What really irks me is the “clawback” clause. That’s where the liquidators can go back and sue clients who made withdrawals before the fund collapsed (not sure on the time frame...a week?, a month?).
I could understand if someone had “insider information” or was manipulating the market, but what if someone was just completely innocent, lucky, closing out an estate, moving to a new fund, saw long term data which convince him/her to reposition their funds or was just making scheduled withdrawals? They get screwed!!!!
The icing on the cake - for bankruptcy purposes, MF is now an equities firm, not a commodities firm.
This means - surprise - that the tens of thousands of commodities account holders go to the end of the line as an “unsecured creditor”, rather than getting their money.
Imagine if your bank failed, and the FDIC said that leveraged derivative traders were senior to you and your checking/savings account.
Now that I think about it, this is probably the case.
Precedent was set with GM bond holders.