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To: accountclosed who wrote (14239)	12/31/1998 8:55:00 AM
From: Cynic 2005	Respond to of 86076

It looks like a 10m loss, not 10b. ------- Griffin files for bankruptcy amid derivatives crisis By Nikki Tait in Chicago and Clay Harris and Vincent Boland in London Griffin Trading, the US derivatives firm whose UK branch is at the centre of the biggest crisis in London's derivatives markets for nearly four years, filed for bankruptcy last night in Chicago. A lawyer for Griffin said the filing for Chapter 7 bankruptcy, which allows a trustee to be appointed to run the firm, had become the "only viable option". He said Griffin had been "out of compliance with various regulatory agencies" both in the US and Europe, and there had been no opportunity to infuse capital to cover the European losses. The action followed the closure of Griffin's London branch by UK regulators earlier yesterday. The crisis, the biggest since the collapse of the UK investment bank Barings in 1995, was sparked by a £6.2m ($10m) loss incurred by an independent trader who exceeded his authorised limit by 10 times just before Christmas. The trader, John Park, had cleared his trades through Griffin. The episode has raised wider questions about UK regulation of the multi-billion-dollar London derivatives market. More than 100 other traders, known as locals, on the London International Financial Futures and Options Exchange (Liffe) who cleared through Griffin have had their capital frozen, even though it was in segregated accounts, and may lose half of it. At least two thirds of the local traders affected had no connection with GLH (Derivatives), a London company also closed yesterday by the UK's Securities and Futures Authority. According to individuals familiar with his trading, Mr Park bought 9,000 contracts - a large position for an individual trader - for German government bonds by the close of business on December 22. He continued to buy while the market moved against him. Such a position would have required a margin of £10m, but Mr Park had only £1m lodged - sufficient to cover the 940 contracts that he disclosed to Griffin on December 22. He continued to buy early on December 23, even though the market continued to fall. Mr Park's interest reached 9,400 contracts. ICS MeesPierson, which acted as clearer for Griffin, froze the accounts of all locals who cleared through Griffin, even though they were segregated. MeesPierson declined to comment. Mr Park did not return calls. John Foyle, Liffe's deputy chief executive, said locals could not remove their capital without SFA permission. "This has the effect of protecting the customers to ensure that their funds and market positions are dealt with in an orderly and fair fashion," he said. Two local traders said the SFA had said they might get back 40 to 45 per cent of their money within two to three weeks. Griffin applied to withdraw as a clearing member of the Chicago Board of Trade and Chicago Mercantile Exchange and transferred customer positions to another firm.