Wednesday, 16 November 2011

MF Global: Where Did the Money Go?

Referring back to Gerald Celente’s rant, it does seem that the collapse of MF Global and the activities of master-thief Jon Corzine is significant.

MF Global went bankrupt October 31 after losing on big bets on European debt but has 'lost $800 million of clients' funds (including Gerald Celente's).
It indicates, according to Max Keiser that it is not only pensioners’ money that is being looted but also the money that belongs to the 1 %.
This indicates, according to Max Keiser that the global crisis has reached a new stage, having gone from a liquidity crisis to a solvency crisis- and now , to a a systemic crisis where the whole fabric is crumbling.

15 November, 2011

When you’re a “Master of the Universe” like Jon Corzine, taking huge risks and betting billions of dollars on European government bonds is no problem—it’s fun! It’s what you do!

But when it comes to finding $600 million of missing client funds when your firm, MF Global, collapses into bankruptcy, that’s a different matter. Responsibly keeping track of client money, keeping accurate books and records—those are the basic skills that this Master of the Universe apparently lacks.

Indeed, acting prudently and putting your clients’ interests ahead of your own is kind of boring. And it is becoming painfully obvious that the Wall Street titans who ran MF Global can’t find $600 million.

As Rick Perry so memorably put it: Oops.

The drama of missing customer money that is unfolding from the wreckage of MF Global is enough to turn your stomach. Simply put, where on earth is the $600 million in MF Global customer funds?

According to a report in Tuesday’s Wall Street Journal  [subscription required for full article], the hundreds of millions of dollars missing from MF Global accounts may have disappeared four days before the firm filed for bankruptcy at the end of October.

Regulators are trying to assess whether hundreds of millions of dollars in customer accounts were transferred in the week before the firm’s collapse. In a highly suspicious finding, regulators from the Commodity Futures Trading Commission say that those transfers were not recorded in MF Global’s general ledger.

“We’re still trying to assess how far back this goes,” said Thomas Smith, a CFTC official, according to the Journal. Mr. Smith made his comments on Monday before the Senate’s agricultural and banking committee.

The CFTC believes the missing money could still be somewhere inside MF Global, but admits that is a “remote possibility,” according to the Journal.

Here is the fundamental question: How, in late 2011, can we still have a system that allows this to happen?

The segregation of customer funds, a cardinal rule in our securities industry for the safety of investors, was of no importance at MF Global. And apparently, it had no real interest in keeping accurate books and records.

We have to ask: Is MF Global a possible re-run of Madoff, Stanford and the other scandals from the darkest days of 2008 and 2009? Let’s hope not, but as the days pile up with no answer to the mystery of the missing funds, the question has to be asked.
Disclosure: Zamansky & Associates are securities attorneys representing customers against Wall Street institutions in arbitrations and state and federal court litigations.

MF Global Missing Funds May Be ‘Massive’ Ploy, Chilton Says

Nov. 10 (Bloomberg) -- The $593 million shortfall in client money at MF Global Holdings Ltd., the broker that filed for bankruptcy on Oct. 31, appears to result from a “massive hide- and-seek ploy,” Bart Chilton, a commissioner at the U.S. Commodity Futures Trading Commission, said today.

The agency took the rare step of publicly announcing its investigation, which began on Oct. 31, saying it was in the public interest to confirm the enforcement action. Jill E. Sommers was named as the senior commissioner during the probe, after Gary Gensler, the agency’s chairman, recused himself.

“This isn’t just a lost and found inquiry; it’s a full-on effort to get to the bottom of what appears to be a massive hide-and-seek ploy,” Chilton said in an e-mail statement.

“It’s a distinct possibility, some would say probability, that somebody has done something with the money, and that it’s not going to be ‘all of a sudden discovered’ with an innocent explanation,” Chilton said. “If that’s the case, it’s patently illegal. I don’t know yet. Our investigation will uncover that, and we’re aggressively pursuing this.”

Gensler recused himself from the investigation because of his history with Jon S. Corzine, the former head of MF Global. Gensler worked with Corzine at Goldman Sachs Group Inc. and during his time as a Senate aide, while Corzine represented New Jersey as a U.S. senator.

“I have complete confidence in the dedicated men and women in enforcement to carry out the necessary investigation to get to the bottom of what happened,” Sommers, a Republican, said in a statement.

The CFTC also began a review of futures brokers to determine if client funds are properly segregated. The initial review will include between 10 and 12 futures brokers and the CFTC hasn’t set a deadline for the review, a person familiar with the review said.

Here is Max Keiser’s reprt on MF Global

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