My response to Apex Capital's challenge:
Much of the evidence against Apex Capital consists of his ET postings re: Refco, which were deleted, and therefore can no longer be viewed. Anyone can still read Apex Capital's non-deleted Elite Trader posts, re: REFCO. They can do this by using Elite Trader's search function. They will be able to verify that Apex Capital admits to a longstanding business relationship with Refco, admits to receiving inside information from Refco, operates as Refco's defender and spokesman on EliteTrader, and posted a pattern of false statements benefiting Refco. His postings threatening litigation have been deleted. It appears he manipulated ET, not thru advertising dollars, but by threatening litigation. One of his postings publicly requested that the "Refco Account Security" thread be closed (Oct 18, 2005, 4:23 pm EST), and after he threatened litigation, it was closed. He soon after defied Baron's instructions by posting, in the "Refco Fallout" thread, information which Baron had already stated was off-topic and forbidden. Apex Capital's off-topic posting was deleted and then soon therafter, that thread was also closed.
Apex Capital's very, very effective technique, for disrupting Refco debates on Elitetrader, is to make off-topic personal attacks, which provoke Baron or other administrators to delete posts on both sides of the debate, and also to close entire threads.
Apex Capital unofficially acts on Refco's behalf. Refco officially took the position that its books were unreliable, but unofficially, through Apex Capital, Refco simultaneously took an opposite position:
Quote from TorontoTrader2:
The news release I read said that financial statements from 2002, 2003, 2004, 2004, 2005 could not be relied upon!!
Tell us again where you got the $1 billion figure from?
Quote from Apex Capital:
Excuse me, but REFCO would not be the first company to ever have to restate their financial statements.
The $1 Billion dollar figure in EQUITY comes from Refco LLC itself in a personal phone call to me and can be verified by recent newspaper articles and other financial documentation.
Quote from Apex Capital:
you have no idea what kind of relationships that I have in the FCM business ( personal as well as professional ) that go far and beyond any sort of academic inquiry that someone like you, yourself is able to make.
Refco will obviously disavow any knowledge or responsibility as to Apex Capital's activities, but I think he is their unofficial representative, regardless of whether or not his admitted business relationship with Refco includes compensation for services rendered on ET, and regardless of whether Refco specifically requested such services.
Apex Capital falsely stated, at first, that since the Refco fraud was confined to the holding company, the futures unit was unaffected and customer funds were safe, simply because the futures unit was a separate company; and that those arguing the contrary were ignoramuses with axes to grind. This line of defense broke down days later, when customer funds at another separate Refco company, its retail spot FX brokerage, were frozen, so that many ET members still complain they can't get their money back. This made it impossible to argue that the fraud problem was limited to one particular Refco entity.
Apex then switched gears, by repeatedly falsely claiming, in many different threads, that customer funds deposited into segregated futures broker accounts were guaranteed by the exchanges and their members, so that there was no danger in keeping funds at Refco. Myself and others had to pound on him, through 50 pages of debate, before he finally admitted there was no guarantee; but he never acknowledged his prior false statements to the contrary, and he continues to word his posts in such a way as to mislead people on this issue. Just yesterday, in this very thread, he posted:
I have pointed out since day one that there is a big difference between a segregated futures account and that of an unregulated account, be it at REFCO or any other FCM. Yet, that distinction has conveniently gone unnoticed because it does not fit in with a resident basher's agenda . . . a highly obsessive agenda I might add that has not gone unnoticed by Baron or other members of ET.
Note how Apex no longer explicitly claims that segregated funds are guaranteed, but instead gently misleads the reader to draw that same false conclusion. See my posting of 27 Oct 2005, 10:24 am EST, for solid proof from the CFTC and the CME that segregated customer funds are
not guaranteed.
Apex also falsely stated that no customer ever lost funds in any futures clearing broker bankruptcy. ET member 2cents then found a link to a joint SEC/CFTC document recounting that such customer losses have happened numerous times, and that the most recent such incident occurred in 1989.
We learned from the headlines, just days ago, that Jim Rogers lost hundreds of millions of dollars of client money, and may eventually get back cents on the dollar or nothing, simply because he deposited it into segregated customer accounts at the Refco futures broker. This massive embezzlement from Jim Rogers should eliminate any doubt that everything Apex Capital said, about the safety of customer funds at Refco, is not only absolute rubbish, but a gross misuse and perversion of EliteTrader.
I like the following quote from MG01:
After reading 60++ pages of post I have to say that Apex is a real ***. Even after he gave numerous people bad advice telling them to stay with Refco because things would be fine and also telling them that their funds are protected, complete rubbish, he still has the gall to say that people here bear malice towards Refco.
ET unintentionally helped Apex Capital to help Refco. ET did this by carelessly deleting posts and carelessly closing threads in response to Apex Capital's whining and threats. But ET, by reopening this thread, has demonstrated a willingness to correct mistakes.
