Refco Unit Halts Withdrawals, Cash Isn't Sufficient (Update6)
http://www.bloomberg.com/apps/news?...=top_world_news
Refco freezes subsidiary's customer accounts!!!!!!
http://www.usatoday.com/money/indus...-13-refco_x.htm
I know refco ownes FXCM, CMC and a couple others, watch it fallow traders, get out while you can thats if it's not to late..
http://www.bloomberg.com/apps/news?...=top_world_news
Refco freezes subsidiary's customer accounts!!!!!!
http://www.usatoday.com/money/indus...-13-refco_x.htm
I know refco ownes FXCM, CMC and a couple others, watch it fallow traders, get out while you can thats if it's not to late..
links are not working check the refco thread over at MoneyTec http://www.moneytec.com/forums/showthread.php?t=17253
The USD 400 mio loan to an officer of the company was not properly disclosed. Therefore Refco's financial statements were erronious for the past few years. Unfortunately, repayment of the loan doesn't turn back time. It is kind of like a bank teller 'borrowing' money from the till, and then returning it when she gets paid. Repayment doesn't grant absolution from the original sin.
The incident highlights a lack of adequate internal control. And Refco is paying the price. This said, it shouldn't impact the company, from what I have read in the WSJ. At least it isn't making me move my account.
Van88Guy
The incident highlights a lack of adequate internal control. And Refco is paying the price. This said, it shouldn't impact the company, from what I have read in the WSJ. At least it isn't making me move my account.
Van88Guy
tech_trader
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Van88Guy said:
From what I've heard, bennet took a loan for $430 million against his shares in refco to pay back the loan. Refco is in trouble! I would pull my money while I still could. I know from experience that you DO NOT want your assets frozen. You'll be lucky to see them again in the next year.
TWI
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It should be fine. Only risk is that last ime Refco were in trouble it was because they were dipping into seg funds before to pay loans. Today they have 650mil loans!! and they also have 5 billion of seg funds and the CEO appears to be a criminal so better hope that the fact they got fined 1.25 Mil by the CFTC for this back then will have discouraged a repeat performance. There are rumours that this debt goes back to Neiderhoffer when he blew up in 1997....Neiderhoffer was a Refco client.
Today Reco overseas employees were called to a lunch..do not know the outcome but I doub the people here knwo what is going on, only thing I do know is that all th people I have spoken to are withdrawing any unecessary funds they have with the firm and some are stopping trading altogether until this is sorted out.
clylbw
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According to Bloomberg, Refco has filed for bankruptcy and frozen its customer accounts.
I wonder whether Interactive Brokers has connections with Refco. Does anyone know?
The whole fiasco is quite unnerving, even thought I am not a client of Refco. In particular, what should one watch out for when one is looking for a broker? Many people, including me, would go for the big ones in the industry, assuming that they were bound to be safer due o their sizes. However, the big ones fall faster, as this case proves.
And, what kind of protections from our brokers should we look for in terms of our trading funds? I know it is an unavoidable risk in trading, but it really gives me sleepless nights upon the realisation that I could lose my trading capital if my broker went into trouble.
I wonder whether Interactive Brokers has connections with Refco. Does anyone know?
The whole fiasco is quite unnerving, even thought I am not a client of Refco. In particular, what should one watch out for when one is looking for a broker? Many people, including me, would go for the big ones in the industry, assuming that they were bound to be safer due o their sizes. However, the big ones fall faster, as this case proves.
And, what kind of protections from our brokers should we look for in terms of our trading funds? I know it is an unavoidable risk in trading, but it really gives me sleepless nights upon the realisation that I could lose my trading capital if my broker went into trouble.
sandpiper
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clylbw,
It works both ways. I was lucky enough to have my account picked up by Refco back when they took over LFG (just as LFG were about to go t*ts up by all accounts). The same thing goes here I would have thought given the regulated nature of the Refco futures business, i.e. someone (if not Flowers) are going to pick up the regulated side.
I only have more than a passing interest this time because I got canned from a consultancy assignment when Refco took over CIS recently (think I was one of the lucky ones as it turned out). In terms of any kind of due diligence you might have performed that might have alerted you... I think that's more than a touch optimistic.
Let's face it, if it gets through the IPO and through the due diligence process of the guys managing the CIS acquisition and it only gets noticed by a new CFO that they bring in from outside, I don't think we've got much chance.
The only thing I would say is that Refco has never had that great a reputation within the city (several top CIS guys left immediately the acquisition was announced). In addition, if you looked at the documentation supporting the listing, then one of the things that stood out was the large amount of debt that Refco have been carrying. That's the nature of the beast with an organisation like Refco who acquires others on such a regular basis, however, I think that's the bottom line as to why RCM and the securities side have had to shut up shop, i.e. credit rating/line and liquidity problems.
WIth regard to IB. Different ball game I would have thought. Timber Hill are in a completely different league and a different type of organisation.
It works both ways. I was lucky enough to have my account picked up by Refco back when they took over LFG (just as LFG were about to go t*ts up by all accounts). The same thing goes here I would have thought given the regulated nature of the Refco futures business, i.e. someone (if not Flowers) are going to pick up the regulated side.
I only have more than a passing interest this time because I got canned from a consultancy assignment when Refco took over CIS recently (think I was one of the lucky ones as it turned out). In terms of any kind of due diligence you might have performed that might have alerted you... I think that's more than a touch optimistic.
Let's face it, if it gets through the IPO and through the due diligence process of the guys managing the CIS acquisition and it only gets noticed by a new CFO that they bring in from outside, I don't think we've got much chance.
The only thing I would say is that Refco has never had that great a reputation within the city (several top CIS guys left immediately the acquisition was announced). In addition, if you looked at the documentation supporting the listing, then one of the things that stood out was the large amount of debt that Refco have been carrying. That's the nature of the beast with an organisation like Refco who acquires others on such a regular basis, however, I think that's the bottom line as to why RCM and the securities side have had to shut up shop, i.e. credit rating/line and liquidity problems.
WIth regard to IB. Different ball game I would have thought. Timber Hill are in a completely different league and a different type of organisation.
clylbw
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Many thanks sandpiper 
; long time no see.
BTW, I wonder what you think of today's news that IB has bid for Refco? Cannot say I am madly happy about the news . To me the two always catered for different types of traders; while IB is by no means perfect, I am not sure whether I would need one like Refco.
; long time no see.BTW, I wonder what you think of today's news that IB has bid for Refco? Cannot say I am madly happy about the news
. To me the two always catered for different types of traders; while IB is by no means perfect, I am not sure whether I would need one like Refco. 
