Anyone pulling money out of MF Global?

I think the courts' order is actually pretty clear.

"(a) The Trustee is authorized and shall use his best efforts to complete the Account Transfers to one or more selected FCMs (the “Transferees”) that have agreed to accept such Customer Account Positions, together with the minimum clearing-level collateral required to be maintained with respect to such Customer Account Positions (or such other collateral amount agreed to by the Trustee and Facilitating DCOs);"

So, *cash* will only be transferred as much as needed for minimum margin. You should really liquidate immediately, and/or deposit additional funds into your new FCM.

I think this all makes sense when you hear about MF's trading desks absolutely being swamped the last few days, trying to liquidate... and that's before the exchanges shut them off. Now, whichever FCM you end up at... you can either use their execution desk, or they give you electronic access and you can start trading your own positions again.

And yes... I think that means if you happened to be levered up to your eyeballs, at 100% margin/equity in your MF Global account, you were very fortunate. They would have to transfer out all of your cash along with your positions.
 
Quote from heech:


And yes... I think that means if you happened to be levered up to your eyeballs, at 100% margin/equity in your MF Global account, you were very fortunate. They would have to transfer out all of your cash along with your positions.
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Not really fair on those that prudently manage risk and don't carry overnight positions. All of their "cash" becomes part of general pot of creditors claims in the event of a bankruptcy?

At a certain point (when rumours are rife that bankrupty is imminent and you are no longer sure you have time to wire funds out of the account) you are better off not liquidating your futures positions, or even putting on new positions to use up all the cash for margin so that you can keep it in the event of a bankruptcy and account transfer. Am I interpreting this correctly? If so, it's crazy.
 
Quote from benwm:

Not really fair on those that prudently manage risk and don't carry overnight positions. All of their "cash" becomes part of general pot of creditors claims?

At a certain point (when rumours of bankrupty abound and you are no longer sure you have time to wire funds out of the account) you are better off not liquidating your futures positions so you can keep the cash in the event of a bankruptcy. Am I interpreting this correctly? Crazy.
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The point of this entire move isn't really to help out the account holders as far as preservation of value. As I think about it, all of this is intended to solve one problem: liquidation and management of existing positions.

Beyond the risk management issues (as people can't find a way to liquidate/close out their exposure)... these are commodity futures, and a lot of them could very well be expiring into physical delivery commitments like... now. And heck, some clients will WANT delivery... without a FCM helping them make arrangements, what then?

That's all they're trying to do, keep the market at large functioning normally. They're not trying to make clients whole at this point, at all. The process of making clients whole will slowly drag out in bankruptcy court.
 
Why not press criminal charges?
Larceny, theft, robbery, embezzlement ...
These are all felonies and a pattern would trigger RICO.
Let the states attorney do the work.. pierce the corporate veil and recover funds + fees + damages from their personal assets.
Fraud should survive any personal bankruptcy filing and start seizing and liquidating their assets.

The civil route will only make the lawyers rich...
 
Quote from heech:


That's all they're trying to do, keep the market at large functioning normally. They're not trying to make clients whole at this point, at all. The process of making clients whole will slowly drag out in bankruptcy court.
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Understood, what you're saying makes sense.

I'm just trying to work out what I should have done on Monday morning European time before the bankrupcty if I had found myself in the same position as an MF Global account holder. Likelihood is that I would have probably have closed all positions whilst I could have, but in hindsight this seems to have been the least optimal thing to do.

And what would I be doing NOW had I been unable to close the account and positions in time? Would I hedge all the risk in another brokerage account in the knowledge that if the account was not transferred by tomorrow then the positions will have been liquidated anyway?

A similar thought process to buying into a crash with the possibility that trades might be busted at a later stage and you're left holding the can with hedges for your bargain purchases...
 
http://www.businessinsider.com/mf-g...tm_campaign=Feed:+clusterstock+(ClusterStock)

Now MF Global Employees Are Ditching Work
In the aftermath of MF Global's filing for bankruptcy protection Monday, many of the beleaguered broker-dealers' employees are no longer coming into the office, Reuters' Lauren Tara LaCapra reported.

From Reuters:

Because MF Global is banned from putting on new trades by major exchanges, much of its workforce has been idle since the firm filed for Chapter 11 bankruptcy protection on Monday.

A commodities trading adviser Reuters spoke with said he's received a bunch of "out of office" email responses from several of the firm's employees. He added that some employees are working from home because they don't see the point of coming into the office.

What's more is recruiters have seen a massive influx of resumes from MF Global employees scrambling to find employment at another firm.
 
Quote from benwm:

Understood, what you're saying makes sense.

I'm just trying to work out what I should have done on Monday morning European time before the bankrupcty if I had found myself in the same position as an MF Global account holder. Likelihood is that I would have probably have closed all positions whilst I could have, but in hindsight this seems to have been the least optimal thing to do.

And what would I be doing NOW had I been unable to close the account and positions in time? Would I hedge all the risk in another brokerage account in the knowledge that if the account was not transferred by tomorrow then the positions will have been liquidated anyway?

A similar thought process to buying into a crash with the possibility that trades might be busted at a later stage and you're left holding the can with hedges for your bargain purchases...
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I don't think you would've had all that many options. My understanding is not many people could get through to MF and get liquidated Monday anyways. MF traders were all chased off the floor, no other FCM was willing to give-up to MF, and their own execution desk was completely swamped... I assume trying to execute electronically.

*If* you had cash at another FCM, I personally would be putting on offset positions immediately... "liquidate" in that sense. Personally, this is giving me all the reason in the world to make sure I have two FCMs going forward. I'm also parking more cash at the bank level, rather than at the FCM level.
 
“Penson, Mizuho To Get Bulk Transfer Of MF Accounts -Source, DJ”

So you go from MF Global to the great and strong firm of Penson?
 
"RJ O'BRIEN, MACQUARIE TO GET BULK TRANSFER OF MF ACCOUNTS: CNBC"

Haha... these last few headlines say all we need to know about the present state of chaos.
 
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