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OT - There are layoffs and then there are LAYOFFS...
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Too_Many_Tools
Nov 12, 2011, 2:11:07 AM11/12/11
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What ever happened to "our employees are our most important
resource"...?
That and $600 million dollars.
TMT
MF Global fires brokerage staff en masse
By Clare Baldwin, Greg Roumeliotis and Sam Nelson | Reuters - 7 hrs
ago
NEW YORK/CHICAGO (Reuters) - MF Global fired all 1,066 of its
brokerage employees on Friday, triggering anger and resentment about
the firm's collapse after bad bets on European debt under former CEO
Jon Corzine's leadership.
How the abrupt, final blow was delivered upset many staff -- with some
learning by e-mail and others through news on the television.
"Fifteen years and no severance!" shouted one angry MF Global employee
as he left the firm's offices on 5th Avenue in Manhattan after hugging
the receptionist and doorman.
The trustee in charge of liquidating the brokerage said in a statement
that the workers were let go immediately, though they will be paid
through November 15 and up to 200 will be rehired to help with the
wind-down.
The timing couldn't be worse for the employees. Not only is the U.S.
unemployment rate high at 9 percent, other Wall Street firms have been
firing staff in recent months as trading profits decline and tighter
regulation takes hold.
"The lives of so many people have been disrupted. We did not even get
told individually, we got a group e-mail," said MF Global analyst
Pierre-Yvan Desparois outside the company's offices in Manhattan.
"The company had a lot of potential, it did not have to end like this.
I'm a credit analyst and I could have told Corzine not to invest 100
percent in the sovereign debt situation. He placed bets with people's
lives," said Desparois.
A middle-aged man who said he had worked for MF Global for 23 years
but who declined to give his name left another of the firm's New York
offices wearing a black t-shirt over his collared shirt that was laced
with profanity.
At the Chicago Board of Trade, one MF Global employee sat in silence
after a Reuters reporter told her about the mass layoffs. "No, I
hadn't heard yet," she said, after a moment.
Asked about colleagues who were let go earlier this week, she said
some have put on a brave face about landing another job. "But I told
them, this is totally different because people are finding it hard to
find jobs for 12, 18 months."
The criticism of Corzine was echoed by Todd Thielmann, a broker with
MF Global in Chicago.
"His ego has ruined a lot of lives," said Thielmann. "It was more
about the execs at the company than the grunts."
Another employee who worked in market data at the firm in New York for
three years said she would have never left. "It was a great job. The
camaraderie, the company was great. But people at the top let us down.
It came as a complete shock," she said.
Not every employee saw the pink slip e-mail, and not everyone was
surprised.
A broker in Chicago learned about the termination through news reports
and said employees were being called into meetings as the media began
reporting the development.
"When you are working for a company that is bankrupt, you know it's
coming," said an MF Global broker who attended a 20-minute meeting in
New York.
MONEY STILL MISSING
The firings come as the trustee, James Giddens, works to identify and
locate the brokerage's assets, including $600 million in missing
customer money that has frustrated and confused commodity-market
traders.
MF Global's main U.S. exchange regulator, CME Group Inc, said on
Friday it will provide a $300 million guarantee to prod the trustee
into releasing frozen customer funds. For the first time, CME tapped a
slush fund for about $50 million to help offset any losses to futures
traders stemming from the failure.
Giddens is trying to account for all of MF Global's assets with help
from forensics investigators at Ernst & Young. The trustee said he has
also retained Deloitte to help with the transfer of about 17,000
commodities accounts worth roughly $1.5 billion.
Federal agencies, including the Commodity Futures Trading Commission,
the Securities & Exchange Commission and the Department of Justice,
are investigating whether the money missing from customer accounts may
have been improperly mixed with the firm's funds.
Giddens was appointed to liquidate the brokerage after MF's parent
company declared bankruptcy on October 31.
The bankruptcy shocked Wall Street, in part because the company was
run by former New Jersey Governor and Goldman Sachs head Jon Corzine,
who advocated for tough regulations on Wall Street firms during his
political career.
Corzine resigned last week, saying he would not seek about $9 million
in severance.
SOME WILL BE REHIRED
Between 150 and 200 of the MF Global brokerage employees will be
rehired to help with winding down the business and processing
bankruptcy claims, Giddens said in his statement.
"The termination of employees and closure of operations is a necessary
part of the court-ordered liquidation ... and is consistent with the
trustee's obligations," he said.
The parent, MF Global Holdings, said in a statement that it was
"saddened by the trustee's actions today to terminate so many of our
colleagues."
Giddens also said on Friday that his team is working to clear out the
brokerage's New York offices as soon as possible and rent smaller,
less expensive space as the liquidation moves forward.
MF Global's Chicago offices will continue to be leased for an
undetermined amount of time, he said.
As for the employees, they are heading off into the great unknown.
"We were down to eight people on the floor and only two of them have
found jobs," said Thielmann, who plans to start over as an independent
broker in the corn options pit trading floor of the CBOT.
"I'm on my own now but it's going to be really hard to get customers.
They're scared, they've taken any excess money out of all firms now
and they don't know who to trust. Customers are pulling funds out of
accounts, that's bad for liquidity and bad for markets," he said.
The brokerage liquidation is In re MF Global Inc, U.S. Bankruptcy
Court, Southern District of New York, No. 11-2790.
MF's bankruptcy case is In re MF Global Holdings Ltd, in the same
court, No. 11-15059.
(Additional reporting by Nick Brown, Dan Wilchins and Jonathan Spicer
in New York; and Theopolis Waters, Ann Saphir and T. Arasu in Chicago;
Writing by Edward Tobin; Editing by Martha Graybow, John Wallace, Tim
Dobbyn and Bernard Orr)
resource"...?
That and $600 million dollars.
TMT
MF Global fires brokerage staff en masse
By Clare Baldwin, Greg Roumeliotis and Sam Nelson | Reuters - 7 hrs
ago
NEW YORK/CHICAGO (Reuters) - MF Global fired all 1,066 of its
brokerage employees on Friday, triggering anger and resentment about
the firm's collapse after bad bets on European debt under former CEO
Jon Corzine's leadership.
How the abrupt, final blow was delivered upset many staff -- with some
learning by e-mail and others through news on the television.
"Fifteen years and no severance!" shouted one angry MF Global employee
as he left the firm's offices on 5th Avenue in Manhattan after hugging
the receptionist and doorman.
The trustee in charge of liquidating the brokerage said in a statement
that the workers were let go immediately, though they will be paid
through November 15 and up to 200 will be rehired to help with the
wind-down.
The timing couldn't be worse for the employees. Not only is the U.S.
unemployment rate high at 9 percent, other Wall Street firms have been
firing staff in recent months as trading profits decline and tighter
regulation takes hold.
"The lives of so many people have been disrupted. We did not even get
told individually, we got a group e-mail," said MF Global analyst
Pierre-Yvan Desparois outside the company's offices in Manhattan.
"The company had a lot of potential, it did not have to end like this.
I'm a credit analyst and I could have told Corzine not to invest 100
percent in the sovereign debt situation. He placed bets with people's
lives," said Desparois.
A middle-aged man who said he had worked for MF Global for 23 years
but who declined to give his name left another of the firm's New York
offices wearing a black t-shirt over his collared shirt that was laced
with profanity.
At the Chicago Board of Trade, one MF Global employee sat in silence
after a Reuters reporter told her about the mass layoffs. "No, I
hadn't heard yet," she said, after a moment.
Asked about colleagues who were let go earlier this week, she said
some have put on a brave face about landing another job. "But I told
them, this is totally different because people are finding it hard to
find jobs for 12, 18 months."
The criticism of Corzine was echoed by Todd Thielmann, a broker with
MF Global in Chicago.
"His ego has ruined a lot of lives," said Thielmann. "It was more
about the execs at the company than the grunts."
Another employee who worked in market data at the firm in New York for
three years said she would have never left. "It was a great job. The
camaraderie, the company was great. But people at the top let us down.
It came as a complete shock," she said.
Not every employee saw the pink slip e-mail, and not everyone was
surprised.
A broker in Chicago learned about the termination through news reports
and said employees were being called into meetings as the media began
reporting the development.
"When you are working for a company that is bankrupt, you know it's
coming," said an MF Global broker who attended a 20-minute meeting in
New York.
MONEY STILL MISSING
The firings come as the trustee, James Giddens, works to identify and
locate the brokerage's assets, including $600 million in missing
customer money that has frustrated and confused commodity-market
traders.
MF Global's main U.S. exchange regulator, CME Group Inc, said on
Friday it will provide a $300 million guarantee to prod the trustee
into releasing frozen customer funds. For the first time, CME tapped a
slush fund for about $50 million to help offset any losses to futures
traders stemming from the failure.
Giddens is trying to account for all of MF Global's assets with help
from forensics investigators at Ernst & Young. The trustee said he has
also retained Deloitte to help with the transfer of about 17,000
commodities accounts worth roughly $1.5 billion.
Federal agencies, including the Commodity Futures Trading Commission,
the Securities & Exchange Commission and the Department of Justice,
are investigating whether the money missing from customer accounts may
have been improperly mixed with the firm's funds.
Giddens was appointed to liquidate the brokerage after MF's parent
company declared bankruptcy on October 31.
The bankruptcy shocked Wall Street, in part because the company was
run by former New Jersey Governor and Goldman Sachs head Jon Corzine,
who advocated for tough regulations on Wall Street firms during his
political career.
Corzine resigned last week, saying he would not seek about $9 million
in severance.
SOME WILL BE REHIRED
Between 150 and 200 of the MF Global brokerage employees will be
rehired to help with winding down the business and processing
bankruptcy claims, Giddens said in his statement.
"The termination of employees and closure of operations is a necessary
part of the court-ordered liquidation ... and is consistent with the
trustee's obligations," he said.
The parent, MF Global Holdings, said in a statement that it was
"saddened by the trustee's actions today to terminate so many of our
colleagues."
Giddens also said on Friday that his team is working to clear out the
brokerage's New York offices as soon as possible and rent smaller,
less expensive space as the liquidation moves forward.
MF Global's Chicago offices will continue to be leased for an
undetermined amount of time, he said.
As for the employees, they are heading off into the great unknown.
"We were down to eight people on the floor and only two of them have
found jobs," said Thielmann, who plans to start over as an independent
broker in the corn options pit trading floor of the CBOT.
"I'm on my own now but it's going to be really hard to get customers.
They're scared, they've taken any excess money out of all firms now
and they don't know who to trust. Customers are pulling funds out of
accounts, that's bad for liquidity and bad for markets," he said.
The brokerage liquidation is In re MF Global Inc, U.S. Bankruptcy
Court, Southern District of New York, No. 11-2790.
MF's bankruptcy case is In re MF Global Holdings Ltd, in the same
court, No. 11-15059.
(Additional reporting by Nick Brown, Dan Wilchins and Jonathan Spicer
in New York; and Theopolis Waters, Ann Saphir and T. Arasu in Chicago;
Writing by Edward Tobin; Editing by Martha Graybow, John Wallace, Tim
Dobbyn and Bernard Orr)
dav19...@is.invalid
Nov 13, 2011, 12:29:30 AM11/13/11
to
On Fri, 11 Nov 2011 23:11:07 -0800 (PST), Too_Many_Tools
<too_man...@yahoo.com> wrote:
>"I'm on my own now but it's going to be really hard to get customers.
>They're scared, they've taken any excess money out of all firms now
>and they don't know who to trust. Customers are pulling funds out of
>accounts, that's bad for liquidity and bad for markets," he said.
And that is why these fraudsters need to be criminally prosecuted:
<too_man...@yahoo.com> wrote:
>"I'm on my own now but it's going to be really hard to get customers.
>They're scared, they've taken any excess money out of all firms now
>and they don't know who to trust. Customers are pulling funds out of
>accounts, that's bad for liquidity and bad for markets," he said.
they are a danger to the entire system.
Dave
Benny Fishhole
Nov 13, 2011, 1:11:04 AM11/13/11
to
On Fri, 11 Nov 2011 23:11:07 -0800 (PST), Too_Many_Tools
<too_man...@yahoo.com> wrote:
>"I'm on my own now but it's going to be really hard to get customers.
Try using deoderant, and wipe the cum off your chin before any face to
<too_man...@yahoo.com> wrote:
>"I'm on my own now but it's going to be really hard to get customers.
face meetings.
Too_Many_Tools
Nov 13, 2011, 5:27:38 AM11/13/11
to
On Nov 12, 11:29 pm, dav1936...@is.invalid wrote:
> On Fri, 11 Nov 2011 23:11:07 -0800 (PST), Too_Many_Tools
>
> On Fri, 11 Nov 2011 23:11:07 -0800 (PST), Too_Many_Tools
>
> <too_many_to...@yahoo.com> wrote:
> >"I'm on my own now but it's going to be really hard to get customers.
> >They're scared, they've taken any excess money out of all firms now
> >and they don't know who to trust. Customers are pulling funds out of
> >accounts, that's bad for liquidity and bad for markets," he said.
>
> And that is why these fraudsters need to be criminally prosecuted:
> they are a danger to the entire system.
> Dave
No sh*t.
> >"I'm on my own now but it's going to be really hard to get customers.
> >They're scared, they've taken any excess money out of all firms now
> >and they don't know who to trust. Customers are pulling funds out of
> >accounts, that's bad for liquidity and bad for markets," he said.
>
> And that is why these fraudsters need to be criminally prosecuted:
> they are a danger to the entire system.
> Dave
Take a look at this...
Anyone who owns a share of stock has skin in this game..
TMT
Insight: MF Global bust erodes trust in brokerages
By David Henry, David Sheppard and Matthew Goldstein | Reuters - 13
hrs ago
NEW YORK (Reuters) - Almost two weeks after the bankruptcy of
commodities firm MF Global, customers at rival firms are all asking
the same question: How safe is my money?
MF Global's collapse is confronting clients across the industry with
the harsh truth that while their accounts may be termed "segregated"
that does not mean they are off-limits from trouble at a commodity
futures firm, much less backstopped by any government insurance fund.
MF Global revealed to regulators during its October 31 bankruptcy that
it was short perhaps $600 million in customer funds - money which the
firm was supposed to keep in "segregated" accounts maintained under a
raft of laws and regulations.
The concerns among investors have reached such a pitch that futures
exchange operator CME Group announced late Friday that it will provide
a guarantee for $300 million of the missing money in the MF Global
case.
"I've lost a good deal of money already over this. Now I'm a big boy
who should have known better, with over 25 years experience in the
futures industry, but what they were doing with client funds is to me
outrageous," said Stuart McClellan, an independent trader from Norfolk
in the United Kingdom, who previously worked for Schroders in London.
McClellan has more than $110,000 tied up in MF Global, which he
doesn't know if he will get back.
"Using the excess collateral in clients' funds to trade is not
illegal, but to my mind it's immoral. There is a huge risk," he said.
Futures commission merchants, as brokers in the industry are known,
have always been allowed, with certain restrictions, to invest
customers' so-called "excess margin," or the funds in their accounts
over and above the collateral required to maintain trades. The brokers
then book any profits for themselves.
Segregation simply means that customer deposits can't be mixed with
the firm's own money or used to cover firm expenses. They must always
be available for customers to trade with or withdraw at a moment's
notice. In other words, customer segregated money isn't some big
cookie jar for the firm to dip into when it is short on cash.
"That is what is so shocking about MF Global's situation," said
Michael Greenberger, a former director of the Division of Trading and
Markets at the Commodity Futures Trading Commission (CFTC) and now a
law professor at the University of Maryland.
"If that stability is not present, people will not want to go into
what is already a highly volatile trading environment," he said.
Now with each passing day that missing money has not been found, there
is growing concern that MF Global may have abused its legal latitude
with the segregated customer accounts.
The fear is that MF lost the segregated funds in bad trades or used
them illegally to meet other obligations. By this time, traders and
investigative sources say, it should have been possible to trace the
money, if it still exists, in some account with another financial
institution.
Some traders who tried to withdraw funds from MF Global prior to the
bankruptcy received checks that bounced.
Commodity traders and investors are now saying they will demand their
brokerage houses reveal exactly what they plan investing customer
funds in.
Don McAfee, a private investor from the San Juan Islands in Washington
state, said he had been a "novice" trader of commodities who had
become interested in the sector, in part because he saw less risk from
the fate of individual banks and brokerages than in equities or bonds.
"It was a way of diversifying out of just playing stocks, and I was
very attracted to the fact you did not seem to have any counterparty
risk," McAfee said, who has around $220,000 still frozen at MF Global.
"In the future I am going to want an ironclad guarantee that my
account is fully segregated. And if it's not I need to know that at
most it's being invested in U.S. Treasuries, not commercial paper or
foreign bonds."
PRESSURE MOUNTS ON RIVALS
Brokers at rival firms, who had perhaps hoped to benefit from the
disappearance of one of their fiercest competitors, are fielding
endless calls from concerned customers and fearing a run on their own
accounts.
"I'm getting calls from people, wanting to know if this could happen
again, if I can give them proof that the banks I'm dealing with are
okay and that their money is safe," said one broker on the floor of
the Chicago Board of Trade (CBOT) on Thursday, who asked not to be
identified.
"That's never happened to me before. There's a lot of fear,' he said.
Other traders said they were looking to spread their accounts across
multiple brokers to limit their risk, after watching friends and
colleagues locked out of the market over the past two weeks. Others
said they were looking into insuring their funds.
The failure to free up client funds quickly after the bankruptcy was
further undermining faith in the safeguards in the commodities market,
said Michael "Mack" Frankfurter, co-founder of commodity trading
advisor Cervino Capital Management LLC in Beverly Hills.
"There is unintended consequences and systemic risk evolving in this
situation. It's not about what needs to be done going forward... It's
about what needs to be done immediately to save the industry," he
said.
WHO TO TRUST?
MF Global's standard agreement with customers permitted the firm to
"borrow, pledge, repledge, transfer, hypothecate, rehypothecate, loan
or invest any of the collateral" in customer accounts. The language is
typical of agreements throughout the industry, said one longtime
futures trader and industry consultant who did not want to be
identified because he does work for CME Group.
The largest customers might be able to get that language tweaked in
their favor a bit, perhaps with an agreement to split revenue earned
on the customer deposits. But smaller investors generally have to
accept the firm's plans for the use of excess cash in their accounts.
Trading in commodities has exploded over the past ten years,
increasing by more than 600 percent according to some estimates, and
bringing in a new breed of 'Mom and Pop' investors hoping to protect
themselves against, and benefit from, the rising costs of food and
energy.
The practice of firms using customer excess cash to make money has
been a basic source of revenue for the industry for decades, if not
centuries. In fact, it is revenue from those investments that has
allowed the firms to cut their commission rates to attract more
business.
The practice is codified in U.S. law and regulation, which until 2000
limited use of the funds to basically U.S. Treasury and state and
municipal obligations. Over the next five years, the rules were eased
to permit firms to use customer money to enter into repurchase
agreements and buy foreign bonds, money market funds, and assorted
securities.
When the financial crisis prompted second thoughts from the U.S.
Commodity Futures Trading Commission, the industry fought to stop
proposals to cut back on how much the firms could do with customer
money.
MF Global, which was led by ex-Goldman Sachs CEO and former New Jersey
Governor Jon Corzine, teamed up with Newedge Group, a major
competitor, and warned in a December 2010 letter that reducing the
stream of revenue could force some futures commission merchants to
shut down.
The Futures Industry Association, an umbrella organization
representing futures traders such as Goldman Sachs Group and Jefferies
& Company, as well as MF Global, also pushed back against plans to
stop firms investing in foreign bonds and other riskier assets with
customer funds. The proposal was eventually shelved.
The MF Global collapse prompted CFTC Chairman Gary Gensler to say
November 7 that he will push again to tighten the restrictions.
Industry experts say that may improve the security of segregated
funds, but it could also force brokers to charge higher fees.
Meanwhile, the building outrage over the missing money is rattling
industry veterans. Dennis Gartman, a board member of the Kansas City
Board of Trade known for his daily market commentary, wrote Friday
that if industry leaders do not act quickly to make good on the MF
customer money, "the futures markets shall be under real and permanent
assault."
Todd Thielmann, a former MF Global broker on the floor of the Chicago
Board of Trade, said fear was spreading fast among customers.
"They've taken any excess money out of all firms now and they don't
know who to trust."
(Reporting by David Henry, David Sheppard and Matthew Goldstein in New
York. Additional reporting by Jed Horowitz, Barani Krishnan and
Josephine Mason in New York, Samuel Nelson and PJ Huffstutter in
Chicago; editing by Edward Tobin and Martin Howell)
Steve Walker
Nov 13, 2011, 8:16:09 PM11/13/11
to
On 11/12/2011 02:11, Too_Many_Tools wrote:
> What ever happened to "our employees are our most important
> resource"...?
>
> That and $600 million dollars.
>
> TMT
>
>
> MF Global fires brokerage staff en masse
> By Clare Baldwin, Greg Roumeliotis and Sam Nelson | Reuters - 7 hrs
> ago
>
> NEW YORK/CHICAGO (Reuters) - MF Global fired all 1,066 of its
> brokerage employees on Friday, triggering anger and resentment about
> the firm's collapse after bad bets on European debt under former CEO
> Jon Corzine's leadership.
>
> How the abrupt, final blow was delivered upset many staff -- with some
> learning by e-mail and others through news on the television.
Awwwww. Too bad for them. Most of the financial crisis was created by
> What ever happened to "our employees are our most important
> resource"...?
>
> That and $600 million dollars.
>
> TMT
>
>
> MF Global fires brokerage staff en masse
> By Clare Baldwin, Greg Roumeliotis and Sam Nelson | Reuters - 7 hrs
> ago
>
> NEW YORK/CHICAGO (Reuters) - MF Global fired all 1,066 of its
> brokerage employees on Friday, triggering anger and resentment about
> the firm's collapse after bad bets on European debt under former CEO
> Jon Corzine's leadership.
>
> How the abrupt, final blow was delivered upset many staff -- with some
> learning by e-mail and others through news on the television.
speculators (read: investors) who have no skill to make money except by
borrowing money, and investing it to try and turn a profit, without
having a fallback. Unfortunately, when they f**k up, it hurts everyone.
I think the government should create and enforce a few business rules:
No investing except with verifiable cash assets. Eliminates a lot of the
domino effect when they mess up. The buck stops there.
Get rid of the futures market.
CEO's only get delayed rewards for profits. Laying off thousands, making
a quick profit for the year, shouldn't be rewarded. If the company is
still profitable after 2 or 3 years, then they get their compensation
package.
No lending out borrowed money. Period.
--
Steve Walker
Fusi...@frontierbrain.com (remove brain when replying)
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