MF Global came into a fiscal conundrum awaited to the declining value of its $6.3 billion European Sovereign Debt portfolio. Moody's reported that MF's "sovereign risk exposure represented five times the company's tangible common equity." The MF Global bankruptcy has opened a pandora's box in the investment management industry. $630 million was supposed to remain in segregated customer accounts and it did not. UBS, Barings, Lehman Brothers, Bear Sterns, Long Term Capital Management, the catalog is recently building up.
The Investment Management industry has crossed the point of no restore - and ruined a precious element called Trust. How can clients now take place sure that these instances will not always happen again? How can companies confirm clients that their monies will not be used for other purposes? What is happening to the Regulation in the Investment Management industry? A lofty assemble of broadcast observably are not doing their jobs.
Why did the US Commodities Futures Trading Commission (CFTC) not ensure that MF Global's customer accounts were not tampered with? By the time the SEC stepped in, it was excessively late. The destruction had been done and MF Global was inches gone early collapse.
MF Global was leveraged at 44 to 1 - water supply privileged than Lehman Brothers levels. Why did Regulators and Compliance not ensure that MF Global was not excessively leveraged?
These questions call for to be answered and recent events be inflicted with caused the
Investment Management Industry to enter into a tumultous phase in history.Trust and integrity are critical elements and some time ago ruined are trying to amend and repair. Regulators and corporates must sincerely peek into amending existing set of laws to prevent such things from ever happening again. We look to be repeating the same mantra everytime something goes wrong at a Wall Street Firm but ample is enough.
Banks and trading houses are ruining the very market that they get on to a living from. The wellbeing of the customer are obviously not prioritised and as a substitution for financial professionals release trouble about their annual bonuses and frank commissions. By ruining their reputations and breaking the clients trust, financial professionals are ruining the prospect of the comprehensive financial markets as well as the very client that they make a living from.
I am sure unknown on Wall Street intends to end the future of the
Investment Management Industry. Critical steps have to be taken as quickly as possible.
Why are financial professionals putting their future in difficulty by ruining the interests of their clients? Clients should be cultivated and handled with kid gloves. We should protect and secure the 'goose that lays the golden egg.' Financial professionals must to educate their clients to win their trust and confidence and to take out dread and ignorance. Clients should be agreed preside over and instant access to their monies and be updated at all times as to what is happening with their funds and the sort of risks that they are taking and exposed to.
Many of the clients of MF Global who stirred their accounts to rival brokers were told to top up their margins or liquidate. This is not the way to treat clients who have obviously been mistreated. Clients have to be at all times informed and educated regarding volatile markets and explicitly be told what their downside risks are. Obviously they are not being informed adequately.
In the Investment Management Industry the latest question on every client's
mind would be: How prudent is the firm I'm putting cash in? Can they guarantee that they will not use client funds for other investments?
We at Peak Prosperity (HK) Ltd take aim to take baby steps to remove these
nagging doubts. Our clients will be competent to open a trading account in their own names with a Custodian Bank of their choice. The Client feels assured and has immediate access to his account at all times and is in satiated control of his investment. We then step in to recommend the client how to create a tailor made portfolio for maximum returns. When the client makes a profit,he pays us a sliding extent routine fee. NO fees are exciting if lossesare incurred.
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