Yes, unused funds will be swept from the commodities account into the securities account, which is insured and segregated.
MF Global down 60% right now
- Thread starter Daal
- Start date
Yes, unused funds will be swept from the commodities account into the securities account, which is insured and segregated.
That could be the case, but if that is consumed then other clients funds would be used. the point I was making is that Clearing firm directors are not required to auction off their homes before they use your money o pay someone elses debt.
My guess is that the origin of it is that big locals wanted an option payoff profile so they devised this structure because it allowed them to solicit client funds to the amount of what they thought their worst possible losses would be and they would thus be covereed by someone elses money. A cursory inspection of the BS the exchange puts out might lead you to believe that client funds are protected by the full faith and credit of the whatever, and your funds are safe, NO my firend.
MF Global shares plunge on concern customers are pulling funds - Bloomberg (4.97 -12.42) -Update-
Bloomberg reports MF fell as much as 80% on speculation clients are pulling money and as financial shares dropped to their lowest level in 5 years. "There are concerns that their commodities prime brokerage group customers are pulling out. The customers have concerns about the financial stability of the firm."
Bloomberg reports MF fell as much as 80% on speculation clients are pulling money and as financial shares dropped to their lowest level in 5 years. "There are concerns that their commodities prime brokerage group customers are pulling out. The customers have concerns about the financial stability of the firm."
no it isn't
We know funds are not "safe" as in being insured. However, the firm is SUPPOSED to settle debits from the firm's capital account until it is exhausted before using client funds....
According to the recent story about "rogue trader run amok losing firm $140 Million", the story was that MF had another $400 Million in their capital account. All of that should be used up before tapping customer accounts...
MF CEO will be issuing positive statement soon