FCStone disposes of loss-making energy account
FCStone Group, an integrated commodity risk management firm, expects losses of $110m from an unnamed customer's energy trading account, which it disposed of this week.
The transfer of the positions and liability related to the account to a third party eliminates FCStone's future exposure. It previously provided clearing and execution services on the account on a third-party basis.
FCStone said it would need to set aside $90m in bad debt provisions in connection with the account for the second and third quarter, in addition to the $20m recognized in the first quarter of fiscal 2009. As such, it has revised the total bad debt provision related to the account up
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