No. Bennet was never a trader. He was just hiding the uncollectable loss. Maybe it was acustomer he brought in and let get in over their heads and the other partners told him he had to eat it. Maybe it was VN. He had big losses then and Refco sold out his stupid put position at the very bottom.
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Refco Account Security
- Thread starter Htrader
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Quote from slackeral:
Refco is known for standing by clients when they have positions that go against them temporaily. My guess is that it is some cutomer's loss from the 98 volatility. They had significant regulatory issues at the time so maybe they wanted to hide the fact they let a cucstomer lose so much without closing out his positions. Idoubt it was from a house position.
It is one thing to stand behind your clients, it is quite another to commit "fraud" (shuffling receivables, and paying a hedge fund to lie about it), if this is a true client loss, then why pay some other hedge fund to lie about it?
I fear there is something more sinister at play. Especially given the size of the loss ($430M), an amount that based on the Refco's operating capital today ($600+M), if on a house account, could technically render Refco insolvent back then.
All I can say that this is not over, not by a long shot. Keep in mind that DE Shaw suffered a $360M loss in '98 as well, and forced BofA to write off $250M as a result of it. A similar loss, if happened to a smaller broker / dealer (for instance, Refco), one that doesn't have the balance sheet of BofA, would bring it to its knees.
Quote from slackeral:
No. Bennet was never a trader. He was just hiding the uncollectable loss. Maybe it was acustomer he brought in and let get in over their heads and the other partners told him he had to eat it. Maybe it was VN. He had big losses then and Refco sold out his stupid put position at the very bottom.
As I have said, it is just a conspiracy theory, that's all. I just have a sneaky suspicion that Bennett is going far beyond just to cover up a client loss.
Quote from rufus_4000:
It is one thing to stand behind your clients, it is quite another to commit "fraud" (shuffling receivables, and paying a hedge fund to lie about it), if this is a true client loss, then why pay some other hedge fund to lie about it?
I fear there is something more sinister at play. Especially given the size of the loss ($430M), an amount that based on the Refco's operating capital today ($600+M), if on a house account, could technically render Refco insolvent back then.
All I can say that this is not over, not by a long shot. Keep in mind that DE Shaw suffered a $360M loss in '98 as well, and forced BofA to write off $250M as a result of it. A similar loss, if happened to a smaller broker / dealer (for instance, Refco), one that doesn't have the balance sheet of BofA, would bring it to its knees.
If the money is/was as you say, then RFX could not of gone on todate...even if you were correct..RFX has maintained and grown over the years and is world wide.
At this time the news we are getting is not accurate.
I like your theory(s)..good reading...but does not make (cents)
hopefully some of you have taken advantage of the option puts today...gave good money almost immediately..
w
Quote from rufus_4000:
I have already gotten more than a few "told you so" messages already. I am a Refco customer, know some of the people there pretty well.
are you saying you were warned of this stiuation..
to receive "I told you so" implies prior...
are you referring to the staff letter that has now surfaced?
Is your relationship with staff personally? or just on the phone client bases?
Some things are best left unsaidl.
conspiracy theory - a group of persons goes out and continues to give negative news when in reality they are part of a fund or corporation looking to buy off the feeding frenzie....
w
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