Fellow account holders and creditors of MF Global FX Clear LLC:
I decided to start this blog as I have been unable to get any information whatsoever about the status of my account and the funds I have at MF Global FX Clear LLC. Although I feel for the employees, sadly the Customer Support team at MF Global FX Clear LLC have been unable to give me any information as to where I stand (they did not even know which entity owns MF Global FX Clear LLC and if any parent-sub guarantees are in place, let alone being able to tell me when and if I will be able to get any money out).
With the exception of MF Global Inc., whose creditors are represented by James Giddens as a Trustee, no other MF Global Holdings Ltd. subsidiary has so far organised creditor representation (although my understanding is that a meeting of creditors is being held today at the Millenium Hilton Hotel in NYC).
I encourage anybody in a similar situation to contribute to this blog so that we can at least try and apply some collective pressure; I am worried that the efforts of exchanges, regulators, etc. are directed towards "saving" the regulated entity MF Global Inc. in order to minimise market disruption. This would mean that we, the creditors of the many unregulated entities in the complex corporate structure of MF Global, have been so far ignored and there is serious danger that our money is being used to plug the potential hole at MF Global Inc.
Anybody who has attended the meeting at the Hilton or has any information please post ASAP!
Finally, some useful links:
http://www.scribd.com/doc/71039486/MFGlobalBankruptcyDeclaration
http://www.mfglobalcaseinfo.com/
http://dm.epiq11.com/MFG/Project/default.aspx
http://www.forbes.com/sites/emilylambert/2011/11/06/angry-mf-global-customers-get-organized/
Finally, some useful links:
http://www.scribd.com/doc/71039486/MFGlobalBankruptcyDeclaration
http://www.mfglobalcaseinfo.com/
http://dm.epiq11.com/MFG/Project/default.aspx
http://www.forbes.com/sites/emilylambert/2011/11/06/angry-mf-global-customers-get-organized/
I suggest you to allow anonymous comments.
ReplyDeleteAlthough this blog is for FX customers, my following comment could shed some light into the liquidation process at MFGI.
ReplyDeleteThe court's order granting motion for the customer accounts transfers by the Trustee to other futures commissions merchants, punishes customers who had the most amount of excess cash in their commodities accounts by preventing them to have access to their excess cash, and rewards customers who had the bare minimum to transfer all of it. Customers whose cash was wholly used as performance bond for their futures positions will get to see an amount of cash equivalent to the minimum margin once their accounts have been transferred to another firm. In other words, customers who had the bare minimum margin will be able to transfer all the cash, as none of their cash will remain frozen. However, customers who didn't have any positions opened, or have excess cash, will have to keep waiting for their funds. It is even possible that such conservative customers might never see their money back if the creditors persuade judge Martin Glenn that MF Global didn't have customers' funds segregated, in which case the customer will become an unsecured creditor. Thus, customers who leveraged the most will be the most better off, and customers who were the most conservative stand to lose the most.
Amongst 125 futures commissions merchants, MF Global was the eighth largest by customers' funds, right between Barclays and Merrill Lynch. If customers of such a large institution were not protected, customers of smaller firms should not expect any protection at all. If customers are not going to be protected, there is no need to have that many acronyms (CFTC, SIPC, SEC) causing a strain on the pockets of those who pay taxes. After all, it seems that any futures commissions merchant can easily embezzle customers’ funds, call it an error, and no longer be liable to its customers. Furthermore, market participants should really be doubtful about the CME and the ICE's financial “safeguards,” which are promoted under the banner of “ensuring the safety and soundness of their markets,” such as their “guarantee funds” supposedly created for “the benefit and protection of both clearing members and their customers.” In a market with no integrity, losses belong to you, but profits belong to bureaucrats and embezzlers.
Overall, if you hold Treasuries, warehouse receipts or cash with a Futures Commisions Merchant, you should expect to lose it all. Moreover, you should expect to lose them all if you hold them at any clearing firm that is a member of a commodities exchange. Finally, you should expect to lose them all if you hold them at any depositary or warehouse authorized by a commodities exchange. After all, no authority is willing to stop the management of a FCM, clearing firm or warehouse from embezzling its customers. At MF Global, customers stand to lose a lot even when the amount of missing customers’ funds has just been about 10% of the total. If that amount was closer to 100%, you would have had the same level of protection from the CFTC, SIPC and SEC: zero. In both cases you’re at the mercy of the embezzlers. As long as regulators protect embezzlers, market participants will be increasingly doubtful of the industry’s asseverations. In the near future, more clearing firms and warehouses will go bust due to “accounting errors” because there are no incentives for integrity, in fact, the opposite has been proven true during the MF Global debacle: there are plenty of rewards for cheating, including perhaps becoming a US senator or state governor.
ReplyDeleteCustomers of MF Global FX Clear LLC should read about the treatment given to customers of REFCO FX in 2006: The creditors of the company persuaded the bankruptcy judge that REFCO had commingled its own funds with those of its customers, who thereafter became unsecured creditors. In other words, the judge decided that the money of its customers didn't belong to them but to all REFCO's creditors. It is highly likely that JP Morgan and others do the same thing again with MF Global FX.
ReplyDeleteThe Trustee is going to punish customers who had the most amount of excess cash in their commodities accounts by preventing them to have access to their excess cash. The customers who had the bare minimum margin will be better off, as none of their cash will remain frozen. That's typical Wall Street mentality: punish conservative behaviour and reward risky behaviour. So the moral of the MF Global fable is: If your futures broker is about to go bust, increase the size of your positions until their maintenance margin equals the cash on your account. You will be better off than the one who had excess cash or no open positions.
ReplyDeleteplease post your email address (and phone number or skype ). I want to contact you
ReplyDelete@Anon Feel free to send me a private message on Seeking Alpha.
ReplyDelete