IMO you are risking whatever the difference is between the cash that VF parked with Sentinel, and VF's proportionate share of the cash that will be generated from the liquidation of the assets Sentinel purchased with its customer's cash. Will that be 15-20%. I don't know, but I would say it is at least that much based upon the assets purportedly purchased by Citadel.
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Sentinel Management Files for Chapter 11 Bankruptcy
- Thread starter ASusilovic
- Start date
IMO you are risking whatever the difference is between the cash that VF parked with Sentinel, and VF's proportionate share of the cash that will be generated from the liquidation of the assets Sentinel purchased with its customer's cash. Will that be 15-20%. I don't know, but I would say it is at least that much based upon the assets purportedly purchased by Citadel.
Re actual abilitybor willingness to honour withdrawal requests - yes, I did not want the the one to say it.
Get up earlier than the bankers. I worked for a broker that had its credit line cut because it had same word in the name as a legally separate affiliate that was closed. Everybody protects themselves first and worries about what is right or fair afterwrads.
It took about two minutes for quotes to vanish from Refco currenex as the banks pulled.
The thing to remember is that your broker is NOT your friend - he is in business to make money - or not lose it as the case may be. If it is a choice between the broker losing money and his 'dear valued clients' the broker will act in its own interest.
Get up earlier than the bankers. I worked for a broker that had its credit line cut because it had same word in the name as a legally separate affiliate that was closed. Everybody protects themselves first and worries about what is right or fair afterwrads.
It took about two minutes for quotes to vanish from Refco currenex as the banks pulled.
The thing to remember is that your broker is NOT your friend - he is in business to make money - or not lose it as the case may be. If it is a choice between the broker losing money and his 'dear valued clients' the broker will act in its own interest.
Velocity Futures, L.P.
Risk Disclosure Statement for Futures and Options
in accordance with Commodity Futures Trading Commission Rule 1.55
6. Deposited cash and property
You should familiarize yourself with the protections accorded money or other property you deposit for domestic and foreign transactions, particularly in the event of a firm insolvency or bankruptcy. The extent to which you may recover your money or property may be governed by specific legislation or local rules. In some jurisdictions, property which has been specifically identifiable as your own will be pro-rated in the same manner as cash for purposes of distribution in the event of a shortfall.
Risk Disclosure Statement for Futures and Options
in accordance with Commodity Futures Trading Commission Rule 1.55
6. Deposited cash and property
You should familiarize yourself with the protections accorded money or other property you deposit for domestic and foreign transactions, particularly in the event of a firm insolvency or bankruptcy. The extent to which you may recover your money or property may be governed by specific legislation or local rules. In some jurisdictions, property which has been specifically identifiable as your own will be pro-rated in the same manner as cash for purposes of distribution in the event of a shortfall.
Quote from john12:
i guess the only safe way is get a front end like ninja or button trader and use interactive brokers that sweeps your money every night into your sipc brokerage account
Here's an interesting SIPC link...
http://sipc.com/cases/sipccasesclosed.cfm
But what does a front-end have to do with anything?
Osorico
Penson GHCO (PNSN) Issues Statement Regarding Transaction by Sentinel Management Group
08/17/2007 09:19EDT by StreetInsider.com
Sentinel Management Group, Inc., a futures commission merchant and registered investment advisor that engages in the investment of funds for other futures commission merchants, recently announced a temporary halt in redemptions in its investment funds due to market liquidity issues. Penson GHCO, the futures clearing subsidiary of Penson Worldwide, Inc. (NASDAQ: PNSN) is a customer of Sentinel. Until yesterday, Sentinel had informed Penson GHCO that Sentinel was working to solve the liquidity issues it was facing and to return all customer assets, either in cash or in kind.
Late yesterday, Sentinel informed us that it has sold certain of the assets it manages, including our assets and the assets of other futures commission merchants, to Citadel Investments Group LLC. This sale occurred with no notice, without our approval and in breach of our contract with Sentinel. Based on what we have heard of the proposed terms, we believe that this sale occurred at discounts of up to 30% from market prices. This portfolio consisted of short term AA or better corporate bonds or US government agency bonds, as required under CFTC rules. We believe that to liquidate such a portfolio at such a discount to market value constitutes, among other things, a reckless disregard of industry fair practice responsibilities by all parties involved.
have informed Sentinel and Citadel that we oppose the sale and have demanded that it be reversed. Should the sale not be reversed, based on what we currently know, we anticipate incurring a potential one-time after-tax loss of approximately $6.5 million on the Sentinel investment.
We and other customers of Sentinel have proposed alternative arrangements to Sentinel that we believe would be far more beneficial for all parties concerned. To date, such proposals have been ignored.
It is our intention to pursue all legal remedies against Sentinel, Citadel and related parties in order to obtain an improved resolution to this issue.
08/17/2007 09:19EDT by StreetInsider.com
Sentinel Management Group, Inc., a futures commission merchant and registered investment advisor that engages in the investment of funds for other futures commission merchants, recently announced a temporary halt in redemptions in its investment funds due to market liquidity issues. Penson GHCO, the futures clearing subsidiary of Penson Worldwide, Inc. (NASDAQ: PNSN) is a customer of Sentinel. Until yesterday, Sentinel had informed Penson GHCO that Sentinel was working to solve the liquidity issues it was facing and to return all customer assets, either in cash or in kind.
Late yesterday, Sentinel informed us that it has sold certain of the assets it manages, including our assets and the assets of other futures commission merchants, to Citadel Investments Group LLC. This sale occurred with no notice, without our approval and in breach of our contract with Sentinel. Based on what we have heard of the proposed terms, we believe that this sale occurred at discounts of up to 30% from market prices. This portfolio consisted of short term AA or better corporate bonds or US government agency bonds, as required under CFTC rules. We believe that to liquidate such a portfolio at such a discount to market value constitutes, among other things, a reckless disregard of industry fair practice responsibilities by all parties involved.
have informed Sentinel and Citadel that we oppose the sale and have demanded that it be reversed. Should the sale not be reversed, based on what we currently know, we anticipate incurring a potential one-time after-tax loss of approximately $6.5 million on the Sentinel investment.
We and other customers of Sentinel have proposed alternative arrangements to Sentinel that we believe would be far more beneficial for all parties concerned. To date, such proposals have been ignored.
It is our intention to pursue all legal remedies against Sentinel, Citadel and related parties in order to obtain an improved resolution to this issue.
CME Group Issues Statement on Sentinel Management Group
08/14/2007 12:41EDT by StreetInsider.com
CME Group (NYSE: CME) provided the following comment on Sentinel Management Group, Inc. and its determination to cease acceptance of new investment funds or redemptions. CME Group also confirmed that its clearing member firms have continued to meet all of their obligations to CME Clearing and remain in good standing. Sentinel has notified the Commodity Futures Trading Commission (CFTC) that it will not accept additional funds for investment and that it will not make redemptions at this time.
Sentinel is not a clearing member of CME Group or any other exchange. Sentinel provides investment advisory and investment services to institutional and corporate clients, including a limited number of CME clearing member firms. Total investments under management by Sentinel are approximately $1.5 billion. None of these funds are on deposit with CME Clearing to support performance bond or collateral requirements. Sentinel is registered with the Securities and Exchange Commission (SEC) pursuant to the Investment Advisors Act of 1940, and is also registered with the CFTC and the National Futures Association (NFA) as a non-clearing futures commission merchant (FCM).
08/14/2007 12:41EDT by StreetInsider.com
CME Group (NYSE: CME) provided the following comment on Sentinel Management Group, Inc. and its determination to cease acceptance of new investment funds or redemptions. CME Group also confirmed that its clearing member firms have continued to meet all of their obligations to CME Clearing and remain in good standing. Sentinel has notified the Commodity Futures Trading Commission (CFTC) that it will not accept additional funds for investment and that it will not make redemptions at this time.
Sentinel is not a clearing member of CME Group or any other exchange. Sentinel provides investment advisory and investment services to institutional and corporate clients, including a limited number of CME clearing member firms. Total investments under management by Sentinel are approximately $1.5 billion. None of these funds are on deposit with CME Clearing to support performance bond or collateral requirements. Sentinel is registered with the Securities and Exchange Commission (SEC) pursuant to the Investment Advisors Act of 1940, and is also registered with the CFTC and the National Futures Association (NFA) as a non-clearing futures commission merchant (FCM).
NYMEX Holdings (NMX) Says Sentinel Has No Funds on Deposit with NYMEX
08/15/2007 08:19EDT by StreetInsider.com
NYMEX Holdings, Inc. (NYSE: NMX) confirmed that with regard to the circumstances surrounding Sentinel Management Group, Inc., Sentinel is not a clearing member and does not have any funds on deposit with NYMEX, nor does NYMEX have funds on deposit with Sentinel. All NYMEX clearing members continue to meet their obligations to NYMEX and remain in good standing.
08/15/2007 08:19EDT by StreetInsider.com
NYMEX Holdings, Inc. (NYSE: NMX) confirmed that with regard to the circumstances surrounding Sentinel Management Group, Inc., Sentinel is not a clearing member and does not have any funds on deposit with NYMEX, nor does NYMEX have funds on deposit with Sentinel. All NYMEX clearing members continue to meet their obligations to NYMEX and remain in good standing.
The way I see it is that we only have a real problem if Velocity files for bankruptcy or becomes insolvent, leaving us to recover our money on a pro-rated bases. The question is whether a 15% haircut on USD 18 million (apart from their USD 3.125 million in net capital) will cause Velocity into bankruptcy/insolvency. Its more like they will lose a year's profit but that doesn't make them bankrupt, does it? Any comments?