Refco Account Security
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Refco Is Winding Down Biggest Unit, Refco Securities, DTC Says
Oct. 14 (Bloomberg) -- Refco Inc., the futures broker that's under a federal U.S. investigation for securities fraud, is winding down business at its biggest unit, Refco Securities LLC, according to one of its clearing banks.
Depositary Trust Company said in a notice posted on its Web site that Refco Securities ``has informed DTC that it will begin the process of winding down its business.'' DTC is a unit of Depository Trust & Clearing Corp., the biggest clearing house for Treasury, corporate and municipal bonds, mortgage-backed securities, credit derivatives and emerging market debt.
Refco said in the prospectus for its August initial public offering that Refco Securities accounted for more than 50 percent of the company's gross revenue. Refco Securities is one of the company's two regulated U.S. subsidiaries and an NASD member.
Yesterday, New York-based Refco said it placed a 15-day moratorium on all business at Refco Capital Markets, the unregulated part of its business.
To contact the reporter on this story:
Erik Schatzker in New York at eschatzker@bloomberg.net
Last Updated: October 14, 2005 08:12 EDT
http://quote.bloomberg.com/apps/news?pid=10000006&sid=as23STbuYSIo&refer=home
Oct. 14 (Bloomberg) -- Refco Inc., the futures broker that's under a federal U.S. investigation for securities fraud, is winding down business at its biggest unit, Refco Securities LLC, according to one of its clearing banks.
Depositary Trust Company said in a notice posted on its Web site that Refco Securities ``has informed DTC that it will begin the process of winding down its business.'' DTC is a unit of Depository Trust & Clearing Corp., the biggest clearing house for Treasury, corporate and municipal bonds, mortgage-backed securities, credit derivatives and emerging market debt.
Refco said in the prospectus for its August initial public offering that Refco Securities accounted for more than 50 percent of the company's gross revenue. Refco Securities is one of the company's two regulated U.S. subsidiaries and an NASD member.
Yesterday, New York-based Refco said it placed a 15-day moratorium on all business at Refco Capital Markets, the unregulated part of its business.
To contact the reporter on this story:
Erik Schatzker in New York at eschatzker@bloomberg.net
Last Updated: October 14, 2005 08:12 EDT
http://quote.bloomberg.com/apps/news?pid=10000006&sid=as23STbuYSIo&refer=home
07:59 RFX Refco Name Tarnished, Has `Several Days' to Fight for Survival -- Bloomberg.com (7.88 )
Refco Inc., whose former chief executive officer has been charged with covering up $430 million of debt, is running out of time to stay solvent as the government expands its investigation and the support of investors and customers drains away. The fate of Refco, the biggest independent U.S. futures broker, may be decided within days, not weeks, said Robert Heim, a former U.S. Securities and Exchange Commission enforcement attorney and now a partner at Meyers & Heim LLP in New York. "If Refco doesn't convince customers over the next several days that it's a financially sound institution, there is a very serious chance they could have to file for bankruptcy protection,'' Heim said.
nitro
Refco Inc., whose former chief executive officer has been charged with covering up $430 million of debt, is running out of time to stay solvent as the government expands its investigation and the support of investors and customers drains away. The fate of Refco, the biggest independent U.S. futures broker, may be decided within days, not weeks, said Robert Heim, a former U.S. Securities and Exchange Commission enforcement attorney and now a partner at Meyers & Heim LLP in New York. "If Refco doesn't convince customers over the next several days that it's a financially sound institution, there is a very serious chance they could have to file for bankruptcy protection,'' Heim said.
nitro
Has anyone on ET ever ran into this type of situation before.
It looks like the winding down is as a result of initial disclosure and I am guessing therefore the associate corp has a fiducary responsibility?
any ideas how this effects our existing stock positions?
It the stock is halted but it's preceived value go to x doesn't that give the brokers the rights to call on accounts ? volitility
ie ..stock @ 10dollars ...preceived value 5dollars..can they affect a margin call on small accounts? while the stock is halted?
Reason I ask is I notice teh unrealized p/l changes while the stock is halted and does effect my bp..
I know if I only had ie a 100k account this may or may not of affected one in getting liquidated / margin call.
anyone had that happen as a result of the fiasco?
Now I am an uncomfortable long. Looks like I might end up owning wall paper if a take over, resolution of might doesn't happen...
Well there goes my wife's, new car, necklace, trip,
dam women...give me that shirt...it's warm down here...
It looks like the winding down is as a result of initial disclosure and I am guessing therefore the associate corp has a fiducary responsibility?
any ideas how this effects our existing stock positions?
It the stock is halted but it's preceived value go to x doesn't that give the brokers the rights to call on accounts ? volitility
ie ..stock @ 10dollars ...preceived value 5dollars..can they affect a margin call on small accounts? while the stock is halted?
Reason I ask is I notice teh unrealized p/l changes while the stock is halted and does effect my bp..
I know if I only had ie a 100k account this may or may not of affected one in getting liquidated / margin call.
anyone had that happen as a result of the fiasco?
Now I am an uncomfortable long. Looks like I might end up owning wall paper if a take over, resolution of might doesn't happen...
Well there goes my wife's, new car, necklace, trip,
dam women...give me that shirt...it's warm down here...
True.
A massive loss by an account can force the FCM to pool customer money in order to meet the debt.
Nothing new here folks.
As I indicated in a previous post, perhaps you should notify the State Attorney General where Refco does its business. I am sure that they would be most interested in the axe that you have to grind and the factual information that you have regarding criminal behavior at REFCO.
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.
Well, it sure sounds like there are people here trying to convince the board of just that fact.....
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