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RUMORS & CONSEQUENCES



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RTers,

Most traders on this forum world agree that spreading unsubstaniated rumors or
acting impulsively in response to such rumors, can both have negative
consequences.  However, these unusual times require more than usual caution.
The risks of futures trading are not always limited to having positions in
highly leveraged markets that can be dramically effected by unexpected events
like the failure of a large hedge fund or yesterday's actions by the Fed.

In 1990, my then broker (and friend) called one morning a 6AM to advise me to
direct him to close my account and to immediately request the wire transfer
return of my funds.  He had heard informally, that Stotler and Co., a large
FMC supporting many IB offices and retail clients, could no longer meet their
financial requirements and was potentially insolvent.  The rumor proved true.
I got my money and was able  to open an account with another firm  with
minimal interuption  in  my trading.
Regulators stepped in and as I recall, all segregated customer funds were
eventually returned.  But Stotler did not survive.

Whatever the situation at LFG ( I have no knowledge and make no judgement),
traders may wish to review their account papers and the boilerplate language
that often describes your firms obligaions in case of insolvency.  I am not an
attorney but am aware that once the Trustee In Bankruptcy takes control of a
business, release and full recovery of one's assets can be a problimatic and
lengthy process.

My expirence suggests that traders should be as concerned with the financial
strength of their brokerage firm as they are with its commissions and
executions. And, if necessary, be prepared to move quickly to potect your
assets.  As we are lately reminded, being a large firm does not immunize you
against making large mistakes.

Regards,
James Alvis