FXCM Is Buying RefcoFX - Deal is Done - Funds are safe

[uninvited_guest]

Quote from jimrockford:

Anybody have a copy?

If nobody has a copy, then ask yourselves, "Why not?"

This is part of an email I recieved from RefcoFX on Friday. I assume you have seen this and would like the entire MOU (RefcoFX only sent me the 2 paragraphs of the MOU).

Under the terms of the MOU:

· Pending completion of a transaction, RefcoFX clients may continue trading in their accounts without disruption, and

· Upon completion of a transaction, all retail customer positions and orders traded on the FX Trading Station platform will be transferred intact, and RefcoFX account holders will be made whole, have access to 100% of their funds, and be able to carry out normal account procedures, including withdrawing funds, as usual.

 

[jimrockford]

Quote from uninvited_guest:

This is part of an email I recieved from RefcoFX on Friday. I assume you have seen this and would like the entire MOU (RefcoFX only sent me the 2 paragraphs of the MOU).

We need to see the entire MOU.

I also think you are making a false assumption, uninvited_guest. You are assuming that the 2 paragraphs you received are part of the MOU. How do you know this is true?

Those 2 paragraphs are a description of the MOU, and as a description, they may or may not be accurate or false or misleading or even part of the MOU. We need to see the fine print.

The truth is that we haven't seen a damn thing.

 

[Chood]

Quote from jimrockford:

Chood,

Have you actually looked at the Memorandum of Understanding?

No. My comment is based on what I read about it. If I had to guess, I would think that the highly-intertwined nature of RefcoFX and FXCM (as reported in this thread, I mean) would raise in the mind of the bankruptcy judge some question of self-dealing. But who knows for sure?

 

[jimrockford]

Quote from Chood:

No. My comment is based on what I read about it. If I had to guess, I would think that the highly-intertwined nature of RefcoFX and FXCM (as reported in this thread, I mean) would raise in the mind of the bankruptcy judge some question of self-dealing. But who knows for sure?

The bankruptcy judge will not be aware of the relationship between RefcoFX and FXCM, whatever it may be. It is a secret. The only people who will know will be the potential bidders who sign the non-disclosure agreement. The judge can only consider whatever information is in the public record of the case. So we can't expect the judge to protect against secret matters, or even to know about them.

If RefcoFX customers have objections to the MOU, then it is their responsibility to bring those objections to the bankruptcy judge, before it is too late and everything gets etched in stone.

Why do you think we have been allowed to read about the MOU, but have not been allowed to see the MOU?

 

[misha7]

MY question is how can a company with the capital of 50-60 mil (FXCM) "buy back" its shares for 110 mil. Unless the actual cash payment is small and the rest is just a transfer of liability (i.e. customer funds placed with Refco FX that are not there anymore). Is FXCM betting on the fact that most customers will not pull out their funds?

 

[jimrockford]

Quote from misha7:

Check the CFTC file for Forex Capital Markets LLC, the capital is 52 mil. But the main question still remains.

Yes, you are correct, I missed it.

Just goes to show one more example of how tricky things can be, and how important it is to check and to double-check the details.

The $52 mil seems inadequate, and it certainly is not sufficient information to determine post-MOU creditworthiness. If some other affiliated FXCM company takes the RefcoFX accounts, then the $52 million becomes meaningless, because it will be a separate company. Everything I said still holds, except for the amount of the capital.

I think RefcoFX account holders need to start demanding some answers.

 

[uninvited_guest]

Quote from jimrockford:

I think RefcoFX account holders need to start demanding some answers.

As a RefcoFX account holder I feel that I am not in the drivers seat on this one.

So any time FXCM announces anything about "rescuing" our accounts it always adds hope. But if within 1 month I still can't have access to my money then that hope will be lost.

 

[jimrockford]

Quote from uninvited_guest:

As a RefcoFX account holder I feel that I am not in the drivers seat on this one.

So any time FXCM announces anything about "rescuing" our accounts it always adds hope. But if within 1 month I still can't have access to my money then that hope will be lost.

You are in the driver's seat. You are entitled to know what is going on. It is your money, or at least it was. If you don't like the MOU, you are entitled to raise objections with the bankruptcy court. If you don't like the fact that the MOU has been concealed from you, then you are entitled to raise that objection with the bankruptcy court. You are a creditor. One purpose of the bankruptcy court is to protect your rights. But if you don't do your part, of raising appropriate objections, before it is too late, then you can't expect the court to know what is happening or to protect you.

If you wait until the court approves the FXCM deal, and then you try to get your money, but the check bounces, it will be too late. You must act now to protect your rights. You must demand immediate disclosure, so that you can ensure that the FXCM really is what it appears to be. Tick-tock. Tick-tock.

You are in this situation right now, because you were not diligent to read the fine print, to understand it, and to take appropriate actions to protect yourself. If you sit back and allow somebody else to sit in the driver's seat, then you will be repeating the mistake that got you into this situation, and you will risk loss of your rights.

 

[ZoneTrooper]

Quote from jimrockford:

Chood,

Have you actually looked at the Memorandum of Understanding? Has anybody actually seen it? Has anybody given any scrutiny to the fine print? Can anybody post a copy of it?

If the FXCM deal does not go thru, then RefcoFX customers, as general unsecured creditors, are entitled to a fair share of the bankruptcy estate. Bankruptcies typically pay in the neighborhood of 40 cents on the dollar to general unsecured creditors. If the FXCM deal does go thru, then I would be concerned about the danger that RefcoFX customers might, in the end, wind up with absolutely nothing, while leaving their fair share of the Refco bankruptcy estate to the big people who really matter, like the major banks. We need to see the fine print, to make sure that this deal really will benefit the little people.

Anybody have a copy? Why is it not posted on the RefcoFX website?

If nobody has a copy, then ask yourselves, "Why not?"

Did anyone see the bids for REFCO LLC?

And yet it was sold.

Both REFCOFX and FXCM have stated publically the details of the MOU that affects customer accounts.

Though neither of them have final say on wether it will be honored.

As they stated, it will be up to the Bankruptcy Judged. And if anyone really wants the nitty gritty details of the sale, they can go to the court house and get a copy of the proceedings.

So, yes, everything technically is up in the air. But since the details of this transaction is being monitored by so many, I sincerely doubt that the Judge would go against the sale, that would make customers whole by having FXCM by REFCO out.

Remember, in reality, the accounts are probably already controlled, and maintained by FXCM.

Also, did you noticed that no REFCOFX employees are getting layed off. I believe that is because their are hardly any REFCOFX employees to lay off. Remember, FXCM and REFOFX have the same physical address, use the same servers, the same software, and yes I do say they used the same employees.

The only difference between a REFCOFX account holder and an FXCM account holder are the account numbers, and the name on the top of the form. Which is why, REFCO probally won't publish the MOU, and the biggest reason why the Judge will OK the sell.....

 

[ZoneTrooper]

Quote from uninvited_guest:

As a RefcoFX account holder I feel that I am not in the drivers seat on this one.

So any time FXCM announces anything about "rescuing" our accounts it always adds hope. But if within 1 month I still can't have access to my money then that hope will be lost.

Your right. Your not in the driver's seat. Neither is FXCM or REFCOFX.


The Judge is in control. And REFCOFX can only make recommendations.

They lost control, when they filed Chapter 11.

BTW, has anybody else but me, file a claims form with the court.

Or am I alone on this one as a REFCOFX customer and a EliteTrader Forum Member?