muses of the moment

August 2, 2012

The Knight Capital-Penson Connection

Filed under: MF Global bankruptcy — totallygroovygirlfriday @ 10:17 pm

Remember when groovygirl mentioned this news item and Ann Barnhardt’s warning about Penson? Click here for the reminder.

Now, gg presumes you have heard about the trouble Knight Capital has had this week. Well, Knight took over $411 million in Penson’s client funds in May.

Click here.

Side musing (updated 8-3-12): if you review the numbers in this article it is pretty clear that Knight didn’t “lose” Penson’s customer money, it was never there. It was “transferred” or “bought” by them so they could be floated a loan to cover the “segregated” customer funds (and help their own ass out in the process. But Knight Capital had their own solvency issue (or didn’t realize the huge loss they just bought), and couldn’t get a credit line even with adding Penson’s $411 million.

Hmmm….this connection makes gg question the technical “glitch” news story. There may be something else here.

Regardless of the true underlying story, it is clear the system is breaking down. Beware. Ann issues another warning……

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