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It is now apparent that MF Global, at least in the US, failed to segregate customer funds. The amount of missing funds appears to be about 10% of their total customer funds. Therefore, the possibility of customers’ losing part or their funds on deposit is very relevant.
In America, an organization called SIPC insures cash deposits at broker dealers up to US$250k, and total cash and securities up to $500k. Is there any similar insurance scheme for investors with broker dealers in Singapore? Or will Singapore customers of MF likely face real losses on their balances?
There is a government scheme to insure an unspecified percentage of a bank deposit should the bank fail. Does this extend to accounts with broker dealers?
Thanks
ReplyDear Li,
As far as I know, it doesn’t extent to accounts with brokers dealers.
ReplyThis will be a test for MAS rules on “segregated” account. Wonder will MAS check every client accounts to make sure that MF Global (Singapore) abide by the segregated accounts for clients.
ReplyThat new CEO was former CEO of Goldman Sachs. After that he was governor of New Jersy. He knew what was at stake. He didn’t get to be top honcho of investment bankers or top politician by being goody goody. People who are law abiding, conservative, follow rules, don’t rock the boat, etc are usually not able to get recruited as investment banker, or will be fired within 1 year. Good investment bankers are lucky. He *was* lucky. But his luck ran out.
ReplyThe new CEO is too ambitious to venture into investment banking. MF Global was successful as a brokerage firm.
Lesson learn, focus on what you do best.
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