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Refco Account Security
- Thread starter Htrader
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Quote from buzzy2:
refco securities LLC is the stocks and options branch of refco.
refco llc, the futures + commodites branch did not go belly up (yet) but the CME announced they won't let refco to withdraw any money from the seggregated accounts. that inspires a lot of trust on refco...
If Refco can't withdraw any money from the futures accounts doesn't that imply that customers accounts are essentially frozen -- just by the CME instead of REFCO.
That can't be good. :eek:
in addition to a personal editor you need to learn how to read. the writer did not say that 3000 employees are common scumbags in suits. he was probably saying that at the senior level of management there are people of that kind. furthermore while you may dispute this statement, it is well accepted that wall street is full of thieves in white shoes.Quote from Apex Capital:
First off, I am a registered CTA that has no other business relationship with REFCO aside from doing some clearing business with them in commodities, as I do with several other FCMs.
I have spent my last 30 or so posts speaking to the mechanics of having a segregated futures account at REFCO LLC., which has nothing to do with the REFCO SECURITIES unit that you speak of that is on the Capital Markets side of REFCO HOLDINGS INC., which is what the DTC directive applied to late last night.
A tremendous amount of people continue to fail to make this distinction, and have a total lack of understanding of how the CME and ECC plays into the handling of segregated futures accounts.
There are over 3,000 employees at REFCO.
I doubt that all of them are "common scumbugs in nice suits" as you say.
But hey, this is ET and it is full of people that spend 95% of their posts talking out of their ass.
Quite typical.
as lucky luciano said on a visit to the floor of the NYSE,"I joined the wrong mob."
Quote from Apex Capital:
Not at all.
Quite frankly, I am rather shocked at how many people have been weighing in with a total lack of understanding when it comes to how an FCM operates and what fiduciary responsibilities and roles that the CME and the ECC play in this Refco situation.
Perhaps I should not be so surprised at the lack of intelligence on ET, but it really is amazing how many people have absolutely NO IDEA what can, or cannot happen as a result of the Refco situation. There have even been fund managers on ET that have admitted that they have client monies with FCM's and yet have no understanding of what can happen simply because they were too lazy or too cheap to hire someone that knows the facts.
The tremendous amount of ignorance in many of these posts regarding REFCO and how an FCM operates and what the ECC's role is is quite telling.
You've been touting this pig from the vantage point of a trader, I presume. The problem is that the situation at Refco is not in the hands of traders. It is in the hands of lawyers, regulators, and lenders.
Let's assume you run money for me. A lot of money. I'm stupid and hysterical and I hear the news and I ask you to get my money out of Refco and you give me your jive about how it's safe. Here's what you know or should have known on Tuesday and Wednesday of this week despite your protestations that all is well because of this segregated account:
1. The company is in trouble.
2. They've dipped into those accounts in the past. That's a history. And until just today or yesterday, withdrawals were not supervised according to news reports.
3. Apparently there is no way to find out how much is in that account or whether there is a run on it. That's why you can hide behind your statement that it is 1B. There are scenarios such as a huge loss in one account holder affecting other account holders.
4. This company operates using many different LLCs or other entities. In fact, the instant fraud was comitted using some type of other related entity. And look at the case above I posted. They've done another scam as late as 1998 using the same modus. That's a history.
Now something happens and there's a significant delay or other compromise of my ability to get my money from you because you're with Refco. Do you think you have a problem with me? I think so and I know the people that represent me will twist you eight ways to Sunday about you not protecting my money by convincing me on leaving it with this troubled company especially when you could have given it back to me .
I'm willing to bet that there isn't a responsible lawyer on the planet that given the points I outline above would tell you Mr. Apex to leave your client money with Refco.
Quote from Trader5287:
I'm willing to bet that there isn't a responsible lawyer on the planet that given the points I outline above would tell you Mr. Apex to leave your client money with Refco.
This might come as a surprise to you, but I have never once made a post telliing people that they should leave their money with REFCO Holdings, REFCO Inc, or REFCO LLC.
Please show me where I have done so.
In fact, on Page #20 of another thread from yeseterday I simply stated:
"I suggest that if anyone is uncomfortable with a significant amount of cash in a trading account at REFCO LLC., then simply reduce your capital exposure and ask for a check to be cut.
Simple as that."
http://www.elitetrader.com/vb/showt...=56831&perpage=6&highlight=risk&pagenumber=20
Quote from Trader5287:
You've been touting this pig from the vantage point of a trader, I presume. The problem is that the situation at Refco is not in the hands of traders. It is in the hands of lawyers, regulators, and lenders.
Wrong.
I have never touted REFCO from the vantage point of a trader.
Historically, I have had a clearing relationship with Refco and have stated as such here on ET in previous posts.
I have simply tried to put a dent into all of the bashing and highly misinformed and inflammatory posts that show a tremendous amount of ignorance when it comes to how an FCM works, what the CME's role is in this and what the fiduciary responsibility is of the ECC. These are all concepts that have been conveniently ignored by many of the posters here.
Back to trading.
I've read in a book before, it mentioned in the history of futures industry, not a single client has lost money due to a FCM's financial problems. Assuming that statement is true, that explains why most people don't care about the regulation of FCMs. I hope the Refco case could shed some light on this issue.
APEX raises a point that people just seem to want to ignore -- that the funds in Refco's regulated futures business are segregated and thus provide a measure of safety given the oversight of the CFTC and backing of clearinghouses behind the exchanges. Does that mean that someone should leave their money with Refco? No. Does that mean Refco is going to survive? No.
As far as the distinctions of which entity pulled out the debt, etc. -- I think this is moot. Refco, Inc. would have to gaurantee the debts on all of its subsidiaries so any debt in a subsidiary should be treated as debt for the entire company. No lender in their right mind would agree to any different structure.
As far as the distinctions of which entity pulled out the debt, etc. -- I think this is moot. Refco, Inc. would have to gaurantee the debts on all of its subsidiaries so any debt in a subsidiary should be treated as debt for the entire company. No lender in their right mind would agree to any different structure.
Quote from MYDemaray:
APEX raises a point that people just seem to want to ignore -- that the funds in Refco's regulated futures business are segregated and thus provide a measure of safety given the oversight of the CFTC and backing of clearinghouses behind the exchanges. Does that mean that someone should leave their money with Refco? No. Does that mean Refco is going to survive? No.
Thank You.
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