Some people have asked why the trading will be done, here is one probable cause. Refco is scheduled to release their quarterly results on Oct 17, at this point, having to restate perhaps 30 quarters (7 years) of results, only then can then release their current quarterly results. NYSE can suspend trading on RFX based on the ground that they have failed to release their financial results in a timely manner. This would also deemed "extraordinary" condition, so NYSE would be watching very vigilantly on the developments. I would put a complete halt on the stock at more than 80% chance after Oct 17 at this moment. I think it is unlikely that Grant Thornton or any auditor would certify this quarter's results at this point. They would make sure that their reputation is not dragged down with it (that's how Andersen went down), so as to cross all the t-s and dot all the i-s. I took a couple of Refco and ex-Refco guys out for a drink last night and pumped them for some info, interesting that a few of them are not surprised that Bennett pulled something like this. Apologies for others, I am pulling my accounts out of Refco, I just spent the morning filling out paper works with the other FCM, I will leave a little cash here just to keep it open, but my trading will all flip over soon. My account constitute far too important to me to have it frozen for anything more than 1-2 days. Rufus
Some London Prop firms have advised their traders not to use Refco or their subsidaries to execute any business for them until further notice. Very interesting. Is the ship sinking?
Yeah, here in NY, all the storm brewing is not over Refco possibly going down (they are small in from a NY perspective), but it is YetAnotherFailedIPO. The consensus is that while this won't hurt GS / BA / CSFB in the pocket book too much, it will tarnish their banking image. Trouble with this scandal is that is seems "systematic" (quarterly shuffles, etc), and yet the due diligence didn't even bring up any thing. I know that a few Refco defenders will cringe at this, but a couple of observations. One, based on last night, more than a few of the Refco guys are already sending out feelers to other firms about leaving, honestly, as a friend, my advice is "better to sit out the storm watching than in it". Their options are effectively worthless, and this year's bonuses look like toast as well. Two, what Refco (Bennett) did through the receivable (position?!) shuffle is very similiar in nature with what Ebbers + Sullivan did at MCI Worldcom. Worldcom was shuffling expenditures as capital investments, therefore reducing the cost of operations (and avoiding to write off the expenditures at once), therefore padding the bottome line. Agreed that what Refco did was significantly smaller in size, but similar in nature.
I moved my funds out of the firm yesterday to Globalfutures which use RCG for clearing Is that firm "safe" today ? any comments ? thanks
but fcm and securities operations continue as normal "refco llc and securities substantially unaffected" the regulated parts of the business including segregated account withdrawls and regulated brokerage are business as normal.
But for most of us average folk who trade futures, the "regulatory capital and excess regulatory capital of Refco, LLC, its regulated Futures Commission Merchant, and Refco Securities, LLC, its regulated Broker Dealer, have been substantially unaffected by the events of this week. The business at these subsidiaries is being conducted in the ordinary course including customer deposit and withdrawal of segregated funds." The company continues with Goldman Sachs as a financial advisor and has hired Eugene Ludwig the former U.S. Comptroller of the Currency and former Chairman of the SEC and American Stock Exchange, Arthur Levitt to the board of directors as special advisors. http://biz.yahoo.com/prnews/051013/nyth091.html?.v=27