? I doubt ( but am very hopefully) that PFG has such assets as I doubt weasledorf would have attempted suicide if that were the case. He would have simple sold off or refinanced such assets and made balanced his books.
Customer deposits are a liability. He would have gone to jail for the fraud either way, regardless of how brokerage customers make out in the end.
True, although of course MFG was liquidated in an unfavorable way for brokerage account holders under chapter 11 (over which there was an immense controversy). Chapter 7, under which PFG is being liquidated, gives priority to futures brokerage account customers over all other creditors.