Did anyone get snared in the MF Financial BK?

The collapse of MF Financial has ensnared some counter-parties. Trends forecaster Gerald Celente was caught up in the mess. The story on the questionable dealings is here. The regulator involved is a buddy of Corzine - but that's just a conspiracy theory.

I had a substantial futures trading account with MF GLOBAL which I opened almost 15 years ago with Lind Waldock. ALL of my funds are frozen. I suspect that it will be months or years before I'm able to recover even a partial reimbursement. Commodity accounts are NOT covered by the SIPC, so I fully expect to take a substantial hit.

Fortunately, I traded financial futures (S&P,Currencies,Bonds,Metals) strictly as an avocation; I felt that my entire account was risk capital, i.e., I was prepared to lose all of it.

I just didn't think that I'd lose the funds to obvious financial irregularities..........

i don't have any accounts with them, but a lot of my clients had clearing accounts with MF Global, so the day teh BK was announced, my brokerage business was less due to the moving of their accounts to other CME clearing members.

I guess now $600 million has gone missing.

Was this surprising? Corzine ripped off New Jersey badly before Chris Christie came in to win the governorship. There was no way I would have invested with corrupt political bigwigs like this and in fact I haven't.

Chris Christie had to do a lot of house cleaning in New Jersey to clean up after Corzine's mess. Is it no wonder that Chris Christie has had some of the best business leaders of our time behind him?

It takes a crook to know a crook. Trust is a two way street.

Repeat after me: I am not a crook!

Thank you for sharing your experience. It is a harsh reminder for all of us that the money we entrust to what we think are solid financial institutions may not be as safe as we think. I hope things turn out better for you than it looks right now.

watchtower7 said:   I did not realize these deposits were not insured. Why would anyone-anyone-deposit money with a partner that did not have some form of guarantee?

Good question. Let's not forget that VANGUARD Mutual Funds are NOT insured. Money Market Funds (held outside of FDIC banks) are NOT insured. Hedge funds are NOT insured.

Why is the world accepting 1.97% on 10 year Treasury notes???? Because the United States appears to be a "riskless" asset; we all know that the printing presses can go into full swing if we need to monetize our debt........

whodini said:   We need more MF Global's to teach people about risk.

We don't necessarily need more, but we do need each and every case like MF Global to die like MF Global did.

sayhey said:   I had a substantial futures trading account with MF GLOBAL which I opened almost 15 years ago with Lind Waldock. ALL of my funds are frozen. I suspect that it will be months or years before I'm able to recover even a partial reimbursement. Commodity accounts are NOT covered by the SIPC, so I fully expect to take a substantial hit.

Fortunately, I traded financial futures (S&P,Currencies,Bonds,Metals) strictly as an avocation; I felt that my entire account was risk capital, i.e., I was prepared to lose all of it.

I just didn't think that I'd lose the funds to obvious financial irregularities..........Sorry to hear this. But according to some criticism I heard, SIPC was/is calling the shots. Do you know why?

motuwallet said:   Let's be honest no one using MF did their DD
You don't know what you're talking about - that's like saying everyone should have know about Enron, Bear Sterns, or Lehman Brothers before the collapse. Here it's not even like Enron where you might have read all the footnotes and figured out the accounting problems, this was just a run on the (highly leveraged) bank - a self-reinforcing problem that can start on any rumor and take down the whole company whether or not it's true. Now if you were watching MF's stock price and news, maybe you got a few days' warning that something might be wrong. Rumors were flying on the Street and people were scrambling to wire out their funds, but the little guy isn't going to hear that. I will also note that depending on which futures you want to trade, MF may have been basically your only option.

This fatwallet thread should be called StupidWallet. Thank you, come again.

DWooley said:   some think it was a hit.
http://www.zerohedge.com/news/guest-post-mf-global-was-it-hit

Hey, there's always going to be a grassy knoll crowd. It's not that conspiratorial. It's a story about mis-management, over-leverage, and illegality.

Hoping to be made whole?

If Reserve Fund (largest Money Market fund, and the first MM fund to break the buck) victims were not - then what are your (speculator) chances?

watchtower7 said:   Good question. Let's not forget that VANGUARD Mutual Funds are NOT insured. Money Market Funds (held outside of FDIC banks) are NOT insured. Hedge funds are NOT insured.
Vanguard mutual funds are certainly not insured against market risk. Customers with accounts at Vanguard are, however, insured against insolvency and unauthorized trading by SIPC. So in that respect, they are in fact insured.

https://personal.vanguard.com/us/whatweoffer/etfsandstocks/accou...

"Securities in your brokerage account are held in custody by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation. Vanguard Marketing Corporation is a member of the Securities Investor Protection Corporation (SIPC) which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash subject to future adjustments for inflation). To obtain information about SIPC, including an explanatory SIPC brochure, please contact SIPC at www.sipc.org or 202-371-8300.

To offer greater protection and security, Vanguard Marketing Corporation has secured additional coverage from certain insurers at Lloyd's of London and London Company Insurers for eligible customers with an aggregate limit of $250 million, incorporating a customer limit of $49.5 million for securities and $1.9 million for cash. Coverage provided by SIPC and certain Lloyd's of London and London Company Insurers does not protect against loss of market value of securities. The policy provided by certain Lloyd's of London and London Company Insurers is subject to its own terms and conditions."

BetterDays said:   watchtower7 said:   Good question. Let's not forget that VANGUARD Mutual Funds are NOT insured. Money Market Funds (held outside of FDIC banks) are NOT insured. Hedge funds are NOT insured.
Vanguard mutual funds are certainly not insured against market risk. Customers with accounts at Vanguard are, however, insured against insolvency and unauthorized trading by SIPC. So in that respect, they are in fact insured.
Not to nitpick, but Vanguard Mutual Funds are usually not held through the brokerage unit. So, most of the mutual fund customers have no SIPC insurance. If it turns out that the Vanguard Group was actually pocketing the money rather than investing it in the funds, or otherwise diverting customer assets, accounts will be uninsured for the losses.

SinglePapa said:   
Is distinction between Lehman paper going bad and Europe CDS paper critical? You think $600m is "missing"; does anyone know (including insiders) how much is lost? Does anyone know how much TBTF European banks are losing on same paper?Yes, with due respect, the distinction between reserve funds and MF is clear. The former is the bad investment the clients of the fund entrusted the asset manager to make; the latter is a potential stealing of the clients' fund by their broker who had no clients permission to invest their money in risky assets or use their money for the broker's own need. It is at minimum a bad case of incompetence and poor back office control--it is not hard to imagine in its final days MF pledged clients' money for its own liquidity needs in a desperate effort to meet the "run on the bank", and worst case criminal offense of the same nature as shoplifting.

This is absurd if no one gets their money back in this when some if the people who Invested with madoff are expecting to get their fullninvestments back (i am not sure if it includes gains or not). Just find a hell of a good class action lawyer? It sounds extemely illegal to me what they are doing. Good luck to those that got caught up in his mess.

sayhey said:   watchtower7 said:   I did not realize these deposits were not insured. Why would anyone-anyone-deposit money with a partner that did not have some form of guarantee?

Good question. Let's not forget that VANGUARD Mutual Funds are NOT insured. Money Market Funds (held outside of FDIC banks) are NOT insured. Hedge funds are NOT insured.

Why is the world accepting 1.97% on 10 year Treasury notes???? Because the United States appears to be a "riskless" asset; we all know that the printing presses can go into full swing if we need to monetize our debt........

Could you clarify some things for the benefit of all of us?

1. What was your sweep vehicle in the MF brokerage account. E.g., in my brokerage accounts, the sweep vehicle is an FDIC insured money market instrument,

2. Did you have any futures positions in your account? Suppose you had enough positions that your entire collateral was needed in order to hold those positions. What happened to those positions?

3. Is there a way to have a brokerage account through firm A, but have the custodian be firm B? I know that larger investors are doing this even with large banks. E.g., European Banks doing brokerage (broker-dealer) business in the US have institutional clients who do not want their collateral held with the said Banks. Instead, they ask that all collateral be held in a separate custodian bank, e.g., Bank of New York Mellon or State Street.

boxerbrief said:   This is absurd if no one gets their money back in this when some if the people who Invested with madoff are expecting to get their fullninvestments back (i am not sure if it includes gains or not). Just find a hell of a good class action lawyer? It sounds extemely illegal to me what they are doing. Good luck to those that got caught up in his mess.

Ha ha
ha ha ha

So. It's up to 1.3 Billion now. What the man gonna do to you now?

Of course, what was I thinking. I have to adjust to the new normal. Bailouts and bonuses for all, the banksters can do no wrong, no prison time for the insiders except Martha Stewart. The sheep stand idly by.