Oh Oh, Another Possible MF Global?

Posted 2012-07-09 17:19
by Karl Denninger
in Flash

Can't verify the details at present, but....

“Due to a recent emergency involving Russell R. Wasendorf, Sr., a suicide attempt, some accounting irregularities are being investigated regarding company accounts. PFGBEST is wholly owned by Mr. Wasendorf. Therefore, the NFA and other officials have put all funds on hold, and PFGBEST is in liquidation-only status with our clearing FCM. What this means is no customers are able to trade except to liquidate positions. Until further notice, PFGBEST is not authorized to release any funds. We will update you as any new procedures are stipulated and with any further information as it becomes available.”

A call to the firm's offices confirmed that the NFA has them on "liquidation only status", but they were unable to provide any further information.

Uh.....

Watch this carefully folks. Brokerage failures are not "events" unless customer funds are impacted. There are all sorts of rumors flying around right now and I am choosing not to report on them beyond the cited article above until I can get more information on exactly what's going on -- but this is not good if you have money with these guys, as this status typically means you can't wire or transfer out either until whatever led to the issue is resolved.

Update 5:42 CT: From Reuters

The Cedar Falls, Iowa-based broker, which had about $400 million in customer segregated funds at the end of April, said it was in "liquidation-only" status with its futures commission merchant (FCM), meaning that "no customers are able to trade except to liquidate accounts," according to the notice.
It said the National Futures Association (NFA) and other officials had put all its funds on hold.

Reuters is also reporting the suicide attempt.

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