Yes... it is true... Discount Securities Ltd has bitten the dust but unlike prior failures (Francis Thuo & Conmen + Nyaga stealbrokers) the CMA is doing a Chapter 11... so the firm will continue in business while another partner is sought to inject funds into DSL.
I think the CMA's actions makes better sense than just closing it down but buyers want a 'clean' license.
Options:
1) CMA & NSE to accept the debts of DSL while suing the current owners for recoveries. Then sell the 'clean' firm to other investors.
2) CMA & NSE to put the firm in receivership & sell the license. Use the proceeds to pay off claims. This is similar to what happened at FT & Co. Best option.
3) Ask buyers to buy the firm 'as is' but with a backstop for losses. This is harder to achieve but saves the CMA & NSE compensation fund lots of moolah. NIC Bank bought 60% of (Not so) Solid Securities & are still paying for it!
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Discount Definitely Discounted Posted: October 13th, 2008, 11:48am CDT