Jimbo suing Refco with "wrongfully and fraudulently'' handling $362 million of their assets, according to theStreet.com http://www.thestreet.com/_googlen/m...291.html?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA Seems to me to be another crack in the supposed firewall of segregated account mechanism.
well, if u take a closer look at refco llc's contractual docs, its not so surprising after all...: http://www.elitetrader.com/vb/showthread.php?s=&postid=872581#post872581
I don't follow that comment. To me the clause reads that if I have ANY collateral in ANY REFCO company then I grant them permission to transfer that collateral against any losses of mine in any other REFCO company. Hardly something to make Dick Turpin turn in his grave. I would also wager that plenty of lawyers would have read and approved that clause. However how did this money end up at RCM? My hunch (and it is just that) is that it is not uncommon practice (for $ rich accounts) to ask the holder of funds to earn them overnight income - so if RCM where offering better overnight rates than the banks (or the money had to flow through RCM to get to the banks) then that could be how the money ended up in one of their accounts at time of collapse, that does not excuse RCM for not returning the money (it maybe the banks refused to return it to REFCO as they are securing it against RCM credit lines???) but it maybe a more reasonable explaination than some of the "fingers in pie" theories going on.
-Missed Refco Sales? Catch Goldman- -By James Cramer- -Billions of dollars may have been made taking the tag ends of the trades of the big Refco liquidation. It's so funny that the SEC is so concerned about material information about a company, but not the stock itself. I can't change the law, don't know if I want to, but I want to benefit from those profits, and Goldman Sachs may cleaned up the biggest on this one. - I was not able to cut and paste anymore of the article www.realmoney.com
did u read the highlighted bit going: "From time to time, Refco in its sole discretion..."? i was just surprised to see that sort of statement in the refco llc contract, seemed to me it was v.much at odds with the whole concept of segregated accts... in any case, agree that doesn't answer yr question... there is a good post from rufus_4000 on another thread that pretty much concurs with this theory fyi: http://www.elitetrader.com/vb/showthread.php?s=&postid=872801#post872801 seems like a fairly reasonable guess / assumption...
If the customer funds had been maintained at the regulated futures trading entity, in segregated accounts, then they would have been protected against the broker's creditors, except for customer trading losses in the same pool of customers, and except for customers in the same pool demanding return of their funds. Refco destroyed that protection by holding funds in the wrong place, without full and effective disclosure, so that Jim Rogers became just another bankruptcy creditor, to the great detriment of his clients. I don't see how this can be justified or explained as anything other than embezzlement or fraud. If you were told you were purchasing a senior bond, so that you would be close to the front of the line of creditors in the event of bankruptcy, but then at bankrupcty time you discovered that you were tricked by the fine print of some cryptically and deceptively worded escape clause, and were actually sold a junior bond placing you at the end of the line, how is this not fraudulent? Remember Charles Keating? He went to jail for operating this type of scheme at Lincoln Savings and Loan. He sold mutual funds to little old ladies, by telling them that their deposits were federally insured. They weren't insured, so the little old ladies lost everything in the bankruptcy, and had to eat cat food for protein. Exposing people to credit risks, in excess of what is disclosed or agreed upon or authorized by laws or exchange rules, is just one of many strategies, employed by white collar criminals, to commit crimes legally. It is just a way of putting lipstick on the pig of criminal behaviour. "Nothing is illegal if one hundred businessmen decide to do it." - Andrew Young.
Unless they were Chinese: Then they just ate the cats. <img src=http://www.moggies.co.uk/articles/2003/china_cats.jpg><img src=http://www.canadianvoiceforanimals.org/files/China_Cats.jpg> Chinese cat food
"The Rogers fund says Refco was supposed to have deposited those assets into a segregated customer account at Refco LLC, the derivatives brokerage's futures business, which is not part of the bankruptcy filing. Instead, the money was put into accounts at Refco Capital Markets, the broker's offshore prime brokerage, which is covered by the bankruptcy filing. " now where is that 'your money at segregated account ' is safe guy ?
nkhoi, see the thread entitled "Refco Account Security". It is a very long thread. Read the whole thread. See how that 'guy', Apex Capital, threatened me with lawsuits, and pressured Baron to close the thread.
Baron is his own boss. ET is his website, his baby, and no one is going to pressure him into making a decision about closing a thread. As opposed to you, it is my opinion that he conducts himself in a professional manner and refrains from making baseless claims and assertions about other people's business. Given the BASELESS ASSUMPTIONS and FALSE CLAIMS that you made about my money management business as a CTA, Baron simply chose to close the thread because he could see that you and your frail ego had an axe to grind regarding REFCO and my views on the segregated futures accounts there. You have no one else to blame for closing that thread than yourself. Your claims and assertions regarding my clients and their funds were totally absurd, not too mention the fact that I never once stated that I had client money clearing thru REFCO. I can go on and on about your ranting and raving about REFCO and how segregated futures accounts are treated in the FCM business, but it is purely a waste of time. I also noticed that when I responded via PM to correct your false and baseless claims, you conveniently disappeared and failed to even acknowledge my PM. As I indicated earlier, you obviously have an axe to grind. And for someone that has no relationship with REFCO, you appear (in my humble opinion) to be awfully obsessed with them. Strange.