Yet another and another class action lawsuit against MF Global...

Quote from fluttrader:

Is it risky now to open a brokerage account with MF ?
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Forget about non-regulated markets (Forex spot, russian and venezuelan bonds, etc.).

Theoretically, regulated securities traded in US exchanges are safe in a bankruptcy. You are a "priority creditor" and you get your securities/funds back. Then other genereal creditors share what -little- is left.

Altough I'm not sure if this also applies to foreign brokers (Bermuda is based in Bermuda).

Besides I'm not sure if a Bermuda broker is audited at all, so who knows if they really have your securities segregated from theirs.
 
Quote from crgarcia:

Forget about non-regulated markets (Forex spot, russian and venezuelan bonds, etc.).

Theoretically, regulated securities traded in US exchanges are safe in a bankruptcy. You are a "priority creditor" and you get your securities/funds back. Then other genereal creditors share what -little- is left.

Altough I'm not sure if this also applies to foreign brokers (Bermuda is based in Bermuda).

Besides I'm not sure if a Bermuda broker is audited at all, so who knows if they really have your securities segregated from theirs.
More...

The registered in Bermuda aspect only affects tax and bankruptcy law. If the firm is registered with the CFTC, no matter where that firm may be domiciled, whether Europe or Asia or the Carribean, it must follow the same guidelines as US domestic base securities firms in terms of standards, bookkeeping, registrations, etc.

In other words, Bermuda based MF Global must follow the same rules as Delaware based Goldman Sachs in terms of CFTC compliance.
 
Quote from cstfx:

The registered in Bermuda aspect only affects tax and bankruptcy law.
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Also bankruptcy?

So if MF Global files for bankruptcy, customers money will end up in a corrupt third world court (Bermuda)?
 
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