MarketWatch is a conventional site for business news. That was why I was amazed when I read David Weidner’s assessment of the MF Global bankruptcy. He was open about the entire process. The company lost $1.2 billion. No one knows where it went. The headline:
MF Global and the lie about safe accounts
Commentary: Why the brokerage industry should be worried
He called it a lie. That is strong language.
The company is 3 months past bankruptcy. The firm can’t find the money.
He then asks the key question.
But for everyone who doesn’t have an MF Global account, can you really be sure that the brokerage account at your “safer,” more “stable” firm is any more secure?
He thinks the answer is “no.”
The money just disappeared from clients’ accounts. There is no explanation.
How could this be? Again, there is no explanation.
No one at MF Global noticed. No one sounded an alarm.
How did these funds get out of the segregated accounts? The company was using this money to meet margin calls.
His conclusion is scary. There is no FDIC. There is the Securities Investor Protection Corporation. Where is the coverage?
His conclusion is disturbing. “That’s why this isn’t just about a bunch of farmers, traders and institutional investors who are on the hook. It’s about the safety of the system — and by all appearances, nothing is safe.”
When you read an article like this on a conventional site, you should begin to re-think your retirement, your security, and your plans for the future. This is not some off-the-wall blog by some obscure commentator.
Are you in an online community of like-minded people, where you can share your concerns. I hope so.