Someone posted this in another thread:
Like Gekko said in wall street, you need to buy a certain amount of stock to get inside and see if the books are cooked.
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Can What Happened to MF Happen to IB?
- Thread starter catmango
- Start date
Someone posted this in another thread:
Like Gekko said in wall street, you need to buy a certain amount of stock to get inside and see if the books are cooked.
Quote from Daal:
But there is one troubling thing about Petterfy, he was buying MF stock all the way down. Clearly he doesn't have good judgement when it comes to spotting balance sheets that are likely to run into problems
A 28 million is as small as any good smart trader does, despite being a gain or loss. MF bet the house on the "sure thing", except his size was too big. I think Petterfy has way better notion of risk than any Wall Street CEO, I really respect his real-life trading history.
Quote from comintel:
Interactive Brokers LLC does not engage in proprietary trading:
"Our brokerage companies conduct no proprietary trading."
https://www.interactivebrokers.com/en/p.php?f=ibgStrength&ib_entity=ibg
But buying common stock in MF Global was a proprietary trade, correct?
I don't know how IB can state that the company does not proprietary trade.
Quote from Options12:
But buying common stock in MF Global was a proprietary trade, correct?
I don't know how IB can state that the company does not proprietary trade.
Either that or its not true that it wasn't Peterfly who bought, wasn't he saying in an interview 'you win some you lose some'?
Quote from Daal:
Either that or its not true that it wasn't Peterfly who bought, wasn't he saying in an interview 'you win some you lose some'?
The MF common stock purchase has been poorly explained by the press and by IB.
Without additional explanation it would appear that IB does not trade on behalf of IB except when they do.
It would be interesting to learn what dates the stock purchases were made.
Were the purchases executed before the MF Global downgrades and rumors about liquidity problems related to sovereign debt exposure? Or were the purchases made right up to, and perhaps during, the due diligence period for the purchase of the brokerage?
Quote from Options12:
Hedgehog1, would you expand on the Illinois comment? Are there different FCM customer agreements for IL residents?
Sure; there are not different agreements for Illinois residents, so far as I'm aware.
However, in the (unlikely) event of a dispute you may well end up in a legal/resolution process outside the UK - as is the case for UK clients of MF Global.
As I recall, signing up as an IB UK Customer you, inter alia: 1. commit to binding arbitration, 2. waive any right to punitive damages, 3. agree to limit any claim for damages to the maximum fees that you have paid IB, 4. submit to the legal jurisdiction of England & Wales for any of your claims against IB UK, but 5. accept that IB can opt to bring an action in any jurisdiction it pleases, 6. accept the arbitration of US associations for claims arising in respect of US traded instruments, and 7. accept US jurisdiction for disputes arising with US based exchange data providers.
Quote from comintel:
That is a huge difference assuming that MF Global carried out proprietary trading right within the same company, which I believe was the case (please correct me if I am wrong).
Comintel, I don't know if you are wrong. I can't find any mention of whether or not the MF prop trading occurred within the brokerage units.
But the list of MF subsidiaries is vast. I'm sure it will be hard to tell which subsidiary is responsible for which failed trade:
http://globaldocuments.morningstar....b1e3b4bef05be3d14f8.msdoc/original/dex211.htm
Quote from tomahawk:
http://www.interactivebrokers.com/en/p.php?f=ibgStrength
Read down to line 6 especially.
I remember seeing this link several times in the past, but I guess that they really added some detail to that since MF Global, am I right? Very detailed now about where they put the cash, how they lent out property, and some 2 new paragraphs about MF Global