Not really, the smart ones let the accounts build up to save money on interest with GS....no changes in activity, and no reason that I know of to do so.
Don
The Fall of Refco Trading Services
- Thread starter rtsisfalling
- Start date
Not really, the smart ones let the accounts build up to save money on interest with GS....no changes in activity, and no reason that I know of to do so.
Don
With all due respect Don, Bright and RTS aren't even close to being the same business model. At Bright a trader puts up a deposit and borrows for additional leverage. He receives 100% payout but does have liability if Bright fails. At Refco traders put up no capital and if talented trade some bona fide size on a percentage split. RTS and it's predecessor MacFutures created quite a few young millionaires especially in London. Sure those guys have the risk of losing their profit participation in a meltdown but so do your traders. And without the caveat of making a few mil off Brights money like RTS traders can.
Don,
Is it true that you turned down an offer of $75 million for your firm from Refco?
refco trading services as a whole no longer exists; RTS's London office got bought out by another backer, while Man Financial has acquired the north american operation of RTS but has yet to decide what to do about it - rumor is that they are pulling the plug - from what I hear, some of the North American offices have already suspended trading and have closed the offices
Ah, no, he didn't. Where do you get this stuff?
Bennett was hiding old customer defaults to Refco by making it appear that the $350 mill (or whatever the amount was) was legitimate debt owed to Refco. He, apparently with the help of others, did it in order to facilitate the IPO.
When the problem came to light, Bennett PAID the ENTIRE amount due to Refco. There's a bank in Austria that's not very happy about that, but that's their problem. They loaned him the dough based on his Refco stock, which, of course, is now virtually worthless. Seems Bennett forgot to tell them about the game he had been playing with the old customer defaults.
Anyway, thoughout this whole deal, I have watched in amusement as Refco futures customers panicked.
There was never any reason to panic if you were a retail futures customer. No customer of a CME clearing firm (which Refco still is) has EVER lost a penny due to a firm default.
They were not about to let it happen now. The CME has procedures in place to assess all clearing members to cover a problem at any one of them. There's no guarantee, but any problem would have to be absolutely huge, say a billion or two, for it not to be covered.
Which is why I never worried about it at all. I was only a customer of Refco because they bought Lind-Waldock a year ago or so. I have serious money up with them, and it's even more serious recently as it's been run up to about 4 times what it was in 2002.
But, there was never any indication that there was any under-segregation of customer funds at Refco, LLC (the futures division). And it turns out there wasn't.
Within the 24 or 48 hours, Refco's stalking horse, JC Flowers was willing to put up about $800 mill to buy the retail futures operation, lock, stock and barrel.
I've been trading there as normal throughout. Man emailed today that they will be assuming all accounts at the close of biz on Friday. They wound up paying the equivalent of about $1.25 billion.
End of story. No muss no fuss. No panic. No heartburn.
The people doing business on the unregulated side, like, for instance, Jimmy Rodgers, have problems, and will probably take some sort of hit, but the reg customers are all fine and 100% whole.
Whether I stay with Man remains to be seen, it depends on what they have in mind for rates.
FredBloggs
Guest
i think youre a BULL SHITTER!
i think youre a FAILED RTS TRADER with an AXE TO GRIND.
if you knew anything, you would know that RTS is a different division to refco llc that man took over.
why else would you set up a different identity just to blow hot air and lies.
i know several people at rts, ALL of them are still there and trading.
ROL (probably incl. RTS London) sold to Marathon Asset Mgmt.
www.elitetrader.com/vb/showthread.php?threadid=57185
www.elitetrader.com/vb/showthread.php?threadid=57185
When we were approached by Magnus Greaves people at MacFutures, and we reviewed their business model, and financials...and discovered that they had about 20% of the traders we had, and that their traders were not doing very well, we obviously didn't buy the firm.
Their business model is very similar to ours. And, as I've said many times...we offer balance sheets to new members, and take the additional step of placing $10Million cash in the traders side of the LLC.
No big deal...I hate seeing what happened at Refco...and I am confident that we will continue to have the safest trading firm for our traders. With a $10Million back up for $20k or so, my guys are pretty secure.
And, FWIW, we have many millionaires who have made money using ours (obviously). The day of the NYC type "prop" has been over for years...the future is for independent entrepreneurs (for discretionary trading, still clerk-type traders at brokerage firms).
On a more positive note....I have noticed a significant increase in new trader activity, and the return of traders needing some help and additional capital to trade with....which speaks well for the industry we love.
Happy "black" Friday...I hope your trading is also "in the black"..
Don