END OF PREVIOUSLY DELETED POST My post intended to use humour to make a deadly serious point. I was trying to show the absurdity of Apex Capital's latest argument, that the fact that one customer got his money back proves that Refco futures accounts are safe. The facts are exactly the opposite. The famous Jim Rogers alleges he deposited hundreds of millions of dollars, of client funds, into the Refco futures unit's segregated customer funds, just in the past few weeks, but then, Refco embezzled the money by transferring it to a non-segregated account in another Refco entity that went bankrupt, so that the money is gone and Jim Rogers can't get it back. The Jim Rogers allegations disprove everything Apex Capital has been telling us, in various EliteTrader threads, about Refco futures being a safe place to deposit funds. The Refco futures unit has a long history of embezzling segregated customer funds, which is documented in its CFTC enforcement history as far back as 1994. Refco was previously able to use those embezzled funds to cover debts so as to remain afloat long enough so that they could later return the embezzled funds to the segregated customer accounts. I suffered a lot of personal attacks, in retaliation for my warning that this always exposed customers to the risk that embezzled "borrowed" funds would someday not be returned in the event of a bankruptcy. They told us, through Apex Capital, through much of October, in many EliteTrader threads, that this was impossible, but then within days, the headlines told us that the impossible had just happened. I got no apology from Refco or Apex Capital. They instead instigated EliteTrader censorship of my criticisms, even though the headlines proved that I had been absolutely correct all along. So the question now is, why did EliteTrader help Refco to mislead us about these dangers? Why was my posting deleted? What are the rules? Did I break the rules? Are the rules made up as we go along, simply to protect the guilty? Are there any rules? Will postings be deleted, simply because they challenge the constant stream of dangerous lies, spread by Refco or other frauds, on EliteTrader bulletin boards? Do Refco and other fraudulent brokers have the ability to use EliteTrader to accomplish their fraudulent schemes and public relations goals? Do Refco and other fraudulent brokers have the ability to get posts deleted and threads closed, just because those threads and posts challenge brokerage frauds? [/QUOTE] The hope is that there is a forum which would remain uncensored that would allow for the debate of topics, albeit somewhat heated sometimes. It is unfortunate for me that I didn't find this very forum sooner as I wouldn't have used Refco as a broker if I had an opportunity to read the dialog regarding this company on here. I would have chosen a different broker just because there was so much controversy about Refco that in retrospect was valid criticism of an apparent systemic problem in Refco. If the sometimes unpopular comments of a poster are censored it doesnât allow true discourse on a topic. The education and knowledge that is made available here would be sorely missed if it were censored.
thewoodcutter, Your post makes incorrect and unreasonable assumptions. I certainly am prepared to entertain other viewpoints as to how hundreds of millions of dollars disappeared like a fart in the wind. I think it was unreasonable for you to assume otherwise. I don't think that the HOW or the WHY of the disappearing funds are terribly important to my argument. I think it would be prudent, based on the known facts and the allegations, to drain one's Refco account first, and then ask questions later. I think it would be prudent to adopt the approach I have been urging, of performing a due diligence investigation whenever one selects a broker. I think the situation dramatically disproves the assurances we have been getting from Refco promoters, and confirms the validity of my previous warnings. Yes, there are some uncertainties, but there is no reward for gambling upon them, and they don't undermine my argument. You were also wrong to say that I advanced a "conspiracy theory" that ET is intentionally aiding in fraud. I don't believe, and I did not say, that ET is intentionally aiding fraud or other wrongdoing. The word "conspiracy" implies intentional wrongdoing, which I do not attribute to ET. My accusation is that ET has acted unreasonably and carelessly and lazily, with respect to censorship. My accusation is that this unreasonableness and carelessness and laziness has the RESULT of aiding the frauds, but not the INTENT of aiding the frauds. You, thewoodcutter, simply assumed that I was accusing ET of bad intent, because you are not willing to consider my contributions with an open mind. This says more about you than about me. My criticism of ET is that it should explain why my post was deleted, and that it should clarify and re-think its censorship policies, so as to make sure that ET does not again unintentionally render aid and comfort to scammers and frauds. You say that it is pointless to debate with me, but you never made the effort! You are the one with a closed mind, sir. You never made an attempt to debate with me, because your mind is closed. Why don't you give it a try? Maybe you or I or both of us or others would learn something from a healthy debate. Maybe a healthy debate, between people who respect each other despite their differing opinions, would be more productive than your approach of dismissing people who think differently from you, or who appear to think differently from you. I know I have learned a great deal of value from participating in these debates about Refco, and I have received expressions of gratitude from others who learned important things from me. 2cents, in particular, came up with a lot of very interesting links from which I learned a great deal. Why not open up your mind, and try to understand different viewpoints, and debate them, and learn? You will find that healthy debate benefits the mind, the soul, and the bottom line.
Ran across this interesting (but old) CFTC action concerning Refco. Hope it hasn't been posted yet: CFTC News Release 4452-00 (CFTC Docket No. 99-17) For Release September 27, 2000 CFTC ACCEPTS SETTLEMENT OFFER OF FORMER REFCO FLOOR BROKER LISA BUDICAK IN CONNECTION WITH ORDER-TAKING AND RECORDKEEPING VIOLATIONS CFTC Orders Budicak to Pay A $20,000 Civil Monetary Penalty And Conditions Any Future Registration For the Next Four Years WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today the issuance of an order on September 26, 2000, accepting the offer of settlement of Lisa Budicak, a formerly registered floor broker, of the Chicago area, to resolve a CFTC complaint filed against her on September 30, 1999 (see CFTC News Release 4317-99, September 30, 1999). The CFTC order finds that from at least January 1994 to December 1995, while employed by Refco, Inc., a registered futures commission merchant, as a phone clerk at Refcoâs treasury bond desk at the Chicago Board of Trade, Budicak committed order-taking and recordkeeping violations in connection with a trade allocation fraud carried out by a former Beverly Hills introducing broker, Capital Insight Brokerage Inc. (Capital Insight), and its owner and president, S. Jay Goldinger. Budicak neither admits nor denies the allegations of the complaint or the findings in the order. Specifically, the CFTC order finds that from at least January 1994 to December 1995, Budicak, who was registered for most of the time as a floor broker, wrote orders placed by Goldinger for Refco customers without obtaining account identification from Goldinger at the time the orders were received. In addition, the order finds that she also filled in account identification on orders already executed without such account identification and changed the account identification on orders already executed. The order finds that as a Commission registrant and a member of a contract market, Budicak was responsible under the Commodity Exchange Act (CEA) and CFTC regulations for properly preparing customer order tickets, and that she knew that specific account identification was required to be recorded on an office order ticket immediately upon receipt of the order from the customer. The order further finds that Goldinger allocated trades among his customers by providing Budicak and the other phone clerks with the account numbers for the trades that were executed without account identification or by asking Budicak and the other phone clerks to change the account identification on trades already assigned to a customer account. The order finds that Budicak, as a Commission registrant, directly violated the section 4g of the CEA and CFTC regulation 1.35(a-1)(1), and that, as a result of Budicakâs conduct, Refco violated the recordkeeping requirements and thus, Budicak aided and abetted Refcoâs violations of section 4g and CFTC regulation 1.35(a-1)(1) and 1.35(a-1)(2), pursuant to section 13(a) of the CEA. Budicak to Pay $20,000 As A Civil Monetary Penalty Budicak has consented to the entry of the CFTC order that makes findings that she violated, and aided and abetted the violations of, the CEA and CFTC regulation set forth above. The CFTC order also: requires her to pay a $20,000 civil monetary penalty; directs her to cease and desist from violating the provisions of CEA and regulation set forth above; provides that for four years from the date of the Order, if Budicak registers with the CFTC, her registration will be conditioned and her trading activity will be supervised and subject to weekly review; and prohibits her from certain futures- and options on futures-related activities for three years. The CFTC Has Filed & Settled Related Actions Against Goldinger, Capital Insight, Refco, and Refco floor brokers Constantine Mitsopoulos, Margaret Dull, and Richard Marisie On August 31, 2000, the CFTC issued an order accepting the settlement offer of Refco floor broker Constantine Mitsopoulos, who was named in the same complaint with Budicak. The CFTC order found that Mitsopoulos failed to supervise diligently the Refco phone clerks handling Goldingerâs orders and committed recordkeeping violations. Mitsopoulos was ordered to pay a $1,000,000 civil monetary penalty and to comply with his undertaking never again to apply for registration with the Commission (see CFTC News Release 4439-00, August 31, 2000). Mitsopoulos neither admitted nor denied the complaint's allegations or the order's findings. On April 10, 2000, the CFTC issued an order accepting the settlement offers of Refco phone clerks Margaret Dull and Richard Marisie, who were named in the same complaint with Budicak. The CFTC order required Dull and Marisie to pay $15,000 each in civil monetary penalties and restricted their floor activities for a two-year period in connection with similar recordkeeping violations. (see CFTC News Release 4393-00, April 10, 2000). Dull and Marisie neither admitted nor denied the allegations of the complaint or the findings of the order. On November 12, 1999, the federal district court for the Central District of Los Angeles entered a consent order of permanent injunction and other equitable relief against Goldinger and Capital Insight based on the fraudulent allocation scheme in a related action (see CFTC News Release 4335-99, November 8, 1999). On December 13, 1999, Goldinger pled guilty in federal district court to wire fraud in connection with the fraudulent allocation scheme. On May 24, 1999, the CFTC filed and settled a related action against Refco, charging order-taking and recordkeeping violations and a failure to supervise in connection with the trade allocation scheme and requiring, among other things, payment of a $6 million civil monetary penalty and an internal review of Refcoâs compliance policies and procedures (see CFTC News Release 4269-99, May 24, 1999). Refco neither admitted nor denied the findings of the order.
Why would such information be sorely missed? Do you usually conduct your "due-diligence" off of an Internet message board? You are sadly mistaken to believe that this website is full of accurate and objective posters that have no axe to grind, let alone that the fundamental issues that you have raised are exclusive only to REFCO. I have pointed out since day one that there is a big difference between a segregated futures account and that of an unregulated account, be it at REFCO or any other FCM. Yet, that distinction has conveniently gone unnoticed because it does not fit in with a resident basher's agenda . . . a highly obsessive agenda I might add that has not gone unnoticed by Baron or other members of ET.
Leave it to this particular basher to have Baron re-open this thread, only to then link ET with helping REFCO to mislead people and perpetuate a fraud. I must say, that is some very twisted logic. Go figure.
So what if he does? This is as good a place to get info as any mainstream media outlet, that's for sure.
Given the logic that one particular poster has displayed throughout these REFCO threads, I would suggest that obtaining information from a mainstream media outlet like ET soley in order to make a decision on placing personal funds or client monies with a particular FCM would not be conducting one's fiduciary duty in a prudent manner.
EliteTrader is a tremendously valuable marketplace of ideas and information, through which amateur and professional traders, whether new or experienced, obtain extremely useful information about all kinds of issues vital to their trading. This most especially includes the performance of due diligence in the selection of brokers. I am not aware of any other source of information even remotely capable of substituting for the indispensable role played by EliteTrader. Much of the info on EliteTrader is bogus, not because of any fault with EliteTrader, but because this is the essence of human nature and community; but anyone with a brain can, with time and effort and healthy debate, learn to distinguish the truthful and helpful info, from the fraudulent and destructive. It is regrettable that so much pressure, abuse, and threats have been applied to individual ET members, and to those administering ET, to stop the process of healthy debate, by which truth is separated from fiction.
Now, Apex, don't mislead people, shame on you. You know full well that I accused ET of unintentionally helping frauds, via ET's careless censorship, and so I have asked for changes in the way ET applies censorship. Please don't try to mislead people into thinking that I accused ET of intentionally helping frauds.