Oldtrader, I believe that yesterdayâs Wall Street Journal vindicates and proves correct the arguments I made in our debate on this thread. WSJ confirms that Refcoâs hidden +$400 million receivable was indeed, just as I suspected, the result of lax risk management resulting in customer trading losses in Refco, L.LC., the futures broker, not its parent holding company. These losses were transferred to the parent company as part of a scheme to hide them. You are a respected contributor on ET, so that if you would reconsider and retract your endorsements of Apex Capitalâs arguments, you might help others avoid financial ruin. Quote from Apex Capital: Quote from zdreq: Quote from oldtrader: Quote from oldtrader: Quote from oldtrader, addressed to Apex Capital: Quote from oldtrader: Quote from jimrockford on Oct. 15, 2005: Quote from oldtrader: Quote from Oct 21, 2005 Wall Street Journal as supplied by range:
Lets change the direction of this debate...the Flowers bid is a done deal and the IB bid will never be excepted due to the massive differences between the two companies - even if they raise their offer. Money has started to flow back into Refco over the past two days and banks/brokages are claiming trades from Refco again which in turn means normal service can be offered. The accounts who wanted their money back have now taken it and opened new accounts with the Fimat etc of this world. Maybe these guys would have gone anyway with the CIS/Refco take over which they may have been unsure of. So..if the big boys are starting to play again why not the little fish which live on this ET site? IF the outflow of money has stopped and money is on the way back in to Refco, what would it take to get people to trade with Refco again? Just a few thoughts..
Actually... let's not. I was wondering about Apex and the others whose ridiculing of those who voiced their concerns continued even as the latest facts came to light. It now seems clear that a lot of the things that these posters said would/could never happen are actually happening. It's a credibility issue. At first I was with those who said that hell will freeze over before anyone loses money out of a segregated account. I still want to believe it but I don't know for sure. As a trader with a comparatively small account, the outcome of this episode is of extreme interest to me. I'm not sure that it's time yet to move on from the dissection of what has actually happened at Refco. Perhaps you can start a new thread if you want to pursue a new line of debate. Maybe you could call it 'Return to Refco?' or something like that. I for one am interested in the responses that may or may not be engendered by jimrockford's last post.
It sure isn't time and it isn't anywhere near over. You can read that complaint on the internet in less than 1 minute. It's 6 pages long - near real time prosecution of white collar crime some commentators have said - something spit out fast to pop the CEO before he could flee the country. Wait till we see the behemoth that's coming once the investigation is done. Refco was dirty. Had been for a long time. That's going to be the real story here. Also, they only had to list their 15 largest creditors to file, I think. They still have to list them all very soon. That will be interesting.
The fifty largest creditors are on this filing http://bankrupt.com/refco.txt ----------------------------------------------------------------- [00005] LIST OF REFCO'S 50 LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Entity Claim Amount ------ ------------ Bawag International Finance $451,158,506 BAWAG P.S.K. Bank fur Arbeit und Wirtschaft und Osterreichische Postsparkasse Aktiengesellschaft Sietzergasse 2-4 A-1010 Vienna, Austria P: +43/1/534 53/3 12 10 F: +43/1/534 53/ 2284 Wells Fargo $390,000,000 Corporate Trust Services Mac N9303-120 Sixth & Marquette Minneapolis, MN 55497 P: 612-3 16-47727 Attn: Julie J. Becker VR Global Partners, LP $380,149,056 Avora Business Park 77 SADOVNICHESKAYA NAB. BLDG. 1 Moscow, Russia 115035 Rogers Raw Materials Fund $287,436,182 C/O Beeland Management 141 West Jackson Blvd., Suite 1340 Chicago, IL 60604 P: (312) 264-4375 Bancafe International Bank Ltd $176,006,738 Carrera 11 82-76 Segundo 2 Bogota, Colombia P: 636-4349 - and - Bancafe International Bank Ltd 801 Brickell Ave. Ph1 Miami, FL 33131 P: 305-372-9909 F: 305-372-1797 Markwood Investments $110,056,725 Via Lovanio #19 00198 Rome, Italy Capital Management Select Fund $109,009,282 Lynford Manor, Lynford Cay Nassau, Bahamas Leuthold Funds Inc $107,264,868 Leuthold Industrial Metals, LP 100 North 6th Street Suite 412A Minneapolis, MN 55403 P: 612-332-9141 F: 612-332-0797 Attn: David Cragg Rietumu Banka $100,860,048 JSC Rietumu Banka Reg. No. 40003074497 VAT No. LV40003074497 54 Brivibas str Riga, LV-1011 LATVIA P: +371-7025555 F: +371-7025588 Cosmorex Ltd $91,393,820 CP 8057 28080 Madrid, Spain P: +34-607-745-555 F: +34-667-706-622 BCO Hipotecario Inv. Turistic $85,807,030 (Fidelicomiso Federal Forex Invest) Av Venezuela Torre Cremerca, Piso 2 Ofici B2 El Rosal Caracas, VENEZUELA VR ARGENTINA RECOVERY FUND $77,710,311 Avrora Business Park 77 Sadovnicheskayanab BLDG 1 Moscow, 115035 Russia Rogers International Raw Materials $75,213,814 c/o Beeland Management 141 West Jackson Blvd., Ste. 1340 Chicago IL 60604 P: (312) 264-4375 Creative Finance Limited $65,111,071 Marcy Building, Purcell Estate P.O. Box 2416 Road Town, British Virgin Islands Cargill $67,000,000 PO Box 9300 Minneapolis, MN 55440-9300 P: (952) 742-7575 F: (952) 742-7393 JWH Global Trust $50,576,912 c/o Refco Commodity Management Inc. One World Financial Center 200 West Liberty St., 22nd Floor New York, NY 10281 RB Securities Limited $50,661,064 54 Brivibas Street LV-1011 Riga, Lativa P: + 371 702-52-84 F: + 371 702-52-26 PREMIER TRUST CUSTODY $49,365,415 ABRAHAM DE VEERSTRAAT 7-A CURACAO, NETHERLANDS ANTILLES London & Amsterdam Trust Company $47,560,980 PO Box 10459 APO 3rd Floor Century Yard Cricket Square, Elgin Ave. Grand Cayman, Cayman Island Stilton International Holdings Trident Chambers, Wickhams Cay P.O. Box 146 Road Town, British Virgin Islands $46,820,415 Refco Advantage Multi-Manager Fund Futures Series $41,713,723 c/o Refco Alternative Investments Group One World Financial Center 200 West Liberty St., 22nd Floor New York, NY 10281 Banesco Ny Banesco Banco Universal C.A. $39,596,609 Av Urdaneta, Esquina El Chorre, Torre Untbanca Caracas Venezuela Josefina Franco Sillier $32,862,419 Carretera Mexico-Toluca No. 4000 Col. Cuajimalpa D.R. 0500 Mexico Rovida $32,831,461 London & Amsterdam Trust Company PO Box 10459 APO 3rd Floor Century Yard, Cricket Sq. Caja S.A. $30,950,115 Sarmiento 299 1 Subsuelo (1353) Buenos Aires, Argentina P: (54 11) 4317-8900 F: (54 11) 4317-8909 Global Management Worldwide $28,976,612 Trident Corp. Service Floor 1 Kings Court Bay St. PO Box 3944 Nassau, Bahamas Abadi & Co. Securities $28,046,904 375 Park Avenue, Suite 3301 New York, NY 10152 P: (212) 319 -4135 Refco Winton Diversified Futures Fund $27,226,697 c/o Refco Global Finance One World Financial Center 200 West Liberty Street, 22nd Floor New York, NY 10281 Pioneer Futures, Inc. $25,932,000 One North End Ave., Suite 1251 New York, NY 10282 Daichi Commodities CO., LTD. $24,894,833 10-10 Shinsen Cho, Shibuya-Ku Tokyo, I5O-0045 JAPAN GS Jenkins Portfolio LLC. $24,631,959 c/o Refco Capital Markets One World Financial Center 200 West Liberty Street, 22nd Floor New York, NY 10281 Winchester Preservation $23,349,765 c/o Joseph D, Freney Christiana Bank & Trust Co. 3801 Kennett Pike, Suite 200 Greenville, DE 19807 BANCO AGRI BANCO AGRICOLA (PANAMA) S.A. $22,314,386 EDIFICIO GLOBAL BANK #17, LOCAL F, CALLE 50 PANAMA, PA - and - BANCO AGRICOLA, S.A. 1RA. CAKKE PTE. Y 67 AV. NORTE FINAL BLVD CONSTITUCION #100 SAN SALVADOR, ES Peak Partners Offshore Master Fund Limited $22,205,344 PO Box 2199 GT Grand Pavilion Commercial Center 802 West Bay Road Grand Cayman, Cayman Islands Arbat Equity Arbitrage Fund $19,106,989 Trident Corporate Services 1st Floor Kings Court Bay Street P.O. Box N3944 Nassau, Bahamas Renaissance Securities (Cyprus) Ltd. $17,820,709 2-4 Arch Makarios 111 Avenue Capital Center, 9th Floor 1505 Nicosia Cyprus AQR Absolute Return $17,482,100 c/o Caledonian Bank & Trust LTD PO Box 1043 GT Caledonian House Grand Cayman, Cayman Islands Geshoa Fund $17,319,494 CORPORATE CENTER WEST BAY ROAD PO BOX 31106 SMB GRAND CAYMAN RK Consulting $14,074,345 7, Kountouriotou Street 14563 Kifissia Greece VR Capital Group Ltd. $13,690,549 AVRORA BUSINESS PARK CALENDONIAN HOUSE MARY STREET NAB 77 BLDG 1 MOSCOW RUSSIA 115035 P: +358 600 41 902 GTC Bank, INC. $12,971,439 CALLE 55 ESTE TORRE WORLD TRADE CENTER PISO 7 PANAMA GUATEMALA P: (507) 265-7371 F: (507) 265-7396 Inversiones Concambi $12,799,137 C/O AEROCAV 1029 P.O. BOX 02-5304 MIAMI, PL 33102 Miura Financial Services $12,150,213 AV. FRANCISCO DE MIRANDA TORRE LA PRIMERA PISO 3 CARACAS VENEZUELA NKB Investments LTD $11,699,430 199 ARCH MAKARIOS AVE 196 Makarios III Avenue Ariel Corner 3rd Floor Office 301 3030 Limassol CYPRUS Tokyo Forex Financial Inc $11,689,354 Shinjyuku Oak Tower, 35th Floor 6-8-1 Nishishinjyuku Shinjyuku-Ku, Tokyo JAPAN Birmingham Merchant S.A. $11,215,413 AV. ARGENTINA 4793 PISO 3 CALLAO PERU BAC International $10,906,506 CALLE 43 QNQUILLO DE LAGUAR PANAMA P: (507) 265-8289 F: 507-205-4031 Total Bank $10,657,732 CALLE GUAICAIPURO ENTRE AV.PRINCIPALDE IAS MERCEDES TORRE ALIANZA PISO 9 EL ROSAL, CAACAS, VENEZUELA P: (0212) 264.72.54/49.42 F: (0212) 266.58.12 Reserve Invest (Cypress) Limited $10,499,733 MAXIMOS PLAZA 3301 BLOCK 3 3035 LIMASSOL CYPRUS Refco Commodity Futures Fund $10,166,045 c/o Refco Alternative Investments Group One World Financial Center 200 Liberty Street, 22nd Floor New York, New York 10281 P: 877 538 8820 F: 877 229 0005
From Reuters, Friday, October 21, 7:08PM Refco's futures brokerage unit is still operating and has not filed for bankruptcy, and one of its key customers, Cargill Inc., said it will continue trading with the business. Cargill is not alone. Jacob Goldfield, a member of the J.C. Flowers & Co.-led group that has offered to buy the futures unit said customers are now staying with the business and that the client base has stabilized. But Refco cautioned in a court filing that time is of the essence, and selling the business quickly is crucial. "Given the fragility of the acquired business, the buyer's commitment to proceed with the sale requires that the sale be consummated quickly," Refco said. J.C. Flowers, led by former Goldman Sachs Group Inc. (NYSE:GS - News) banker Christopher Flowers, offered to buy the unit last week for $768 million after being was approached by Refco. http://biz.yahoo.com/rb/051021/financial_refco.html?.v=2
The Apex Capital argument, advanced here, goes kind of like this. Apex put one round in one chamber of his revolver, spun it, put it to his head, and pulled the trigger. The gun didn't fire, and so, Apex lived. This convinces Apex that his activity was safe. So, in the future, he will continue to engage in this behaviour, and he will continue to launch false accusations, personal attacks, threats, and censorship campaigns against others who advise against this activity. Apex advocates that we emulate him, by continuing to play his game of Refco Roulette, at Refco and at futures brokers other than Refco, using both our own money, and other people's money. He continues to deny the need, identified by both the CFTC and the CME, for due diligence to protect against the risk of embezzlement or customer losses causing broker bankruptcy.
Excerpt of article from today's NYT: Also on Friday, a hedge fund based in Moscow, the VR Group, which was named by Refco as a major creditor, said it would challenge the terms of the bankruptcy filing. VR-related entities were named in Refco's Chapter 11 suit as creditors, with exposure of $472 million, making them Refco's biggest creditor. But Richard Deitz, founder and president of VR, said the money was being held in custody by Refco and as a result VR should not be included in the creditor list. "Those assets are our assets," Mr. Deitz said. "We vigorously reject the notion that any assets form part of the estate of Refco." http://www.nytimes.com/2005/10/22/business/22refco.html
When I read the WSJ article, I do not conclude that the $400MM of losses originated at Refco LLC. The origin was not identified. Maybe it was at Refco LLC, maybe at Refco Capital Markets, which I thought (?) provided prime broker functions, or at a different sub. In a bankrutpcy court, the entity(ies) that accumulated of the losses could have huge importance.