MF Global stole money from it’s customers. The government is still sorting through the messy details. One of the reasons it’s taking so long is because a lot of the funds went overseas and they have a different regulatory structure. We are only talking about money that commodity customers had on deposit in segregated company accounts. What about the money MF and Corzine stole from shareholders and bondholders? This has been crooked from the very beginning.
It’s rare, but there have been other times futures industry firms have gone bankrupt. Customers were always made whole because their money is kept in segregated funds. There is an orderly process to transfer positions and transfer funds from bankrupt clearing operations to fully funded ones.
In this case, that didn’t happen.
Here is the conspiracy theory that can be spun. See if you agree with it.
MF declared bankruptcy right away because they knew they stole money from their customers. Filing bankruptcy in a NY court gave them a friendly venue. They also filed under SEC regulations, not CFTC regulations. CFTC regs favor the customer, SEC regs on bankruptcy favor the bank. It’s a different process.
Second, former Democratic Senator and Governor and leading Obama fundraiser for Obama Jon Corzine was CEO of MF. Politically, having him do a well deserved perp walk wouldn’t play well. Obama needs all the feet on the street that he can raising money for him so he can try and overpower his Republican opponent with media. The Obama White House is helping to protect Corzine by turning the wheels of justice slowly.
Gary Gensler, CFTC chair, Obama supporter and best bud of Corzine has recused himself from the investigation. But if you don’t think he isn’t helping behind the scenes, you are naive.
Because they are in NY, and under the SEC, the CME and other commodity exchanges are having a tough time bringing a lot of firepower to bear on MF. MF wasn’t a classic SEC company. As a matter of record, the SEC side of their business was significantly smaller than the CFTC side.
The treasurer, Edith O’ Brien isn’t being given immunity from the federal government. You’d think that the treasurer than signed the checks would have a pretty good idea of what went on and who was involved. Why wouldn’t the government allow that one domino to fall in hopes of getting bigger fish?
The simple fact is the Department of Justice under Eric Holder isn’t really interested in blowing up a fraud case, one of the greatest thefts of private funds ever in US history, because it might taint the President in an election year. Holder takes marching orders from Obama.
A blind guy could finish a 1000 piece puzzle in a box faster than the government is trying to get to the bottom of the MF scandal. What do you think?
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