MF Global: Déjà vu all over again

An insider view of MF Global implosion

Instead, we heard an anemic pep talk and a reminder that “the sun will come out tomorrow.” People hung up the phone and sang the song from the Broadway musical “Annie” while they began polishing their resumes and putting personal items on their desks into their bags to take home that night.

The Marketing and Communications team, headquartered in New York and of which I was a part, did its best to disseminate useful information to clients and those on the front line with clients. But, there was too much “incoming”—both externally and internally—for our already understaffed team to keep up effectively. By the time something was written, prepared and cleared by legal and compliance (because we were a public company with certain regulatory obligations), the information often had changed.

Instead, word-of-mouth became the norm—particularly on the morning of October 31, when CME Group cut off online trading access to MF Global clients without warning. We got first whiff of the news from clients whose trades wouldn’t go through and called screaming “WTF!” I am in awe of the brokers and sales reps who all stayed at their desks and kept picking up the phone whenever it rang, trying to answer questions as best they could.

MF Global filed for bankruptcy within the hour. Worse yet the filing was precipitated by a report that there was a shortfall in customer segregated funds, which not only killed a reported sale to Interactive Brokers but reduced the likelihood of an orderly transfer of business. Yet, the Refco experience kept our spirits up. We still expected that there would be a buyer of our valuable retail futures business. Despite the reported shortfall in customer funds bringing the company's sale to a screeching middle-of-the-night halt, those of us at “Lind” held out hope that the retail futures business could still survive intact. Indeed, R.J. O’Brien quickly stepped to the fore and tried to acquire the Lind-Waldock brand (which had been retired on August 1, 2012 in a massive rebranding effort) and the retail futures business from the trustee.

Those of us on the 14th floor of the CBOT annex filed into the conference room to pick up personalized packets that contained employee application forms and instructions on getting pre-hire drug tests. We expected to become RJO employees shortly after the accounts moved on the first weekend in November.

But, the trustee wouldn’t play ball. Although many from the “Lind” team worked throughout the weekend of November 5-6 when most of the retail futures accounts were transferred to RJO, the grand plan to bring back the Lind-Waldock brand with all of its supporting employees intact fell through when RJO couldn’t acquire the brand assets from the estate. We went from taking drug tests on November 8 to unemployed on November 11, with 30 minutes to get out of the building under the scrutiny of a half-dozen security guards posted at the front door.

It was fast, just like Refco. It was sudden, just like Refco. But, just like the markets, the story wasn’t exactly the same. No matter how much we expect history to repeat itself.

Susan Abbott Gidel was Lind-Waldock’s Director of Marketing for more than 10 years, and had been promoted to Vice President of Retail Marketing at MF Global concurrent with Lind’s rebranding in August 2012.

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About the Author
Susan Abbott Gidel

Susan Abbott Gidel is owner of SusanGSays LLC, a marketing strategy, timing and copywriting consultancy in Chicago. She can be reached at http://susangsays.com/home.

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