Someone explain how Jim Rogers became an unsecured creditor when it seems all he did was deposit govt bonds and open positions in futures. Could any other futures customer be declared an unsecured creditor?
don't you all just love the recent Refco ads in "Trader" mag {pg 20 & 21} ---- "NO BOUNDARIES" hahahaha --- i guess not!
I've been enthusiastic about Rogers for a while now. Obviously, he's not perfect and he's made mistakes....but he's made more money in the market than 98% of everyone else out there. I've saved alot of his past articles and commentary. Its really suprising that he could be caught up in this mess. He'll make up any lost portion of his net worth with future stocks, bonds, china plays, fannie mae short, etc. I wonder how things will play out....
is it possible to insure accounts against bank and broker seizure or theft through a 3rd party, not fdic/sipc? if so what are the rates?
I still would like to know how Jim Rogers became an unsecured creditor when his funds and positions were supposed to be segregated? Can a futures broker going BK similarly hijack customer accounts by claiming that customer funds are really unsecured loans to the broker? There's alot in the initial article that needs some explanation. Did Rogers end up investing in Refco?
PuffyGums, Segregated customer funds, deposited into futures accounts, are organized into pools of customers from the same clearing member (regardless of which your introducing broker you have). If one or more of the customers in your pool have large trading losses not made good by meeting margin calls, or if the funds are embezzled, then the clearing broker's capital is applied to fill the pool's deficit. If this capital is not sufficient to fill the gap, then the clearing broker is bankrupt, and the assets in the pool will be distributed to the customers in the pool on a pro rata basis, without regard to whether particular property can be traced to a particular customer, and without regard to the broker's other creditors or the broker's other pools of customers. Customers would therefore lose either some or all of their property. No party would have any obligation to make any customer whole. Apex Capital and Brandonf have been peppering these boards with postings claiming that segregated customer funds are guaranteed by the futures exchanges. These assurances are utterly false. Futures exchanges guarantee trades against the risk of a counterparty's default, but they do not guarantee trading losses by either you or by other customers in your pool at the clearing broker, and they do not guarantee against bankruptcy or embezzlement by your broker. If you are trading futures, then there is no Santa Claus, no Easter Bunny, and no deposit insurance. Please see my posting from Oct 18 in the thread entitled "Refco Account Security".