The Shocking Truth about 'Segregated' Accounts

[Joovenile Jatt]

Quote from braincell:

Most industries have a few people reading the contracts fine print and warning all the others. I haven't seen any of that within retail trading.

I've read the small print and I can tell you, you will not like what it says. Bone hasn't, that's why he doesn't know that a seg account can be changed , without the client's knowledge to a NON SEG account if certain parameters are broken. Unfortunately for him, and others, they have already signed a contract allowing this to happen, amongst many other even more scandalous things. But don't let me put a downer on it all, but just watch what happens if your clearer goes bust. I'm be willing to bet any amount of money you like that you wouldn't get any of your money back, mind you that'd be pointless because you wouldn't be able to pay the bet when I won

 

[bone]

Quote from braincell:

Seriously though, I thought there were better guarantees for international clients. The US law touts itself on consumer protectionism, but I forget that it's for US citizens only. It's also surprising that this hasn't been mentioned or talked about much until now. Most industries have a few people reading the contracts fine print and warning all the others. I haven't seen any of that within retail trading.

The international clients, with firms incorporated and registered outside the US, but with "segregated funds" are next in queue behind clients with "segregated funds" who are incorporated or have individual addresses located withing the US.

 

[Ash1972]

Quote from bone:

The international clients, with firms incorporated and registered outside the US, but with "segregated funds" are next in queue behind clients with "segregated funds" who are incorporated or have individual addresses located withing the US.

Ok, thanks bone. Does that in practice mean the US clients will take a 0% haircut and we will take a correspondingly bigger one?

 

[Joovenile Jatt]

Quote from Scataphagos:

It has been said that this is a "first" case of such a violation and abuse...."

No. It's the first case of such a violation that has been FORCED to be exposed. It's a violation that goes on, undetected, all the time. Do you think Jerome Kerviel is the only guy to break risk procedures by having too large positions in a bank in the last 5 years? The only reason we know about it is because it was something that could no longer be hidden. How many bank traders are in a Jerome Kerviel type sitaution as we speak??? We will only find out if they are forced to seek funding from the govt. If the market goes back up and they get out for a small'ish' loss or even profit, no one will EVER know.

 

[bone]

Quote from Joovenile Jatt:

I've read the small print and I can tell you, you will not like what it says. Bone hasn't, that's why he doesn't know that a seg account can be changed , without the client's knowledge to a NON SEG account if certain parameters are broken. Unfortunately for him, and others, they have already signed a contract allowing this to happen, amongst many other even more scandalous things. But don't let me put a downer on it all, but just watch what happens if your clearer goes bust. I'm be willing to bet any amount of money you like that you wouldn't get any of your money back, mind you that'd be pointless because you wouldn't be able to pay the bet when I won

Sure, it has always been that way with hokey retail brokers who are not member FCM's and operate under a give-up agreement, dumbass. Maybe don't scalp ES with a $5K account.

And there are plenty of major Chicago FCMs without that language in their agreements.

And if you keep getting margin calls and constantly have to wire money into the account, who could possibly blame a broker or FCM for saying: "FU, I'll clear you, but I won't guarantee you". Smart on their part. Why guarantee a deadbeat like you ?

 

[Joovenile Jatt]

Quote from bone:

The international clients, with firms incorporated and registered outside the US, but with "segregated funds" are next in queue behind clients with "segregated funds" who are incorporated or have individual addresses located withing the US.

What if there isn't enough money to pay those first in queue? If there is not enough money to pay back the banks there is no point queuing up because nothing will be handed out. But that was my point in my first post.

 

[Joovenile Jatt]

Quote from bone:

Sure, it has always been that way with hokey retail brokers who are not member FCM's and operate under a give-up agreement, dumbass. Maybe don't scalp ES with a $5K account.

And there are plenty of major Chicago FCMs without that language in their agreements.

And if you keep getting margin calls and constantly have to wire money into the account, who could possibly blame a broker or FCM for saying: "FU, I'll clear you, but I won't guarantee you". Smart on their part. Why guarantee a deadbeat like you ?

Lol, I'm not the one begging for cash on a bulletin board, so who is the deadbeat? You've shown yourself up as not knowing what you sign or the rules that regard your own money, yet you are giving people advice about theirs?
Listen, spreadprofessor, you stick with your set up with your rose tinted glasses but why entice others into your land of delusion? This thread is about saving people's cash, not a competition to see who is more knowledgable about the intricacies of broking.
However, given that you have something to sell and I don't your always playing the salesman so as such you have a vested interest to make yourself look clever. Here's 50 cents for your begging bowl. Get yourself a cup of coffee.

 

[Ash1972]

Quote from Joovenile Jatt:

What if there isn't enough money to pay those first in queue? If there is not enough money to pay back the banks there is no point queuing up because nothing will be handed out. But that was my point in my first post.

The banks are unsecured creditors, just like clients with non-seg accounts. The banks will be behind the seg account holders.

 

[Scataphagos]

Quote from Joovenile Jatt:

I've read the small print and I can tell you, you will not like what it says. Bone hasn't, that's why he doesn't know that a seg account can be changed , without the client's knowledge to a NON SEG account if certain parameters are broken....

Is this something new? I don't recall this provision in the "fine print" in my account docs. Then again, it's been years since I opened a new account.

 

[bone]

Quote from Joovenile Jatt:

What if there isn't enough money to pay those first in queue? If there is not enough money to pay back the banks there is no point queuing up because nothing will be handed out. But that was my point in my first post.

Pay attention. Quit throwing insults and bombs and try to process information. Look at MF's stated customer account equity in their last CFTC report - an 11.6% funding deficit as of the Nov. 02 settlement will theoretically cover the segregated accounts.