MF Global is missing $633 million from their client accounts. The company has filed for Bankruptcy protection, and is being dismantled.

Currently, investigators are trying to take the company books apart and figure out where all of the funds are at. At the same time, the staff of over 1000 workers at the brokerage are being laid off.

http://money.cnn.com/2011/11/11/news/companies/mf_global_layoffs/

You can blame a lot of failures on the economy and the difficulties that have ensued. However, this failure is purely bad management.

http://en.wikipedia.org/wiki/MF_Global

A firm originally founded in 1783, it grew over time, and then evolved into the Man Group.

Eventually, the brokerage firm was spun off and founded as a separate company in 2007 during an IPO as MF Global. With the second largest IPO in 2007.

http://www.nyse.com/press/1184840344433.html

Now, with $42 billion in assets, and equity of $1.4 billion, it is a failed enterprise.

Some highlights are:
The Wall Street Journal reported that MF Global would seek Chapter 11 bankruptcy protection after investing $6 billion in sovereign bonds issued by European countries.

On October 25, 2011 MF Global reported a $191.6 million quarterly loss as a result of trading on European government bonds.

According to the CME Group Inc., MF Global broke rules on keeping customer money separate from its own trading accounts.

The MF Global bankruptcy was the the largest Wall Street firm to collapse since the Lehman Brothers incident in September 2008.

The biggest issue in my mind is; “Who do you trust?”

This was not a home town broker who bet big and failed. This was a large to mid-size player (depending on how you measure), that bet big and failed. A stock traded on the NYSE, and audited by PriceWaterhouseCoopers. Even if the players get their money back from the assets, it will take months (years?) to clear this mess up.

How long would your funds be tied up in court?

Could you withstand the financial blow if your investments were tied up in this type of action?

Do you trade or park all of your assets with one firm?

When we thought of diversification, we rarely thought of not using a single bank, brokerage, currency or even country. Now, in any weekend, you can wake up to the folly of a CEO having lost control of his organization and your money. You can go from a secure investment program to financial ruin in a weekend.

You have to maintain control of your investments. The facade that the major players present should not be trusted. When you are looking at the long term, remember the basics, diversity and proper risk management!

Depending on the size of your net worth, you need to ensure no single entity can bring you to financial ruin. Pain, maybe, but nobody should be able to ruin your future.

Remember, they are not watching out for you! That is your job. Only you can assume the risk, and the reward of your financial life.

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Please recall with me the prevailing investor sentiment from this time last year…

U.S. stocks had been in strong decline for more than a year. Some of the most celebrated bulls had turned into bears, and the few bears that did exist before the downturn had become even more bearish. The Daily Sentiment Index for the S&P registered an astonishing 3 percent bulls — virtually no one was believing the upside was coming — and the bleakest of forecasts for 2009 called for nothing short of financial apocalypse.

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If you have any questions let me know.

I just had a new user ask how to enter an option trade into OTrader so I made this video to show him (you) how it is done.

This is a quick video I did while speaking to a client about entering covered call trades into OTrader.

It has not been edited or scripted just a straight out recording of your phone conversation.

As always if you have any questions let me know.