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PFG - What happens if you have accounts with them??
- Thread starter gmst
- Start date
Quote from luckyluciano:
My CTA went out on a limb by telling me that the futures industry may cover the losses.
That point was brought up in my first go around with MFG. It was the opinion that nobody (exchanges or whomever) wanted to risk setting a precedent for fear something like this may happen again and they would be liable for losses.
Now in the conference call with the CCC, Commodity Customers Collalition on PFG, the thought was at first blush, it looked like there was sufficient assets versus the liabilities in a chapter 7 to cover this, but with the disclaimer that it was still very early to say for sure. We'll have to see what the list of creditors is
In my own opinion, let's say that an audit shows sufficient assets to cover the shortfall, you might see someone like the CME offer a guarantee in funds much in the same fashion as MFG where they put up a 500M to allow the trustee bring customers up as quickly as Giddens saw the ability to do so.
Another point of discussion here was americans opening up a foriegn trading account. Most foriegn banks will no longer even consider opening up a simple savings account for americans due to the heavy handed rules and reporting requirements imposed by a tyranical power hungry goverment, patroit act, anti money laundering, anti terrorism and fubar (sp?) act. That's just plain bank accounts, who knows what kind of hoops you would have to jump through for a brokerage account.
In further discussion, it sure is incredulous to me that nobody had a clue that the books were being cooked and for so long. If you consider that you've got all those employees at PFG, the bank(s) and exchanges moving margins back and forth, you would have thought a red flag would have popped up somewhere long ago, not just the NFA double checking an audit electronically which should have been done long ago.
I mean, someone somewhere should have said, look you've got all these trading accounts, all these trades with margins with only "x" amount in the segregrated account, isn't there something wrong here?
Well, as I mentioned earlier, this is my second go around here, first MFG, now PFG, I'm OMG! It's bad enough what's happened, hopefully some serious reforms will be instituted, to prevent this from happening again and restore confidence in our industry.
As an aside, us traders, as a lot, are pretty hardened, we don't mince words, can be very frank, shoot from the hip. All of that is a good thing no doubt. For those posting in this thread, please keep in mind that some of us just got vaporized, please use a little tact in chosing your words so we don't feel like our fellow traders are leaving us as unsupported as our indrustry is.
Like I mentioned, this is my second go around, for you guys at PFG, go in and retrieve as many statements now before the website goes black, you'll need them when the claim process begins. I'm book marking this thread, will contribute to the first timers when ever I can for you.
Quote from Swan Noir:
The glasses were an arb? lol. Or was The Times I couldn't read the arb. This line of debate is a real stretch.
I'm not arguing NPV. The principal is gone. It might come back but like the glasses it is now gone. I doubt that an eight figure loss (if it ends up there) will be covered in total by anyone. I'm not an advocate of ayone picking up the tab. My point is a simple one:
COUNTER PARTY RISK COUNTS!!
An asymmetrical return. The glasses were written off so their return was all upside. The principal is gone, yes, but who's the say definitively that it won't be underwritten by the CME, CFTC/NFA, Feds (broader term), etc.
What can you do to prevent credit risk with one of these FCM? You simply aren't afforded the protection that equity B/Ds provide. That's why I am with IB (sweeps). I understand the risks of hyper-hypo but at least I know that Peterffy is a sharp guy and extremely risk-averse. That culture permeates the company.
IMO, the answer is to eliminate non-clearing FCMs. Make them guaranteed IBs to the clearing FCMs. Abolish non-clearing FCMs entirely.
That is also not accurate. US institutional clients lost eight figure $$$ after opening accounts IN THE US that were then switched to Lehman's London subsidiary. Most of them did not realize Lehman had that option. And, since few actually read it all, opening in the US is no iron clad guarantee. The losses were real, they were large and the happened.
QUOTE]Quote from atticus:
US clients of US-domiciled FCMs. [/QUOTE]
QUOTE]Quote from atticus:
US clients of US-domiciled FCMs. [/QUOTE]
Quote from Swan Noir:
That is also not accurate. US institutional clients lost eight figure $$$ after opening accounts IN THE US that were then switched to Lehman's London subsidiary. Most of them did not realize Lehman had that option. And, since few actually read it all, opening in the US is no iron clad guarantee. The losses were real, they were large and the happened.
QUOTE]Quote from atticus:
US clients of US-domiciled FCMs.
Link?
Although I have accounts at two other firms that have very low margin requirements most of the money is at IB. They are much less likely to piss it all away.
Quote from atticus:
An asymmetrical return. The glasses were written off so their return was all upside. The principal is gone, yes, but who's the say definitively that it won't be underwritten by the CME, CFTC/NFA, Feds (broader term), etc.
What can you do to prevent credit risk with one of these FCM? You simply aren't afforded the protection that equity B/Ds provide. That's why I am with IB (sweeps). I understand the risks of hyper-hypo but at least I know that Peterffy is a sharp guy and extremely risk-averse. That culture permeates the company.
IMO, the answer is to eliminate non-clearing FCMs. Make them guaranteed IBs to the clearing FCMs. Abolish non-clearing FCMs entirely.
Interestingly enough while this and dozens of other accurate reports reflect reality at that time, including lower court decisions, there was a much more recent UK Supreme Court decision that reversed it;
Here is how it was: http://www.thehedgefundjournal.com/...l/the-future-of-prime-brokerage-in-the-uk.php
And now, I have discovered just this moment, the reversal:
http://www.risk.net/risk-magazine/f...ers-ruling-changes-equation-creditors-clients
Here is how it was: http://www.thehedgefundjournal.com/...l/the-future-of-prime-brokerage-in-the-uk.php
And now, I have discovered just this moment, the reversal:
http://www.risk.net/risk-magazine/f...ers-ruling-changes-equation-creditors-clients
Quote from atticus:
Link?
Quote from Swan Noir:
Interestingly enough while this and dozens of other accurate reports reflect reality at that time, including lower court decisions, there was a much more recent UK Supreme Court decision that reversed it;
Here is how it was: http://www.thehedgefundjournal.com/...l/the-future-of-prime-brokerage-in-the-uk.php
And now, I have discovered just this moment, the reversal:
http://www.risk.net/risk-magazine/f...ers-ruling-changes-equation-creditors-clients
Epic win!