Client, staff exodus cuts surviving business value
Refco bidders were last week lining up to enter their names
in the auction to buy some or all of the bankrupt brokerage
firm on 9 November. But there remained serious concerns now
over how much of Refco would be left to bid for.
Several FCMs contacted last week said the steady migration
of customer accounts from Refco to other brokers was
continuing, while many Refco sales account executives and
marketing staff have already been poached or were looking to
leave the firm. As sales people leave so do their books of
business, FCM executives said.
When Refco filed for Chapter 11 bankruptcy protection, the
firm and its creditors asked the courts for swift action on the
matter. Even though legal channels have moved to auction off
the company just 30 days after the accounting scandal was
announced on 10 October there were last week signs that the
company has not only been hemorrhaging customers
but also employees from Refco LLC, the still solvent and most
valuable part of the business.
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