MF Global (former Lind Waldock) Bankruptcy

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#1 Wed, Nov 2, 2011 - 11:48am
Daedalus Mugged
Bucks County, PA
Joined: Jun 15, 2011

MF Global (former Lind Waldock) Bankruptcy

Thread to discuss issues and effects of MF Global's bankruptcy. Please share your stories as well as any information about communications from SIPC or MF or any successor company.

I called on Friday (before bankruptcy) and got the 'all is well, your account is safe' spiel. The cash is in an FDIC insured trust at a bank. I had no open future positions, but I did have a silver certificate (a future taken to delivery, so specific serial number bars held at the comex warehouse). I took it to delivery to check if there was a 'silver shortage' I wanted to see if the person on the other side of the trade offered some sort of premium to cash settle...they did not. When I asked about how it was protected, I was told it was 'in my name' not in MF global's so no matter what happened I was protected.

A broker called Monday (technically after the BK filing) and recommended I sell a November future to net against it. His reason was that the certificate may be considered an asset of MF Global, and the creditors may sieze it, sell it, and leave me as a creditor to the bankruptcy rather than as a customer of the brokerage. The exact opposite of what I was told the business day prior. So I sold the future.

Assuming that trade net settles with the certificate properly, I will have only cash at the broker. I have asked about removing cash from the account balance, and didn't really get an answer.

My understanding is that the brokerage assets will end up going to SIPC and then hopefully full cash reimbursement there, although that is from internet reading, not from any official communications.

Did anyone have accounts at some of the other institutions that went boom like Lehman or Bear?

Edited by: Daedalus Mugged on Nov 8, 2014 - 5:16am