Griffin traders threaten move to DTB
Monday 04 January 1999
One trader, who is outraged by what she terms the arrogance of the authorities, said yesterday: "The DTB's marketing department must be licking its chops.
"Nobody is going to use Liffe (the London futures market) if they [the DTB] copy the US system and allow proper segregation of client accounts."
Questions were this weekend being asked about the role of Mr Park's brokers, Tullet and Tokyo.
One trader said: "Normally a broker is aware of the usual size in which a trader would deal. Why didn't anyone at Tullet's think it strange that Mr Park had 9,000 DTB lots when he had told Griffin he had 900, and pick up the phone?"
At least 80 independent futures traders working in London have been put out of business after the firm through which they cleared their trades, Griffin Trading Company, was brought down by the trading losses of John Park.
The Korean-born trader lost pounds 6.25m just before Christmas after his bet on the German futures market went spectacularly wrong. Traders are angry that the money they deposited with the firm in order to be able to trade has been used to cover Mr Park's losses.
In contrast to the usual practice in other major markets, London allows net margining, which means that the money deposited by each client in effect goes in the same pot.
One trader said yesterday that money they had deposited with Griffin's American parent, which sought bankruptcy last week, was still intact.
"What Liffe and the London Clearing House should be saying is that we stand by the market," said the trader. "No individual trader should be unable to resume trading.
"They should also pledge to lobby the Financial Services Authority to change the rules so that this cannot happen again. This has opened up a large Pandora's box. What if, instead of John Park, it was the XY pension fund that lost the money?"
Mr Park, who has an American passport, has not been seen since last week. He has not been at his London flat or at his mother's house in the country.
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