jim
sorry for the handle issue. i do not play different identities, it is just a few years ago a "nonFriend" of mine appeared on this board and i preferred to hide under a new handle before he could track me down. sounds childish but was crucial to me at that time. sky cleared, we have no business connection of whatsoever anymore and i do not care anymore which handle i use. sorry for the confusion ...
regarding the case. i have people who check out the brokers for me. it is kind of independent back office with long history of relationship. we were at bear stearns for futures and tradestation for single equities until last year. we found bear very complicated in their way of doing business. everything did take long for no apparent reason (not becasue they were so accurate!), this kind of thing. guess we were to small for getting true coverage ... . well, we decided to do something about it. MAN was on the list, IB as well. Refco was the final choice. Refco got a relatively small fine ten years ago, was very well reputed within the indstry, went public two months ago, we do segregated futures only. I still believe the choice was reasonable and fine. sure you do better ... after the fact. do i think any of the bigger brokers did not have any trouble, court case, customer complaint over the last twenty years? in this business? i doubt. if something happens at tradestation, their platform crashing , making people loose tons of money in a day, would you find someone who already complained about it five years ago. sure. after the fact everything is ... so obvious.
you say the system is insecure, you could loose your money entirely in a segregated futures account, regulators are not trustworth, the exchange rules are full of wholes, IPO rules suck, you can do better dd on your own, and so forth. my answer: we have a major crisis - the shortest listing history in US stock market (what sigma event is this? what colour has that swan? black whole?). it took me five days to have my money back. i did not sweat for a nanosecond. whenever a broker offered us better rates if we only gave up segregation we refused. that was the major decision. that was the point IMHO.
to me the key is: does the experience on my account justify a very different process of our broker selection process? my answer is: no. i am in this business for trading and my view is that our credit risk management is just fine. worst case. no loss. my point is that when the exchange and finally the US government lets investors down on segregated futures accounts, the entire system changes dramatically. since suddenly you have to price in credit risk of your broker. and consequently your trading costs multiple, forcing you to go to the best rated brokers ... which are probably the banks. forget about IB and what have you. customers' flight into quality - especially the pros. dramatic reduction in liquidity (guess what fees you get in a mor much more concentratet market) and consequently market efficiency. i think this was a great proof for the quality of the system. i am really bullish on it.
it boils down to: can you privately with reasonable effort do better then the combined forces of SEC, CFTC, FMA, diverse accountants involved in the IPO, not to speak of the hundreds professional clients that chose Refco as well (call it references). or, sorry, i pointed the question towards you, i'd rather ask it myself. can i do better? well, definitely not. i do not make the mistake to underestimate what forces are at place in these shops. do they fail once in a while? sure. do i? well ... sure. my ego ain't big enough to deny that that i'd probably fail much more often then these people, who concentrate on something which is inevitably always sideWork to me.
peace
