Report Hints at Possible MF Global Suit (NY Times fails to ID Corzine as Democrat, Obama Bundler)

MF Global‘s bankruptcy trustee is hinting at taking legal action against the brokerage firm’s top executives, blaming them in a new report for engineering a “risky business strategy” and ignoring “glaring deficiencies” in internal controls.

In accusing Jon S. Corzine and other MF Global executives of “negligent conduct” that may have accelerated the firm’s demise, Louis J. Freeh, the trustee for MF Global Holdings and a former director of the F.B.I., laid the groundwork for potential litigation.

The 124-page report filed in federal bankruptcy court early Thursday leveled its sharpest critique at Mr. Corzine, the former chief executive who was once the governor of New Jersey.

“Corzine and management knew, or should have known, that these factors were contributing to a precarious liquidity position that ultimately spelled disaster for MF Global,” Mr. Freeh wrote in the report.

TWO THINGS NEED TO BE DONE NOW:

(A) They need to go after Bill Clinton---Last Dec, a former MF Global employee accused former president Bill Clinton of collecting $50,000 per month through his Teneo advisory firm in the months before MFG careened towards its Halloween filing for Chapter 11 bankruptcy, reports Human Events.

Teneo was hired by MF Global’s former CEO Jon S. Corzine to improve his image and to enhance his connections with Clinton’s political family, said the employee, who asked that his name be withheld because he feared retribution, according to HE. The Teneo contract with MF Global lasted at least five months, the souce said. “The board cancelled it after Corzine resigned.”

The source, who is no longer associated with MF Global, said Teneo is a dual-track company with one side devoted to merchant and investment banking and the other side set up to provide image and strategy consulting services. Clinton is the chairman of the company’s advisory board.

The trustee for investors threatened to sue JPMC bank if they did not return the monies.

(B) They need to mobilize the Bank Secrecy Act---in which banks are required to establish, implement and maintain programs designed to detect and report suspicious activity indicative of money laundering and other financial crimes.

“The Bank Secrecy Act was enacted to protect the public from harm by identifying and detecting money laundering from criminal enterprises, terrorism, tax evasion or other unlawful activities,” the special agent in charge for Internal Revenue Service Criminal Investigation, explained.

L/E needs to examine Corzine and Clinton's bank accounts

<><> Joint bank accounts might be used to facilitate the transfer of of govt funds. MFG monies may pay for personal and private expenses, credit cards, real estate sunsidies and vehicle purchases.

<><> To cover their tracks, fake invoices might be created to show that money deposited into accounts was being used for legitimate investment purposes.

The scheme might be advanced by issuing phony statements of payments from financial sources that actually covered the transfer of funds for MFG insiders own use.

<><> L/E is directed to get ahold of: (1) copies of MFG checks, (2) wire transfers, (3) account statements, (4) invoices, (5) bills, (6) delivery tickets, (7) correspondence including e-mail, contracts, loan agreements, and, (8) any other books or records. L/E should also explore (a) monies paid to brokers, sub-brokers, (b) family members, (c) mortgage brokers, (d) financial managers, and, (e) real estate agents, brokers, and developers.

<><> L/E should scrutinize MFG bank accounts for suspicious activites: (A) large deposits, (B) funds transferred from one account into another, (C) frequent requests for withdrawals.

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