No. Bennet was never a trader. He was just hiding the uncollectable loss. Maybe it was acustomer he brought in and let get in over their heads and the other partners told him he had to eat it. Maybe it was VN. He had big losses then and Refco sold out his stupid put position at the very bottom.
It is one thing to stand behind your clients, it is quite another to commit "fraud" (shuffling receivables, and paying a hedge fund to lie about it), if this is a true client loss, then why pay some other hedge fund to lie about it? I fear there is something more sinister at play. Especially given the size of the loss ($430M), an amount that based on the Refco's operating capital today ($600+M), if on a house account, could technically render Refco insolvent back then. All I can say that this is not over, not by a long shot. Keep in mind that DE Shaw suffered a $360M loss in '98 as well, and forced BofA to write off $250M as a result of it. A similar loss, if happened to a smaller broker / dealer (for instance, Refco), one that doesn't have the balance sheet of BofA, would bring it to its knees.
it's hard for me to believe he thought this wouldnt be found out though. They never should hsve gone public. Public FCM's have never worked out.
As I have said, it is just a conspiracy theory, that's all. I just have a sneaky suspicion that Bennett is going far beyond just to cover up a client loss.
Yea I agree. I think they are toast. It sucks for futures traders beause they are one of the largest. Most of that business will stick around but some of it is bound to dissappear.
If the money is/was as you say, then RFX could not of gone on todate...even if you were correct..RFX has maintained and grown over the years and is world wide. At this time the news we are getting is not accurate. I like your theory(s)..good reading...but does not make (cents) hopefully some of you have taken advantage of the option puts today...gave good money almost immediately.. w
Refco sure has survived a lot of shitstorms in the past. The other houses are probably throwing parties right now though.
I have already gotten more than a few "told you so" messages already. I am a Refco customer, know some of the people there pretty well.
It's all part of the mystique. You have to get used to people hting you anyway if you are successful. I've thohgt they were going out a couple other times. They've always come back.
are you saying you were warned of this stiuation.. to receive "I told you so" implies prior... are you referring to the staff letter that has now surfaced? Is your relationship with staff personally? or just on the phone client bases? Some things are best left unsaidl. conspiracy theory - a group of persons goes out and continues to give negative news when in reality they are part of a fund or corporation looking to buy off the feeding frenzie.... w