[mojito]

Scary stuff. Read the whole thing.

[mojito]

Related:

http://www.freerepublic.com/focus/f-bloggers/2817790/posts

[circlecity]

Seems like victims would still be able to sue for breach of fiduciary duty.

[Blaine Fabin]

“A loophole appears to have allowed MF Global, AND MANY OTHERS, to use its own clients’ funds to finance an enormous $6.2 billion Eurozone repo bet.”

---

Adding emphasis on AND MANY OTHERS

I agree very scary.

[AnAmericanAbroad]

Reminds of the adage I’ve seen floating around the web.....

Give a man a gun, and he can rob a bank.

Give a man a bank, and he can rob the world.

ZeroHedge has a similar story going regarding this topic as well. Scary stuff, indeed.

[pabianice]

Hypothecation is the practice where a borrower pledges collateral to secure a debt. The borrower retains ownership of the collateral, but it is "hypothetically" controlled by the creditor in that he has the right to seize possession if the borrower defaults. A common example occurs when a consumer enters into a mortgage agreement, in which the consumer's house becomes collateral until the mortgage loan is paid off. The detailed practice and rules regulating hypothecation vary depending on context and on the jurisdiction where it takes place. In the US, the legal right for the creditor to take ownership of the collateral if the debtor defaults is classified as a lien.

Rehypothecation is a practice that occurs principally in the financial markets, where a bank or other broker-dealer reuses the collateral pledged by its clients as collateral for its own borrowing.

IOW, rehypothecation is institutionalized fraud in which a bank takes your collateral and loses it on one of its own bad loans.

[Graewoulf]

My question is: “ If Democrat Obama had been the head of MF Global, instead of Democrat Corzine, would Democrat Obama have been a better financial manager than Democrat Corzine? “

[OB1kNOb]

If this type of lawlessness isn't brought to justice and quickly and decisively, I predict that we will start seeing vigilante justice on the rise.

Ironically, Gerald Celente (of Trends Research) who happens to be one of the clients that had a big chunk of money stolen out of his account by MF Global has a favorite saying, "When people lose everything, and have nothing left to lose, they lose it." I hope he doesn't decide to put that statement into action.

[James Mott]

Corzine being a Democrat, it will be interesting to see if he gets the same treatment as the executives at Enron.