InteractiveBrokers "hyper-hypothecates" $14.5b of Customer Funds?

[MKTrader]

Quote from Free Thinker:

no wonder these big wall street firms fought so hard against Obama's Consumer Financial Protection Bureau . this is exactly the kind of thing that should be illegal.

Obama's biggest fundraiser on Wall St. has the last name of Corzine, imbecile.

 

[denner]

Quote from MKTrader:

Obama's biggest fundraiser on Wall St. has the last name of Corzine, imbecile.

And he was a whisker away from becoming the next Treasury Secretary...The fucking train has completely gone off the rails.

 

[southall]

Quote from western:

I would like an IB rep on this board to explain exactly what it means that IB re-hypothecates $14.5 billion of customer funds, and what would happen if IB were to face a liquidity shortage that MF global did.

We need to do our own dd also, does anyone know which filing would contain this information. have looked in the IBKR quarterly filing 10-Q. Big document but does not mention 'hypo' anything even once.

 

[JamesL]

Quote from pt199:

Worry not!

IB is "too big to fail"

IB is a piker compared to the real TBTF i-banks/commericial banks.

Quote from Chicago_CTA:

The only Futures Commission Merchants I trust are smaller, privately-owned ones, like Dorman Trading, RCG and RJO.

Yeah, little family firms like FC Stone.

 

[Nick29]

Zerohedge will love this story.

 

[atticus]

The only answer is to avoid futures and trade equities and/or ETFs.

 

[Options12]

Quote from southall:

We need to do our own dd also, does anyone know which filing would contain this information. have looked in the IBKR quarterly filing 10-Q. Big document but does not mention 'hypo' anything even once.

Look at the last paragraph on page eight:

http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p122388.pdf

It appears that the calculation that would be most helpful in monitoring the hypothecation risk is computed once a week, on Friday. But I don't know where it might be reported.

 

[saico]

MF Global had a completely different business model than IB, which is a pure online brokerage firm. MF was engaged in several other businesses. The shortfall came when their own huge positions in italian bonds went down the road. They tried to compensate these draw downs with client funds what didnt helped them when the firm went broke.

 

[Nick29]

Quote from saico:

MF Global had a completely different business model than IB, which is a pure online brokerage firm. MF was engaged in several other businesses. The shortfall came when their own huge positions in italian bonds went down the road. They tried to compensate these draw downs with client funds what didnt helped them when the firm went broke.

Why do IB need a hyper hypothecate provision in their customer agreement then?

 

[LEAPup]

Quote from Nick29:

Zerohedge will love this story.

"If anyone thought that you couldn’t have your cake and eat it too in the world of finance, MF Global shows how you can have your cake, eat it, eat someone else’s cake and then let your clients pick up the bill. Hard cheese for many as their dough goes missing." Sad!!!

I can imagine the farmers who used MF to hedge will have to pass costs on.