FCMs contacted by FO Week last week disclosed that they had picked up introducing brokerage business as well as accounts from non-clearing FCMs who previously used Refco for clearing services. While it was impossible to determine how many accounts have been switched over to other FCMs, the uncertainty caused by the investigation into Refco has led to a sizeable migration by banks, institutions and non-clearing FCMs.
"They have no choice," said one FCM executive. "These firms don't know what other skeletons are in the closet. And if you are a customer, an individual with a significant portion of your portfolio in futures or a hedge fund or CTA, you know this much: there was illegal activity going on at the firm where you trusted your funds.
"You may not know the depth of it, but do you want to continue to do business there? The answer, almost legally in many...