The case of the missing $600 million at MF Global gets murkier

posted at 2:05 pm on November 18, 2011 by Ed Morrissey

What happened to the $600 million missing from customer accounts at MF Global, the investment firm run by former New Jersey governor and Barack Obama confidante Jon Corzine?  After three weeks of intense investigation, no one seems able to find it — and it’s beginning to look like MF Global burned through it in an attempt to cover their own losses.  The New York Times has two reports from the last two days covering the probe, and in the first, the Commodity Futures Trading Commission seems ready to give up hope of finding the cash:

Nearly three weeks after $600 million in customer money went missing from MF Global, the search for the cash has been hampered by the bankrupt brokerage firm’s sloppy record-keeping, an increasingly worrisome situation that has left regulators frustrated and customers in the lurch.

The round-the-clock effort has consumed an alphabet soup of federal regulators and criminal investigators, with lawyers sleeping at open desks and each agency commandeering a different conference room at the firm’s offices. But as authorities comb through some 38,000 customer accounts, they are growing more suspicious about what went wrong at MF Global, the commodities powerhouse once run by Jon S. Corzine, the former Democratic governor of New Jersey.

“The lost money is sort of like a lost child,” said Bart Chilton, a Democratic member of the Commodity Futures Trading Commission. “Every day that passes is more and more concerning, and there’s less and less hope.”

MF Global didn’t bother to track its transactions, something that should have raised suspicions before the collapse:

As part of the effort, the Federal Bureau of Investigation has taken the lead in the interviews of former employees who can explain MF Global’s inner workings. The federal authorities have also taken control of an off-site emergency recovery system, where e-mail and phone records from MF Global were stored, said two people who also spoke on condition of anonymity.

Authorities are particularly focused on the final days of MF Global. In the run-up to the bankruptcy filing, clients withdrew their assets, trading partners closed out trades and others demanded more collateral.

Amid the flurry of activity, MF Global failed to register all the transactions in its books. Regulators must now reconstruct the ledger, dollar by dollar.

In today’s report, the Times states definitively that MF Global raided customer accounts to cover its own losses:

MF Global improperly diverted customers’ cash for its own use in the days before its bankruptcy, an act that regulators believe may help explain why $600 million of customer funds remains missing, people briefed on the investigation say.

Investigators have now zeroed in on hundreds of millions of dollars in suspect borrowing at the commodities and derivatives brokerage firm, which at the time of its collapse was run by Jon S. Corzine, the former Democratic governor of New Jersey. At least some of that money was used to cover trading losses at MF Global, regulators suspect, meaning the money may no longer be simply missing. It may be gone.

MF Global, like other brokers, can use customer cash if it puts up sufficient collateral. But the firm did not provide enough backing in late October, essentially taking free loans, said the people briefed on the investigation, who spoke on the condition of anonymity because the inquiry was continuing.

Investigators hope to find some cash, but it’s starting to look pretty bad.  They’re now speaking of finding “some” of the $600 million, perhaps in cash accounts from the frenetic trading that took place in the final days of the firm.  If they can’t find it, those “free loans” will look a lot more like embezzling, and there will be a lot of former customers that will be looking for blood as well as money in the weeks and months ahead.

Meanwhile, my colleague at The Week, Robert Shrum, rushes to Corzine’s defense:

Friendship has its claims; so does fairness. And in the wake of the bankruptcy of brokerage firm MF Global, the media’s portrayal of Jon Corzine, MF’s ex-CEO and a former Democratic senator and governor in New Jersey, strikes me as profoundly unfair — and not just because he’s a friend.

Corzine, one of the most principled and capable people I met in 40 years in politics, is a genuine progressive who ran for office for all the right reasons. He did so many right things. And now he’s been turned into a poster boy for all that’s wrong with Wall Street. Jon Stewart called Corzine “the one man [who] could embody the corporate-government-industrial complex in all its clusterf***-itude.”

The Murdoch press was eager to join in. What could be better for the propaganda machine than to hold up Corzine as the proof point for right-wing populism. One typical New York Post story led with a phrase —“Screw you, Jon Corzine” — that revealed as much about the paper’s inveterate hostility to his politics as it did to his company’s fate.

I think there’s some truth in this.  Corzine’s obvious and deep links not just to the Democratic Party but also to Barack Obama — he was Obama’s personal envoy to Wall Street this summer to drum up donations — made him an easy target for the Right.  Corzine hasn’t been charged with any crime, at least not yet, and it’s still possible that the missing customer money will be found, albeit a possibility that seems to shrink rapidly with every passing day.  It doesn’t hurt to refrain from jumping to conclusions until all of the evidence is on the table.

However, Shrum’s defense is entirely comprised of the political motivation he finds unacceptable in criticism of Corzine.  He extols Corzine not for his innocence in what is certainly a massive failure and possibly a massive theft, but because Corzine supported same-sex marriage and his opposition to the war in Iraq, among a laundry list of other political positions.  It’s a non-sequitur in this context, although Shrum is on more solid ground when he talks about his personal friendship for Corzine.

Shrum also omits one important part of the context of this criticism, which is the Obama administration’s class-warfare rhetoric over the last couple of months and the encouragement by Democrats of the Occupy movement, at least until the polling numbers fell off.  Obama picked Corzine to represent him on Wall Street while MF Global was busy crumbling from within; the Right didn’t do that.  Joe Biden bragged on more than one occasion that Corzine was the first person to whom they turned for economic advice.  Even if Corzine was nothing worse than incompetent and lost $600 million of customer money honestly, that’s still fair game for criticism.

And if a Republican President had linked hands with a man like Corzine and extolled his financial advice while demonizing Democrats as shills for the corporate 1%, something tells me that Shrum would be the first to scoff at the kind of defense that he offers in this essay.  In fact, we don’t even need to imagine it; let’s not forget how anxious the Left was to tie George Bush to Enron’s Ken Lay, thanks to Lay’s fundraising for Bush.  Sauce for the goose is still sauce for the gander, assuming that the gander gets cooked at some point in the MF Global meltdown.

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Corzine was the go-to guy for the Obama admin. Ask Biden.

lorien1973 on November 18, 2011 at 2:08 PM

we don’t need to cover this, let’s focus on newt and his freddie mac money instead
-lib talking heads

Shrum would be the first to scoff at the kind of defense that he offers in this essay.

you got that right Ed

cmsinaz on November 18, 2011 at 2:10 PM

Jon Stewart called Corzine “the one man [who] could embody the corporate-government-industrial complex in all its clusterf***-itude.”

I would call it the corporate-government-union complex and then agree absolutely.

DaydreamBeliever on November 18, 2011 at 2:10 PM

Again I will ask what is the difference between MF Global gambling with investors money and the US gambling with taxpayer money on Solyndra ?

William Amos on November 18, 2011 at 2:11 PM

One Voice.

aquaviva on November 18, 2011 at 2:11 PM

I would call it the corporate-government-union complex and then agree absolutely.

DaydreamBeliever on November 18, 2011 at 2:10 PM

It’s Fascism.

But why argue.

tetriskid on November 18, 2011 at 2:13 PM

Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise.

http://www.zerohedge.com/news/entire-system-has-been-utterly-destroyed-mf-global-collapse-presenting-first-mf-global-casualty

rrpjr on November 18, 2011 at 2:13 PM

brokerage firm’s sloppy record-keeping,

So that’s what they’re calling fraud these days.

rbj on November 18, 2011 at 2:13 PM

If there’s any humor in justice, Corzine & Bernie Madoff will be bunkmates.

bloviator on November 18, 2011 at 2:14 PM

Obviously Chris-Dodd was not strong enough to precent this matter. We definitely need a bigger more intrusive government to stop this stuff from happening.

WashJeff on November 18, 2011 at 2:15 PM

“The lost money is sort of like a lost child,” said Bart Chilton, a Democratic member of the Commodity Futures Trading Commission. “Every day that passes is more and more concerning, and there’s less and less hope.”

Okay Ed, two days in a row, and two stories of lost money and a blaise’ *shrug* over trying to find several hundred million lost dollars…….Yesterday, it was Chu’s turn to answer for the $500+million that was lost, today, Jonny “Vote for Me Pookie!” Corzine the decidedly not-governor of NJ. What the fark is going on??? If it was you or me that shorted the government a few hundred bucks on our taxes, they’d be damned sure to find it, right? But with these guys? Noooo. Now, I understand that there isn’t a pile of conveniently stacked $100 bills on a pallet that is lost lost, like in a closet somewhere–these losses span globally, but why the hell can’t these guys try to scrape together a few sleuths and recoup this damned money?? this is madness.

ted c on November 18, 2011 at 2:15 PM

MF Global, like other brokers, can use customer cash if it puts up sufficient collateral. But the firm did not provide enough backing in late October, essentially taking free loans

There were so many democrats at MF Global that they mistakenly thought they were working with taxpayer dollars instead of customer dollars.

Vashta.Nerada on November 18, 2011 at 2:16 PM

MoFoGlo.

Akzed on November 18, 2011 at 2:16 PM

What happened to the $600 million missing from customer accounts at MF Global, the investment firm run by former New Jersey governor and Barack Obama confidante Jon Corzine? After three weeks of intense investigation, no one seems able to find it — and it’s beginning to look like MF Global burned through it in an attempt to cover their own losses.

I think this was the assumption the second the general public heard “millions missing from customer accounts”.

They were the gambler who kept throwing good money after bad, claiming that their luck was bound to turn around. In this case, they were hoping for a bailout of Europe that still hasn’t happened.

teke184 on November 18, 2011 at 2:17 PM

Again I will ask what is the difference between MF Global gambling with investors money and the US gambling with taxpayer money on Solyndra ?

William Amos on November 18, 2011 at 2:11 PM

MF Global can’t raise taxes to cover their losses.

teke184 on November 18, 2011 at 2:18 PM

Well, bho has been out of the US for nine days and all countries he went to have banks don’t they? I do not trust bho one bit! The money HAS to be someplace. Money doesn’t vanish, does it?
L

letget on November 18, 2011 at 2:20 PM

I smell bailout!!!

cyclown on November 18, 2011 at 2:21 PM

Again I will ask what is the difference between MF Global gambling with investors money and the US gambling with taxpayer money on Solyndra ?

William Amos on November 18, 2011 at 2:11 PM

Investments in MF Global were voluntary.

Vashta.Nerada on November 18, 2011 at 2:22 PM

Arrest Jon Corzine – reenact Glass-Steagall. Right. F*cking. Now.

ernesto on November 18, 2011 at 2:22 PM

What happened to the $600 million missing…?

Did they check Obama’s campaign funds?

jwolf on November 18, 2011 at 2:22 PM

I’m guessing the libs are circling the wagons around Corzine now because there is even more nastiness to be revealed in the coming weeks.

Was Corzine using MF Global as a private backstop for European sovereign debt, at the request of both American investors and the U.S. government? It’s difficult to imagine in the post-2008 era that the CFTC (headed by Corzine’s old Goldman Sachs pal Gary Gensler) simply turned a blind eye to MFG being leveraged 100-1. This company was more than likely officially sanctioned by the U.S. Government, but then Corzine got greedy and started playing with his customers’ money, and it all fell apart.

rockmom on November 18, 2011 at 2:22 PM

It’s being routed to overseas accounts for eventual contribution to Obama-Biden 2012.

BuckeyeSam on November 18, 2011 at 2:23 PM

Arrest Jon Corzine – reenact Glass-Steagall. Right. F*cking. Now.

ernesto on November 18, 2011 at 2:22 PM

MF Global was a hedge fund, not a bank. Nice try though.

rockmom on November 18, 2011 at 2:24 PM

The issue is clawbacks. Under bankruptcy, a firm can roll back several months of transactions already completed — essentially saying that people who had been paid, already cashed the check, and already spent the money have to kick back the payment into the bankruptcy so that they, like everyone else, can receive pennies on the dollar.

If you’d been stealing $1M per day, wouldn’t you want to stall the bankruptcy as long as possible and hide the evidence that your transactions might be recent?

cthulhu on November 18, 2011 at 2:24 PM

Sure seems to me that the “MF” in MF Global, seems awfully appropriate.

av8tr on November 18, 2011 at 2:24 PM

Compared to the ponzi scheme master, Madoff, 600 million is just chump change to steal from clients. Corzine, epic failure, at being a corrupt thief.

karenhasfreedom on November 18, 2011 at 2:25 PM

And let us not forget that last summer, MF Global went out with a debt offering that included a specific clause telling investors they could be rebated money if Corzine left the firm for a U.S. Government position. This was unoprecedented, and clearly indicated that Corzine was a leading candidate to replace Tim Geithner. It strains credulity to believe that Gensler had no diea what he was doing at MFG until it crashed.

rockmom on November 18, 2011 at 2:26 PM

What is Glass-Steagall?

karenhasfreedom on November 18, 2011 at 2:27 PM

Did they check Obama’s campaign funds?

jwolf on November 18, 2011 at 2:22 PM

Beat me by one minute, just one short minute.

If not in Obama’s campaign coffers, maybe Corzine thought he could get the money back into the accounts before the legbreakers came to collect.

BuckeyeSam on November 18, 2011 at 2:27 PM

reenact Glass-Steagall.

ernesto on November 18, 2011 at 2:22 PM

Totally unrelated to this case, and even if MFG were a bank, Glass-Steagall would not have changed anything. Comingling of funds is the issue.

Vashta.Nerada on November 18, 2011 at 2:27 PM

What is Glass-Steagall?

karenhasfreedom on November 18, 2011 at 2:27 PM

Glass-Steagall was a law that mandated that commercial and invesment banking be separate legal entities. It was enacted in the 1930s and repealed at the turn of the century. Not relevant to this story.

Vashta.Nerada on November 18, 2011 at 2:29 PM

Money doesn’t vanish, does it?
L

letget on November 18, 2011 at 2:20 PM

It does is if a big obama buddy’s company goes underwater and everybody goes *whooooops!* I didn’t see the money, did you see the money? What money? Nope, unh uhh, I didn’t see it go nowheres…..

ted c on November 18, 2011 at 2:29 PM

What is Glass-Steagall?

karenhasfreedom on November 18, 2011 at 2:27 PM

Rockmom knows much more than I, but its repeal (signed by Clinton, which liberals love to forget) eliminated restrictions on traditional banks that precluded them from being engaged in the lucrative investment banking business.

BuckeyeSam on November 18, 2011 at 2:31 PM

The Murdoch press was eager to join in.

Where’s my picture of the “Not This Sh*t Again” guy?

Del Dolemonte on November 18, 2011 at 2:32 PM

In fact, we don’t even need to imagine it; let’s not forget how anxious the Left was to tie George Bush to Enron’s Ken Lay, thanks to Lay’s fundraising for Bush. Sauce for the goose is still sauce for the gander, assuming that the gander gets cooked at some point in the MF Global meltdown.

At least Ken Lay had the decency to die.

What say you, John Corzine?

BobMbx on November 18, 2011 at 2:33 PM

reenact Glass-Steagall.

ernesto on November 18, 2011 at 2:22 PM

Man, this is like drinking somebody else’s pee:

I agree with ernie.

[hurry up with that chaser..]

BobMbx on November 18, 2011 at 2:35 PM

The case of the missing $600 million at MF Global gets murkier…

Maybe. The follow-up question: do Obozo and Holder have ‘confidential’ bank accounts in Burma?

Both of them appear decidedly ‘UN-curious’; and their lack of outrage is note-worthy.

CPT. Charles on November 18, 2011 at 2:37 PM

I’m beginning to think this might impact his chance of becoming Treasury Secretary.

John Deaux on November 18, 2011 at 2:37 PM

There were so many democrats at MF Global that they mistakenly thought they were working with taxpayer dollars instead of customer dollars.

Vashta.Nerada on November 18, 2011 at 2:16 PM

You can tell Vashta is a conservative. He can see a difference between the two.

BobMbx on November 18, 2011 at 2:38 PM

One Voice.

aquaviva on November 18, 2011 at 2:11 PM

The comments at that link are hysterical.

NJ is now suffering with governor Chris Christie.

We need Corzine back in trenton
Itanium153 1 year ago

Corzine 2013!!! ARE YOU FIRED UP
Itanium153 1 year ago

Did you notice how this commercial had a musical quality? the applause came in at the perfect times and there was some really catchy background music. This was possibly the best campaign commercial I have ever seen.
bookgoddess650 2 years ago

chris christie is trying to prove that all the democrats that voted for obama in new jersey are now going to vote for him. but I would think that all the people that voted for obama would not care what christie says and listen to obama himself tell them who to vote for like in this video. CORZINE FOR GOVERNOR!
andyforthemaster 2 years ago

Love this video!! Corzine 09!!
Sebkelley 2 years ago

fiatboomer on November 18, 2011 at 2:39 PM

If there’s any humor in justice, Corzine & Bernie Madoff will be bunkmates.

bloviator on November 18, 2011 at 2:14 PM

Sandusky’s wife would be more just and humorous.

jdkchem on November 18, 2011 at 2:40 PM

In fact, we don’t even need to imagine it; let’s not forget how anxious the Left was to tie George Bush to Enron’s Ken Lay, thanks to Lay’s fundraising for Bush. Sauce for the goose is still sauce for the gander, assuming that the gander gets cooked at some point in the MF Global meltdown.

At least Ken Lay had the decency to die.

What say you, John Corzine?

BobMbx on November 18, 2011 at 2:33 PM

Heh!

herm2416 on November 18, 2011 at 2:47 PM

Corzine, one of the most principled and capable people I met in 40 years in politics, is a genuine progressive who ran for office for all the right reasons. He did so many right things.

This…again? How many times must we endure the ubiquitous progressive contention that supposedly good intentions warratnt a pass from responsibility for disasterous results?

Double-good-plus….FACE-PALM!

Archimedes on November 18, 2011 at 2:47 PM

Corzine, one of the most principled and capable people I met in 40 years in politics, is a genuine progressive who ran for office for all the right reasons.

That should have been a warning in itself.

bgoldman on November 18, 2011 at 2:51 PM

Commodity Futures Trading Commission seems ready to give up hope of finding the cash

Have they looked in Corzine’s bank account? He’s probably good for it.

He won’t be needing that money in prison, anyway.

iurockhead on November 18, 2011 at 2:53 PM

I feel like I’m living in a corrupt African country…

PatriotRider on November 18, 2011 at 2:53 PM

Okay, Shrum, is Corzine a well-meaning (by your lights) crook or just a well-meaning incompetent?

JEM on November 18, 2011 at 2:53 PM

Co-mingling funds is a polite phrase for using trust money to cover the Trustees personal losses…in other words it is simply embezzlement.

My guess is that a rogue Teleprompter did it.

Chu pleads stupidity. What can Corzine plead?

jimw on November 18, 2011 at 2:53 PM

He won’t be needing that money in prison, anyway.

Aw, that’s cute that you think a guy on Obama’s short list for Treasury secretary has any chance of going to prison. I remember back when I still believed this country was ruled by laws.

Fabozz on November 18, 2011 at 2:59 PM

Corzine hasn’t been charged with any crime, at least not yet

…….yet……….

As for Shrum…. Mussolini drained the Pontine Marshes and got the trains to run on time. I suppose Shrum would call him ‘a great guy’ as well.

GarandFan on November 18, 2011 at 3:01 PM

Let’s get back to the Cain campaign.. it is far more blogworthy. Everyone knows that Corzine ran a few campaigns well enough to get himself elected, and he probably hasn’t said anything stupid or funny in the last 48 hours.

kringeesmom on November 18, 2011 at 3:06 PM

Co-mingling funds is a polite phrase for using trust money to cover the Trustees personal losses…in other words it is simply embezzlement.

My guess is that a rogue Teleprompter did it.

Chu pleads stupidity. What can Corzine plead?

jimw on November 18, 2011 at 2:53 PM

Corzine can plead being from New Jersey… That means he’s stupid, criminal, & probably worse.

tetriskid on November 18, 2011 at 3:09 PM

$600 million? Chump change. Anyone could have misplaced that. I’m sure it will turn up. Someone probably just left it in their desk drawer. And everyone was investing in all those Euro government bonds. It was a sure thing, that’s why everyone was leveraging like Hell to buy. Corzine is a really smart guy. Honest as the day is long.

It is all just a big mistake, really. I mean, really. Except for those investments turning out badly, and nobody saw that coming. Ooopsie! And we’re sorry about that, which is all that matters, right?

novaculus on November 18, 2011 at 3:14 PM

You have to love how they phrase things in a way to make it sound better for Corzine than it really is —

what went wrong at MF Global, the commodities powerhouse once run by Jon S. Corzine, the former Democratic governor of New Jersey.

He just resigned on the 4th. The ink is not even dry yet and they are trying to make it look like his tenure at the helm of MF Global preceded his time as governor.

Ironwood297 on November 18, 2011 at 3:14 PM

just another corrupt goldman-saks douchebag with crony ties to big ‘gubmint.

maineconservative on November 18, 2011 at 3:15 PM

What’s the difference between Jon Corzine and Ken Lay?

Corzine is closer to Obama than Lay was to Bush.

JeffWeimer on November 18, 2011 at 3:19 PM

Corzine, one of the most principled and capable people I met in 40 years in politics, is a genuine progressive who ran for office for all the right reasons. He did so many right things.

As NJ governor, this a-hole blew smoke up NJ unions a$$es, jacked up social services spending, then demanded federal relief when the state’s financial problems entered an “exponential” phase.

The reason why Goldman Sachs & MF Global went into the tank wile he ran them, because he ran the companies like a Democrat. Its a lot easier to play with other people’s money.

There were so many democrats at MF Global that they mistakenly thought they were working with taxpayer dollars instead of customer dollars.

Vashta.Nerada on November 18, 2011 at 2:16 PM

I don’t know about how many Democrats were running MF global, but your statement says it all.

Now Corzine has created 3 financial failures to his credit:
1) Goldman Sachs, and
2) the State of New Jersey, and
3) MF Global.

Lets hope Obama doesn’t replace Geithner with this a-hole.

Danny on November 18, 2011 at 3:20 PM

Corzine, one of the most principled and capable people I met in 40 years in politics, is a genuine progressive who ran for office for all the right reasons. He did so many right things.

Like what? Leave New Jersey with a $60 billion unfunded pension liability? Refuse to lay off a single state employee while the state budget imploded after the 2008 fuinancil crisis? Sleep with the head of the biggest state empoyees union while he was negotiating a new contract with her?

And let’s not forget the lovely Lisa Jackson, who was chief of staff when all of this incompetence was happening, until Corzine promoted her to head the DEP.

Sheesh. If Corzine had done anything right at all he would have been reelected easily. The best you can say about him is that he was marginally less corrupt than Jim McGreevy.

rockmom on November 18, 2011 at 3:20 PM

Shrug can kiss my a**!

Corzine ran that company. Client money and assets are missing. Remember, deposit tickets for those customer who took delivery are gone as well.

Corzine is responsible, along with the CME and CFTC. This is crony capitalism at its worst. Sarbanes-Oxley says the head of the company is personally liable. Can’t wait to see Johnny cough up his own money to make the customers whole. Or, the CME, which guarantees customer money.

The investigators will figure out where the money went. Unless, Corzine was actually hand cash, physical cash, to JP Morgan, there will be a trail.

This goes deeper then anyone realizes now.

EliTheBean on November 18, 2011 at 3:24 PM

Corzine hasn’t been charged with any crime.

Neither has Joe Paterno.

In general, I agree with Ed’s remark about jumping to conclusions before the evidence is in. But I’m taken aback by Shrum’s defense which basically amounts to the same thing we’ve heard for Paterno, “He’s done some good stuff, so leave him alone.”

taznar on November 18, 2011 at 3:28 PM

the commodities powerhouse once run by Jon S. Corzine, the former Democratic governor of New Jersey.

Interesting phrase at the beginning of the cited article. Leads the casual reader to conclude that it was years ago that Corzine ran the business and that he is long gone rather than the fact he was the head of the company at the time of its collapse.

OTOH, I will give them credit for actually using the party affiliation adjective several times throughout the article.

Could we please stop calling them “Democratic” governor, mayor, etc? “Democratic” is a form of government, “Democrat” is a political party. The subtle inference is that other office holders are supporters of democratic processes.

AZfederalist on November 18, 2011 at 3:31 PM

Ironwood297 on November 18, 2011 at 3:14 PM

You beat me to it while I was reading the rest of the comments

The subtle inference is that other office holders are not supporters of democratic processes.

AZfederalist on November 18, 2011 at 3:31 PM

Fixed it for me

AZfederalist on November 18, 2011 at 3:35 PM

Amid the flurry of activity, MF Global failed to register all the transactions in its books. Regulators must now reconstruct the ledger, dollar by dollar.

This statement is a lie. These transactions, and the ‘books’, are all done electronically and there is a clear trail.

This is a fraud and any ‘reporter’ that is trying to pretend otherwise is contributing to the lie.

SOMEONE is guilty of stealing. There is no other possible explanation.

Freddy on November 18, 2011 at 3:39 PM

When it is determined that the money was gone and that MF’s clients were robbed I would be fully in support of the idea of seezing and selling all of the personal assets of MF’s management, starting at the top with Corzine, until people are made whole.

Stephen Macklin on November 18, 2011 at 3:46 PM

I think there’s some truth in this.  Corzine’s obvious and deep links not just to the Democratic Party but also to Barack Obama — he was Obama’s personal envoy to Wall Street this summer to drum up donations — made him an easy target for the Right.

Every day, all day, the firms trading counter parties (if not the firm itself) would have obsessively monitered MFG trading positions and required margin collateral. The money and assets needed for holding positions would have been a constant subject of discussion within MFG, because their counter parties would have forced the issue, and the senior most management of the firm would have been equally constantly involved. Not just Corzine, but every senior manager would have been aware and complicit.

This has nothing to do with ideology, with party or with electioneering. This is a Madoff level issue of lack of honesty. I believe they stole this money, and with intent.

MTF on November 18, 2011 at 3:47 PM

I don’t believe in entrusive government, but these kind of failures should stop. There is a board of directors and there are supposedly smart people at the top of the company. I believe they should be bonded for the price of the company and if not then give a percentage of money to sit on a board. Way to many of these boards are made up of congresstional members spouses and friends of the CEO. It’s not their money in the company so they just travel to meeting collect a salary and walk away from any trouble. The rules of directorship must be strengthen to force honesty and integrity in the boards. Lets start now. Thanks

Release on November 18, 2011 at 3:53 PM

SOMEONE is guilty of stealing. There is no other possible explanation.
-Freddy on November 18, 2011 at 3:39 PM

My impression too. Obviously we need a new law that says that in cases like this the Jon Corzines that “lose” that much money have to undergo extensive waterboarding until they say where the money went. Resistance would be overcome by gradually increasing the Drano content of the water.

It’s a shame we have such productive interrogation techniques and we don’t use them – esp. on such deserving robber barons. The entertainment value alone would be so high that videos of the interrogations could be sold generating large sums for charities.

Chessplayer on November 18, 2011 at 3:58 PM

There should be massive old media coverage of this Barack Obama confidante Jon Corzine.

Crickets

ama on November 18, 2011 at 4:05 PM

MF Global, like other brokers, can use customer cash if it puts up sufficient collateral. But the firm did not provide enough backing in late October, essentially taking free loans, said the people briefed on the investigation, who spoke on the condition of anonymity because the inquiry was continuing.

In other words, they knowingly stole this money from their customers. IMHO we’re long overdue to begin executing these perpetrators of multi-million dollar thefts.

Neo-con Artist on November 18, 2011 at 4:29 PM

From the Shrum article: “Corzine, one of the most principled and capable people I met in 40 years in politics, is a genuine progressive who ran for office for all the right reasons.”

Naming someone as a progressive is not a compliment. Progressive is the synonym du jour for socialist.

slickwillie2001 on November 18, 2011 at 5:33 PM

“principled” “a genuine progressive”

ROFLMFAO!

Shrum, you are an oxymoron.

disa on November 18, 2011 at 5:42 PM

IMHO we’re long overdue to begin executing these perpetrators of multi-million dollar thefts.

Neo-con Artist on November 18, 2011 at 4:29 PM

They should be put in cages like circus tigers, and paraded through the streets so people can spit on them.

disa on November 18, 2011 at 5:44 PM

Even if Corzine was nothing worse than incompetent and lost $600 million of customer money honestly, that’s still fair game for criticism.

If he is incompetent? This is the guy who “negotiated” New Jersey into a deal to help build a new tunnel to New York, which left New Jersey holding the entire bag for any cost overruns. As I recall, the project was already a couple of billion over budget before the first spade was turned over. Thank God for Christie being elected in time to quash it.

Only Biden could think that Corzine is a go to guy. Then again, compared to Chu and the DOE, he could be right as far as the current Administration is concerned.

parke on November 18, 2011 at 6:49 PM

The more crap like this goes down, the more I think that Iran could do us a favor by nuking DC.

Random Numbers (Brian Epps) on November 18, 2011 at 6:56 PM

For those who like conspiracy theories:
http://www.zerohedge.com/news/guest-post-mf-global-was-it-hit

For those who feel sympathy for traders burned in this debacle, say a prayer for me. I hope I get my “honestly earned money” back, too.

This plundering of MF has been compared to a bank looting all its customers’ accounts to cover its losses. And believe me, that’s what it feels like.

ziggyville on November 18, 2011 at 6:59 PM

Was Corine properly licensed ?

Did the FED give MF a pass on their audit process ?

and

ama on November 18, 2011 at 7:09 PM

They will track this from the back end. MF Global’s “sloppy bookeeping” means they weren’t posting the trades they made with other peoples money, OPM. Investigators will go to anyone that traded with MF Global and track it back that way. They will know who instituted the trades and the results of those trades.

Vince on November 18, 2011 at 7:37 PM

I remember back when I still believed this country was ruled by laws.

Fabozz on November 18, 2011 at 2:59 PM

Those were the days, eh.

Solaratov on November 18, 2011 at 11:16 PM

All bs aside, some identifiable person at MF Global was in charge of “Compliance”. That person’s butt is toast, as are those of other compliance staff working in the particular area involved.

Also, some identifiable executive had to authorize transfers from client accounts to the trading operation. Absent good and sufficient collateral, wrongfully taking client money to meet MFG obligations becomes a criminal act. Responsibility and accountability should go all the way up to the top. As a manager you are responsible for knowing what is happening, and for saying “no” when it is time to say no.

etaoinshrdlu on November 19, 2011 at 10:36 PM