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Refco Account Security
- Thread starter Htrader
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It is the case that FX clients cannot withdraw their money for 15 days now?
Quote from Apex Capital:
Please feel free to explain as to how Refco LLC (where the segregated futures accounts are), will be effected. Please be specific.
I am not saying that this stuff is happening, but since there were so many shenanigans occuring at Refco, there is always a possibility that free credit balances from the segregated accounts were/are being used to fund other businesses in the Refco empire. I am sure that the CFTC and SEC will do there best to make sure that this is not happening.
Quote from nassau:
News is that the company did not halt the stock but the exchange as it is taking the time and allowing all to get accurate knowledge of what is going on..before they reopen the stock for trading..
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Like I said earlier, the shares will likely not trade again before it declares bankruptcy. Sorry about your position.
just did some research... bear in mind tho', there's always a 1st time for everything...Quote from Apex Capital:
Do some research.
HINT: Ever hear of the CME's clearing house?
The Exchange Clearing Corporation has never let one customer lose 1 cent in a segregated account due to the failure of an FCM.
That is a fact.
And with all due respect, I'm surprised that you did not know this.
straight from cme website, they've only got a $750mio line to cover for an FCM blow-up it seems, but if u have the time, do read carefully:
http://www.cme.com/clearing/rmspan/fs/finsafsys10241.html
and more specifically this extract from the above link:
Bankruptcy Law Protections
In the case of a clearing member bankruptcy, the U.S. Bankruptcy Code and CFTC regulations contain a number of provisions that provide preferential treatment to a clearing memberâs public customers and to the Clearing House. These provisions include special priority rules for distribution of property to customers and certain exceptions to the automatic stay and voidability provisions of the U.S. Bankruptcy Code. Set forth below is a general overview of these provisions.
The Bankruptcy Code offers a number of protections to the Clearing House when a clearing member is bankrupt regardless of whether the bankrupt clearing member holds public customer accounts or only clears proprietary trades. For example, a trustee may not void pre-bankruptcy payments of original performance bond or settlement variation made to the Clearing House (except in the event of a fraudulent transfer). In addition, the filing of a bankruptcy petition will not stay a setoff by the Clearing House of claims for original performance bond or settlement variation payments owed by a clearing member against cash, securities or other property of a clearing member that the Clearing House holds.
These provisions establish a priority for the Clearing House with respect to performance bond deposits. Further, the Bankruptcy Code provides that neither a clearing memberâs bankruptcy nor any order of a bankruptcy court can prevent the Clearing House from exercising any contractual right it has to liquidate a commodity contract. With respect to distribution of customer property, the CFTCâs bankruptcy rules classify a clearing memberâs customers as either âpublicâ or ânon-public.â Non-public customers include certain account holders that are affiliated with or related to the clearing member such as the clearing member officers, directors, general partners or ten (10) percent or greater owners. All other customers are considered âpublic,â and their property on deposit with the clearing member is subject to the Commodity Exchange Act (âCEAâ) and CFTC segregation requirements. Customer classes are further divided by account class as: futures accounts, foreign futures accounts, leverage accounts, or delivery accounts.
The Bankruptcy Code affords claims of public customers the highest priority, subject only to the payment of claims relating to the administration of customer property. First, the customer segregated property of the bankrupt clearing member is to be distributed pro rata among the clearing memberâs public customers. In determining the pro rata distribution, all property segregated on behalf of, or otherwise traceable to, a particular account class is allocated to that class. Property is distributed pro rata notwithstanding that it can be specifically identifiable to particular customers.
Second, if the segregated assets are insufficient to satisfy all public customer claims in full, the clearing memberâs remaining assets are to be used to satisfy such claims before they are available for distribution to the clearing memberâs general creditors. After the claims of public customers are paid in full, the same allocation formula is applied to distribute any remaining property to non-public customers. The applicability of these and other bankruptcy-related provisions will depend on the circumstances of each situation.
Quote from Apex Capital:
Do some research.
HINT: Ever hear of the CME's clearing house?
The Exchange Clearing Corporation has never let one customer lose 1 cent in a segregated account due to the failure of an FCM.
That is a fact.
And with all due respect, I'm surprised that you did not know this.
and here is a hint - 2 cents is asking re FX which has nothing to do with the Exchange Clearing Corp.
and another hint - I understand in the UK all traders at Mac who still have funds with them have had their accounts frozen. Thankfully as soon as the news came out earlier this week most bailed out. As you should be aware Mac is on the futres side as well.
Quote from Lon Eagle:
and here is a hint - 2 cents is asking re FX which has nothing to do with the Exchange Clearing Corp.
and another hint - I understand in the UK all traders at Mac who still have funds with them have had their accounts frozen. Thankfully as soon as the news came out earlier this week most bailed out. As you should be aware Mac is on the futres side as well.
My unerstanding is those of you with FX accounts will be on your own.
Quote from Lon Eagle:
and here is a hint - 2 cents is asking re FX which has nothing to do with the Exchange Clearing Corp.
Every single one of my posts today has focused on REFCO LLC and the segregated futures accounts that are held there.
Anyone that has been reading my posts, or this thread can clearly see this, not too mention my constructive effort at making a distinction between REFCO HOLDINGS and REFCO LLC.
By the way, you have still yet to answer my question about how the liquidity crisis at REFCO HOLDINGS will effect segregated futures accounts at REFCO LLC.
I'm still waiting for your answer.
Quote from Apex Capital:
Every single one of my posts today has focused on REFCO LLC and the segregated futures accounts that are held there.
Anyone that has been reading my posts, or this thread can clearly see this, not too mention my constructive effort at making a distinction between REFCO HOLDINGS and REFCO LLC.
By the way, you have still yet to answer my question about how the liquidity crisis at REFCO HOLDINGS will effect segregated futures accounts at REFCO LLC.
I'm still waiting for your answer.
There is obviously a concern that it could because the CME has taken a huge hit over the last two days, especially over the last few hours. This is a stock that has held up very well during this decline until the Refco blow up. I think you can look at that and see how comfortable some fairly smart people are with Refco. that said I think that the CME is a great buy in here and I did pick some up at $300.
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