This is disturbing: "CRT Capital has already swooped in and offered to buy up customer claims from Peregrine victims for 20 to 25 cents on the dollar. If nothing else, this is a sign that CRT is pessimistically handicapping the outcome of the Peregrine customer recoveries -- the lowest price CRT paid for MF Global claims was 60 cents on the dollar."
There is a lot of money to be made in teaching trading courses. I don't know Steve or Curt and as long as I've been with PFG I never took advantage of their courses/education. But, they are probably just as much in shock as everyone else over this mess. They are probably just trying to "stay in the game" and do something to stay busy/involved until they figure out their next step. It is quite possible they might start their own educational program when the dust settles (and charge for it). Or, they might move to another brokerage and take their educational/teaching skills with them. I've taken advantage of "free" education over the years and also spent big $$ for others. Some were good, some were not as good. But for anyone who just lost their job, to be willing to spend their time (possibly without pay), to help others is not a bad thing. I'm sure PFG had some good employees and their lives have been turned upside down too. The action of these two guys (Steve and Curt) speak to their personal integrity and the actions of Wasendorf are not necessarily a reflection of everyone at PFG. (This is just my opinion.)
And, Hedvig, I'm upset over this too. This is the 4th time I've lost money with brokerages over the last 30 years through no fault of my own. Two of those times literally wiped me out so I had to start over more than once. But I appreciate reading the opinions of others, even if I don't necessarily agree with them.
@brevco, I think it is important to note the MF Global and PFG situations are entirely different beasts. Bear in mind MFGlobal used client funds to collateralize a massively leveraged $6b sovereign debt bet caused by a new CEO who wanted to turn MF Global into an investment bank.
They took advantage of legal re-hypothecation rules to use client funds to back the broker's own trades and borrowing. It was in the agreements clients signed with MF-Global. That is why nobody went to jail from MF Global. This loophole needs to be closed. My understanding is the brokerage borrowing rules allow firms to use client money to buy assets in their own name. Goldman and many other investment banks have been doing this for years so using an investment bank as your broker may not be a good idea.
So with MF Global you had money transferred to various institutions (such as $600m to JP Morgan) that could potentially be clawed back plus I assume liquidations of the sovereign debt position in itself. In other words at the time of liquidation the liquidator knew there were assets to recover.
With PFG it was blatant theft of client funds with what appears to be minimal assets to recover. The offer from CRT may appear to be generous in light of this as the risk of recovery appears to be much lower than MF Global. The lawsuits could keep this going for 5+ years . This is no different to any distressed debt sale situation. The price is generally low and then increases if more assets will be recovered than first thought.
Last edited by djkiwi; July 15th, 2012 at 12:01 PM.
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I don't care what people write in a forum or what reporters write in their articles about the potential return of customer funds. I would rather believe James Koutoulas from the Commodity Customer Coalition, who helped MFGlobal customers get 80% back and who has said he will do the same for PFG customers. And in the interview on CFRN which I posted, he said that after having spoken with PFG employees, he believes that only with the frozen assets already in PFG accounts, we should expect to get anywhere from 55% - 70% of our funds returned. CRT Capital would not offer to buy debt for 20 - 25 cents on the dollar if they didn't think they could collect at least double from PFG.
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He will never get out for the remainder of his natural life that's for sure But what's the point? Hes already so old. I really think they should bring back the death penalty for financial crimes of this magnitude.