Futures traders struggling to recover at least half of
their money from Griffin Trading, the collapsed clearing
house, face a new hurdle after fresh losses of up to $2
million emerged at the firm's head office in
Investigators of events behind Griffin's bankruptcy are
believed to have uncovered unauthorized trading by Scott
Szach, its chief finanical officer, which is estimated to have
cost the firm between $1.5 million and $2 million.
It is not clear whether Szach's alleged dealings are
connected with John Park, the Korean-born trader,
whose losses of almost $10 million on German government bonds
forced Griffin and GLH (Derivatives), a trading firm of
which he was a member, into insolvency just before
Griffin's collapse has caused consternation on the London
International Financial Futures and Options Exchange
(Liffe). About 100 traders who used the company
have been temporarily forced out of business after a big
chunk of their clients' money was taken by Mees Pierson,
the Dutch bank which cleared deals on behalf of Griffin on
Eurex, the German futures exchange. Despite this action,
the bank is still facing millions in losses.
Finbarr O'Connell, partner at accountants Grant Thornton
and joint liquidator to Griffin, said almost $5 million remained in
the firm's client account in London.
Whether all of this was returned to traders depended on
legal advice and their contracts, he said. The British Securities
and Futures Authority, however, said it would encourage
an accelearated interim payout if there were difficulties.
The affair has shocked many traders, who mistakenly
believed that client money had been "segregated" into
separate accounts at Griffin.