Did the customers get back most of their money from PFGBest? Even in MFGlobal's case, customers managed to get back most of their money.
https://en.wikipedia.org/wiki/Peregrine_Financial_Group
Looking for a broker to replace IB, any suggestions?
- Thread starter spurityw
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Did the customers get back most of their money from PFGBest? Even in MFGlobal's case, customers managed to get back most of their money.
https://en.wikipedia.org/wiki/Peregrine_Financial_Group
Of course all funds covered by SIPC were eventually returned, didn't happen the next day though. And SIPC only covers cash and stocks, not futures or forex. And some actions like participating in IBs short lending program as a stock lender also cause you to lose some or all of your SIPC protection. I think several years after all funds were frozen PFGBest's customers were made whole or nearly so, but that was with no interest and of course the loss of any access to those funds the entire time. My real point is that brokers, and companies, can look completely healthy up to the day some underlying fraud comes to light. And the employees at IB from the CEO on down aren't the most trustworthy people in the world.
That's an absurd statement! Pretty much every person who has perpetrated a big fraud, from the smartest guys in the room at Enron to Bernie Madoff had a lot to lose. Hell Russell Wasendorf at PFGBest attempted suicide when uncovered, not much more to lose than that is there?
You probably hadn't heard of Corzine until after the MFGlobal collapse and if you had you didn't like him because of your personal political beliefs were different from his. Wasendorf was highly respected before the PFGBest debacle, I know your hindsight is 20/20 but no-one saw that coming at all. What did you know about him that led you to believe he was a worthless POS before the fraud was uncovered? Or are you using the circular reasoning that because he was caught he was a worthless POS? If so you're missing the point that broker failures aren't obvious until AFTER they happen and it's too late.
You’re a fool with an axe to grind swinging in the air. You have a fixation on maditory payment for flow and twist words. The firms financials, history of retained earnings, history of best ex, margin rates, and more over many many years speaks volumes. Fair enough you don’t like IB but questioning their financial strength and all the food they did and do for the markets makes you look petty.
once more, one has to understand what transpired with PFG... simply stated, with the way IBKR is setup, your funds are insured as long as they are swept to the securities side... clearly, as with ANY FCM, the commodities/futures funds ARE NOT INSURED... also, please keep in mind that PFG was a private FCM vs. IBKR which has been traded since '07, not to mention they are also a broker dealer... SEC/FINRA, I would say, has their act together a lot better than CFTC/NFA when it comes to auditing books and regulating... (then again Madoff happened... but that is another story... IMO, that was complete lack of oversight because of the name)
in the end, don't place all your eggs in a single basket.. if you have significant funds (and I am not talking a few hundred K) there is such thing as WM for you across various global investment banks depending on the size of your funds... for us, mostly retail, we can achieve the same by finding the best possible BD/FCM with the instruments we care to trade given costs and execution quality.
Pointing out that every major broker who failed had a CEO with a lot to loose makes me a fool? OK then. Can you perhaps address my argument in your response to said argument, instead of going off on a random diatrabe about best margin rates? That has about as much to do with a broker's propensity for internal fraud as the CEO having a lot to loose!
Let's be clear, every firm, every single firm even one run by Mother Theressa, has a non-zero chance that the financial strength you see publicly is fraudulent. It's a very small chance, but very real as history has shown us. It is the fool who claims there is zero chance of this with IB, as you and your fellow IB apologists are doing here.
I at no time have predicted IB will fail. I have pointed out that they play fast and loose with the truth throughout the company, and that there is a non-zero chance that they will fail. In direct response to the OP's concerns. Do you claim otherwise?
I never said there is zero chance but you did call the firm dishonest and I don't see that in the way the conduct business and practice what they preach. Your fixation on order flow and twisting the wording of the 606 reports is my issue. I personally think there are a number of brokers who are financially exceptionally strong and don't mess around - Fidelity and Schwab come to mind along with IB. I'm no apologist but I do like to call a spade a spade when I see one.
We all 'get' that Sig's an IB h8r. But what broker is more financially solid, other than the bulge-bracket FCMs (JP, GS, BAML et al) who aren't even taking midsized institutional accounts, let alone retail? The only 'comp' to IB I can think of offhand (in terms of being a large, publicly traded firm) is ADM, and I'm not sure what their threshold is for new clients. Bear in mind, MFG and PFB were small, private firms -- they didn't have analysts combing over every number in their quarterly filings...
If you disagree with my assertions about order flow, then that thread is probably the more appropriate place to discuss it, no?
Do a quick search here and you'll find dozens of cases of IB reps flat out lying to customers. I've had that same experience, a couple of examples off the top of my head; I was told that IB charges margin above the debit amount on a vertical debit spread for ES FOPs because they're required to by the CFTC. When asked which regulation or law they were referring to they told me they didn't have to provide me that information. When asked why several other brokers I know of didn't charge this margin, they doubled down on wrong. Of course they are incorrect, but they refuse to admit it, when the easy answer which happens to be the truth as well is "we programmed our algorithm to evaluate each leg of a vertical spread separately without taking into account that it is a debit spread that can't lose more than you initially paid for it. We don't feel like fixing the algorithm, sorry".
Another example, I wasn't seeming my ES vertical spreads inside the bid/ask reflected in the quote. When I asked why my spreads weren't showing up on GLOBEX, they went through a whole litany of lies. First it was ""Spread orders on Globex such as your ES order are not displayed on the IB Trader Workstation (TWS). Globex is a market place which accepts orders and creates requests for quote which are seen by all market maker participants with access to the book. Futures market makers are not required to disseminate continuous bids or asks."" (that's their exact quote). They stick with this over 2 phone calls and 2 emails. Of course CME itself claims "CME Group electronic markets provide an entirely level playing field for all participants. Individual retail traders, small businesses and large institutions alike see and have access to the same prices. The anonymity of traders and firms is protected electronically in all
bids, offers and trades." (http://www.cmegroup.com/globex/files/GlobexRefGd.pdf), so who's lying here?
When that is pointed out, they pivot to "Spread orders on CME exchanges, such as your SPX spread, please note that spreads that are less than 10 contracts are booked electronically and will be displayed however, spreads that are greater than 10 contracts are handled at the broker's discretion." (again actual quote) So I book an order for 9 contracts and guess what, still doesn't show up.
They then go with "All ES spreads are handled at the broker's discretion". This was probably the correct answer all along? but note how it is mutually exclusive with their first explanation, so one of them had to be a lie.
Heck even the IB rep that used to frequent this board before they ran away was always twisting words, check out the thread on if the stock you lend under their lending program is covered by SIPC insurance if you want to see a great example of word twisting given that you seem concerned about that.
Are these egregious enough to warrant legal action, probably not. Do they indicate a culture of dishonesty? Absolutely. Does it mean IB is cheating on their financials? Probably not, but as you agreed there is a non-zero chance they and any other broker are. Bullshit about their margin rates, how reputable they are, and how much their CEO has to lose are relevant how again? A corporate culture of dishonesty actually is far more relevant, wouldn't you think?