Are you sure it's because of the CIPF or it's it something more devious such as the tricky worded paragraph 4 in the standard RefcoFX Client agreement that isn't in the RefcoFX CA agreement.
4. COLLATERAL. All funds, securities, currencies, and other property of
Trader which RFXA or its affiliates may at any time be carrying for Trader
(either individually, jointly with another, or as a guarantor of the account of
any other person) or which may at any time be in its possession or control
or carried on its books for any purpose, including safekeeping, are to be
held by RFXA as security and subject to a general lien and right of set-off
for liabilities of Trader to RFXA whether or not RFXA has made advances
in connection with such securities, commodities, currencies or other
property, and irrespective of the number of accounts Trader may have
with RFXA. RFXA may in its discretion, at any time and from time to time,
without notice to Trader, apply and/or transfer any or all funds or other
property of Trader between any of Traderâs accounts. Trader hereby also
grants to RFXA the right to pledge, re-pledge, hypothecate, invest or
loan, either separately or with the property of other Traders, to itself as
broker or to others, any securities or other property of Trader held by
RFXA as margin or security. RFXA shall at no time be required to deliver
to Trader the identical property delivered to or purchased by RFXA for
any account of Trader.
Later on in the Client Agreement it says:
LENDING AGREEMENT
By signing this Agreement, Trader authorizes RFXA and its affiliates to
use all funds, securities, currencies and other property of Trader as
specified in Paragraph 4 of the Trader Agreement.
Hmm, I think this is what Refco is using to steel customer funds. The question is, is this legal. After all, I hide in a contract that if company X does something illegal, then individual A will bail them out. The courts in general will say that statement makes the whole contract NULL and void, unless the contract says something in like that if by law something is illegal, that dosn't parts of the contract stand.
4. COLLATERAL. All funds, securities, currencies, and other property of
Trader which RFXA or its affiliates may at any time be carrying for Trader
(either individually, jointly with another, or as a guarantor of the account of
any other person) or which may at any time be in its possession or control
or carried on its books for any purpose, including safekeeping, are to be
held by RFXA as security and subject to a general lien and right of set-off
for liabilities of Trader to RFXA whether or not RFXA has made advances
in connection with such securities, commodities, currencies or other
property, and irrespective of the number of accounts Trader may have
with RFXA. RFXA may in its discretion, at any time and from time to time,
without notice to Trader, apply and/or transfer any or all funds or other
property of Trader between any of Traderâs accounts. Trader hereby also
grants to RFXA the right to pledge, re-pledge, hypothecate, invest or
loan, either separately or with the property of other Traders, to itself as
broker or to others, any securities or other property of Trader held by
RFXA as margin or security. RFXA shall at no time be required to deliver
to Trader the identical property delivered to or purchased by RFXA for
any account of Trader.
Later on in the Client Agreement it says:
LENDING AGREEMENT
By signing this Agreement, Trader authorizes RFXA and its affiliates to
use all funds, securities, currencies and other property of Trader as
specified in Paragraph 4 of the Trader Agreement.
Hmm, I think this is what Refco is using to steel customer funds. The question is, is this legal. After all, I hide in a contract that if company X does something illegal, then individual A will bail them out. The courts in general will say that statement makes the whole contract NULL and void, unless the contract says something in like that if by law something is illegal, that dosn't parts of the contract stand.
