neither the CFTC, CME or NFA have any excuses for what occurred at MFG, They
as much as Corzine are to blame - if not more so, for yet another costly fiasco
excerpted from the Wiki article
"Refco was a New York-based financial services company, primarily known as a
broker of commodities and futures contracts.
Prior to its collapse in October, 2005, the firm had over $4 billion in approximately
200,000 customer accounts, and it was the largest broker on the CME.
The firm's balance sheet at the time of the collapse showed about $75 billion in
assets and a roughly equal amount in liabilities.
Refco, Inc. entered crisis on Monday, October 10, 2005, when it announced that
its chief executive officer and chairman, Phillip R. Bennett had hidden $430 million
in bad debts from the company's auditors and investors,
anonymous sources cited by the Wall Street Journal and other publications have
stated that the debt stemmed from losses in as many as 10 customer trading accounts,
Refco held offshore accounts holding as much as $525 million in fake bonds.
Refco:
http://en.wikipedia.org/wiki/Refco
On July 3, 2008, Judge Naomi Reice Buchwald sentenced Bennett to 16 years in
federal prison" :
http://en.wikipedia.org/wiki/Phillip_R._Bennett
"Refcoâs forex brokerage arm, Refco FX, LLC, was holding over 17,000 retail
customer brokerage accounts at the time that Refco declared bankruptcy shortly
thereafter.
In the bankruptcy proceedings, Bank of America and other large creditors
managed to convince the bankruptcy court that Refcoâs customers were
actually unsecured creditors because of Refcoâs failure to segregate its
customer accounts from their own general funds, despite telling customers
that it had done so.
This legal maneuver resulted in the unsecured customer accounts being
considered as creditors only after the secured customers in the distribution
of whatever funds were left to be distributed.
Although FXCM made a reasonable offer in late 2005 to purchase the RefcoFX accounts
it was rejected and most of the brokerâs 17,000 customers eventually received little or
no compensation for the balances in their brokerage accounts at the time they were
frozen by the bankruptcy."
http://www.forexfraud.com/forex-art...y-and-its-impact-on-retail-forex-trading.html
'When Refco went bankrupt in November 2005, Man Financial (as MF Global was
then known) took over its accounts and business worldwide'
