As Brandon correctly pointed out in an earlier post, this is FALSE. FCMS do not use large amounts of bank line credit to trade futures. In fact, the banks have nothing to do with the performance bond that relates to futures trades and the ECC.
I just went to the Refco "Live Chat" help and pointed out the concern over here on these boards, and they ignored me. They have always replied back within seconds before.
I have had a longstanding clearing relationship with REFCO. I have never had any problems with them, or their service to me as a clearing customer. Your remarks in an earlier post are highly inflammatory and formulated on no basis whatsoever. I asked you why REFCO LLC ( which is distinct from Refco Holdings ) would shut down and you did not offer a credible answer . . .
Excuse me, but REFCO would not be the first company to ever have to restate their financial statements. The $1 Billion dollar figure in EQUITY comes from Refco LLC itself in a personal phone call to me and can be verified by recent newspaper articles and other financial documentation.
Sure, I always rely on newspaper articles before I put out an IPO or to do my DD. Your agenda is clear, Refco apologist. The lawyers will take them to the cleaners, IMO.
As I stated earlier in the past when I was looking at opening an IB I looked at Refco, I did not go with them. Later as I was starting to manage client accounts in the futures market I dealt with a number of people at Refco and I found them all to be above board, honest, hard working and with a lot of integrity. Unfortunatly current events with the company would cause me to close any account I have with them, at least for the time being. If everything works out, great, then come back. However, if you look at everything happening with Refco, the CEO being arrested, a hedge fund being paid to lie for them etc then serious questions have to be raised. IMHO keeping an account with Refco at this point is a little bit like fucking a hooker who never uses protection bareback and thinking you are going to be safe even as you look at the festering sores on her snatch. Honestly the odds are that you will be fine, but do you really want to take that chance? If you do your nuts! IMHO having an account with Refco, while not exactly this dire, is similar. Also, it is my opinion that any IB who currently clears with Refco should be having a serious look at switching in the interest of performing their fiduciary obligations towards client, but again this is only my opinion. Brandon PS, I do not have a relationship with Refco nor am I short the stock, nor do I know of anyone who is.
No apologies necessary, arsehole. I was simply addressing the fears that some REFCO customers have on this thread about their accounts at Refco LLC. As anyone that is able to read in a clear and objective fashion can see, I have never even commented on the behavior of ousted CEO, Phillip Bennett, nor have I defended him. However, you obviously have an agenda and an axe to grind as can be seen in your quote, "The lawyers will take them to the cleaners." I have simply commented on the fears and highly inflammatory remarks ( let alone flat out incorrect statements ) made by others on this thread. I am sorry that your agenda and bias prevent you from seeing that. I suggest that if anyone is uncomfortable with a significant amount of cash in a trading account at REFCO LLC., then simply reduce your capital exposure and ask for a check to be cut. Simple as that.
The CIPF (Canadian Investor Protection Fund) insures accounts in Canada to the amount of $1000 000. The firm must be a member of CIPF, which I'm sure Refco is. (whether this applies to a FX account, I'm not sure. Look at any disclosure documents they forwarded to you) CDIC insures accounts at chartered banks up to $60,000. I don't think the issue is whether you will suffer a financial loss if Refco goes down. It is more an issue of having your capital frozen until the regulators can sort out the mess.
Conspiracy? Here they are in late 90s cooking a loss to beat reporting it. NOTE, this is a fact that was not material to the outcome of the case. Also it was only 28M. "Now it is true that for reasons having to do with reporting requirements imposed by the commodities exchanges, Refco did not want to reveal the debit in Eastern's account, and that is why it funded it with a loan from its affiliate, with which it has a complete identity of interest by virtue of the fact that both Refco corporations are wholly owned by a third corporation. Eastern points us to nothing indicating that what Refco did was illegal, however, and the jury was not required to find, and did not find, that it was a fraud against Eastern... ." http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=7th&navby=case&no=992362 Lo and behold this cockroach let Hillary run her comod trade over margin and paid a fine for it too. I could maybe find some more but I only had 5 minutes to look. Geo.
Well said. I consider the board have acted swiftly and properly in this matter and at this stage I can see no reason to move or indeed reduce any accounts with them. I won't be.