Man Financial and the Core Club contra-indicator…

February 28, 2008

images8.jpegJudging by what’s happening at MF Global (MF) today, it looks as if belonging to the ultra-exclusive Core Club may just be a contra-indicator. Footnoted regulars may remember that last month we footnoted about the sudden departure of CFO Amy Butte, whose parting gifts included continued Core Club access for the next 18 months.

On Jan. 4, when the company formerly known as Man Financial announced Butte’s sudden departure and her plans to “pursue other opportunities”, the stock was trading at around $29 a share. This morning, after the company announced that a rogue trader, who was fired immediately, was responsible for a $141.5 million in losses, the stock fell nearly 20% on the news.

Is a well-respected CFO, which by all accounts Butte was, leaving suddenly with little explanation, always a warning sign? How about excessive perks, like continued membership at a club that costs $55,000 a year to join? Not necessarily. But the two of them together seem to have created a pretty volatile cocktail. Even more interesting is if it turns out that Butte had an inkling of something unusual going on.

Dealbreaker has more here on the situation at MF, and as always, the comments are pretty interesting.

Leave a Reply