Futures Traders Ok In The Refco Mess
Ok, it looks like the previous owners took $2 billion out of Refco, then Bennett had $430 million he didn’t want to pay back. He eventually had to pay it back anyway. But Refco was already in bankruptcy.
Here is what I think is the only part about this that is interesting. All the futures money from the little guys like me is in segregated accounts. So the Bankruptcy judge only has control over the retail forex and the fund accounts. He can’t touch the futures money if he wanted to.
In this case it looks like their system works. At least for the all the futures traders, the forex accounts with Refco FX is another story. They look like they are customers and not creditors, so the judge will pay the creditors first.
Some of the IB brokers for Refco are reporting that between 5% to 10% of their futures business has run away.
I would have thought it would have been more like 95%. I would have been the first one standing in line to get my money out of there. But it looks like the system is working and 90% or more of the people trust it, and kept their money with Refco futures even though they had access to it and could have taken it out.
Refco FX customers are in a different boat, one trader said he could still make trades on his FX account. However, and profits made after October 17, 2005 may not be honored.
That has got to make you feel all warm and fuzzy about your money being safe.
Calls to Refco have been answered by a recording that says the delay will last for weeks or months and there is no guarantee of the timing or amount of any potential refund.
It looks like it is up to the bankruptcy judge to decide if he is going to give the money back to the FX account holders.
Here is what I think is the only part about this that is interesting. All the futures money from the little guys like me is in segregated accounts. So the Bankruptcy judge only has control over the retail forex and the fund accounts. He can’t touch the futures money if he wanted to.
In this case it looks like their system works. At least for the all the futures traders, the forex accounts with Refco FX is another story. They look like they are customers and not creditors, so the judge will pay the creditors first.
Some of the IB brokers for Refco are reporting that between 5% to 10% of their futures business has run away.
I would have thought it would have been more like 95%. I would have been the first one standing in line to get my money out of there. But it looks like the system is working and 90% or more of the people trust it, and kept their money with Refco futures even though they had access to it and could have taken it out.
Refco FX customers are in a different boat, one trader said he could still make trades on his FX account. However, and profits made after October 17, 2005 may not be honored.
That has got to make you feel all warm and fuzzy about your money being safe.
Calls to Refco have been answered by a recording that says the delay will last for weeks or months and there is no guarantee of the timing or amount of any potential refund.
It looks like it is up to the bankruptcy judge to decide if he is going to give the money back to the FX account holders.
