This is (potentially) HUGE

[UPDATED 11:40 am EDT] The announcement that Sentinel Management Group Inc has asked the Commodity Futures Trading Commission for permission to suspend redemption has potentially huge implications.

Sentinel operates in the niche business of holding the excess cash—over normal margin requirements—for futures market participants, including hedge funds, futures brokers, commodity trading advisors, and similar entities. The inability of Sentinel’s customers to access their cash balances could have, at best, interesting implications if those traders cannot meet margin calls.

While Sentinel is barely a pimple on the wider money-market world, and in the overall scheme of things insignificant in the futures markets, it operates in a specialized niche where the consequences of its failure may spread out of all proportion to its size.

Dear Client:
Sentinel Management Group Inc
Aug. 13 2007
(via TheStreet.com)

(UPDATE: Google is now reporting the Sentinel website as under construction. An archive view of the site is below (click for larger image):

Earlier: At the time of writing, the Sentinel website is not responding; it is not clear whether that is because of traffic, or because it has been deliberately taken off line.

Comments

[P_Off]

What a fiasco; obviously my money which was one of the many institutional clients that had its trading account deposited with Sentinel, is now gone and I do not expect to see it in the futures! I am enamored with Sentinel's management group marketing; claiming "manage risk" & "safe & secure" is a misnomer. It should read; "as crooked as an old hickory shaft!" and "we take unduly risks at your expense."

I cannot tell if SFM Inc. had on record, risky subprime mortgage backed securities as collateral with its lenders and one night, this paper was repriced OR if greed overtook rational risk mitigation policies and they levered themselves into oblivion. All I can say with high confidence is that my money is tired up in this ridiculously mismanaged circus with the likelihood of a poor outcome.
P_Off

[madmilker]

dang! ...with Mr B (Federal Reserve) America's biggest private bank adding nearly $120 billion in liquidity into the banking system and cutting its discount rate to 5.75 percent....Sentinel couldn't talk the O' fart out of $1.6 billion to cover all the mistakes the managers of this company have done.
The only thing the Fed has done is bailout all the stiff shirt self-centered "my sh!! don't stink" a!!holes on Wall Street and the greedy Corporate Lending Companies that got their a!! stretch over a 12" fence post giving out all those dollars to people that don't have a pot to "p" in are a window to throw it out.
But it ain't over by a long shot...cause that little 4ft lady has $1.3 trillion dollars to jerk and pull chains all over the World .....and the stockholders of the Federal Reserve (private bank) is gonna run out of ink trying to keep up with the printing of all that paper that ain't gonna be worth wiping their butt with.....dang! by that time the US dollar will be worth $0.14