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Regulator: MF Global shifted millions last week (may have tried to avoid detection)
Yahoo ^ | 11/2/11 | Daniel Wagner - AP

Posted on 11/02/2011 10:14:07 PM PDT by NormsRevenge

WASHINGTON (AP) -- MF Global, Jon Corzine's embattled securities firm, moved millions in missing client funds last week and tried to avoid detection, a regulator said Wednesday.

MF apparently made "substantial transfers" of customer money after an on-site audit last week, said the regulator, CME Group Inc.

CME is a private company that oversees firms such as MF Global on behalf of federal regulators. It also operates exchanges where MF Global traded investments.

The money was moved in a way that "may have been designed to avoid detection," CME said in a statement.

MF Global filed for bankruptcy protection Monday after a disastrous bet on European debt. It was the eight-biggest U.S. bankruptcy and the first major Wall Street firm to fail because of bets on European debt.

CME's statement suggests that MF Global executives rushed hundreds of millions out of client accounts as the company slid toward bankruptcy last week. The company acknowledged that the money was missing early Monday morning.

...

MF Global's failure is the latest public setback for Corzine, who was head of Goldman Sachs and governor of New Jersey before joining the company. He had hoped to build MF Global from a brokerage into an investment bank.

Under Corzine's leadership, MF Global started making more trades for its own profit, a practice known as proprietary trading. Those bad trades triggered its worst-ever quarterly loss.

MF Global's credit was downgraded to junk status after it acknowledged the loss last week. Its stock plunged, and business partners required it to put up more money to guarantee its bets. The result was a cash crunch that forced MF Global into bankruptcy.

(Excerpt) Read more at finance.yahoo.com ...


TOPICS: Business/Economy; Crime/Corruption; Extended News
KEYWORDS: corzine; global; mfglobal; proprietary; regulator; shifted; trading

1 posted on 11/02/2011 10:14:09 PM PDT by NormsRevenge
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Key-man Corzine unlocks value for MF Global
International Business Times

NEW YORK, Aug 4 (IFR) - Since spinning off from Man Group plc in 2007, MF Global has had a tough time of it. But after reporting its first profitable quarter in a year and pricing a difficult bond offering, the broker-dealer looks on its way to better days, thanks in part to one key appointment last year.

Almost immediately after naming former New Jersey governor and Goldman Sachs chief Jon Corzine to be CEO in March 2010, MF Global started to show signs of improvement. Costs were cut and revenues were increased, bringing profits closer to hand.

This fact was not lost on potential bond investors, who -- before the key appointment -- had made it prohibitively expensive for MF Global to raise funds in the high-grade market.

To put investors at ease this time around MF Global took an unusual tack in marketing its US$325m offering of five-year notes on Tuesday. Twice bitten by failed attempts, the firm wasn't too shy to give investors what they wanted.

The bond agreement includes a key-man covenant. Should Corzine depart his executive post before July 1 2013 as the result of being appointed to a federal position by the President of the US, the interest rate on the notes will increase by one percentage point.

While that will only give investors another US$3.25m collectively, its inclusion in the filing made a difference. It's important to note that investors won't be compensated if the chief exits for any other reason. President Obama, investors are aware, is reportedly considering Corzine for Treasury Secretary.

2 posted on 11/02/2011 10:28:42 PM PDT by NormsRevenge (Semper Fi ... Godspeed .. Monthly Donor Onboard .. Obama: Epic Fail or Bust!!!)
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To: NormsRevenge

Corzine - a member of the party which must not be named.


3 posted on 11/02/2011 10:43:51 PM PDT by vbmoneyspender
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To: vbmoneyspender
Corzine - a member of the party which must not be named.

Yup. A whole big story about a guy who was a Senator, a Governor, and a major financial backer of the party currently in power in the United States, and not a single, solitary mention of the name of that party in the entire article.

4 posted on 11/02/2011 10:54:21 PM PDT by Steely Tom (Obama goes on long after the thrill of Obama is gone)
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To: Steely Tom

For some strange reason, after reading this, what crossed my mind was the old adage “There is no honor amongst thieves” And we sure have been blessed with them.


5 posted on 11/03/2011 1:09:23 AM PDT by saintgermaine
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To: NormsRevenge
President Obama, investors are aware, is reportedly considering Corzine for Treasury Secretary.

This, as of August. Wonder if Corzine can do an equally good job "unlocking" value for the US?

6 posted on 11/03/2011 4:57:14 AM PDT by 6SJ7 (I'm an AmeriCain!)
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To: NormsRevenge

Corzine Walks with $12 million. Only in America can someone run a company into the ground, lose million of investor’s money and walk away with $12 million. What’s wrong with this picture. Why wasn’t Corzine money on the line?


7 posted on 11/03/2011 5:08:00 AM PDT by steveab (When was the last time someone tried to sell you a CO2 induced climate control system for your home?)
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To: NormsRevenge

If Jon doesn’t go to jail, Obummer will hire him.


8 posted on 11/03/2011 5:17:56 AM PDT by New Jersey Realist (America: home of the free because of the brave)
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To: NormsRevenge; CutePuppy; Condor51; stephenjohnbanker

NOTE The MF Global theft has been upgraded to $1.5 BILLION —-double the original $700 million figure.

LAUGH BREAK Reports say client monies were illegally transferred out of MF Global accounts in a manner “that evaded detection”………....watta relief, nice to know Corzine and cronies did telegraph their illegal activities. LOL.

There’s so many ways Wall Street thieves sneak money from clients—WS knows how to make money disappear faster than a cream puff at a Weight Watcher weigh-in.

L/E should checkout three corporations Corzine registered in Delaware—known as a super-secret financial haven—more secretive than Switzerland.

Corzine also traveled to Israel several times as governor—many observers wondered why, since there was no official reason for JC to be there. Israel is the only place in the world where one can debark, go to a bank with a suitcase full of cash, and no one asks where it came from or if taxes were paid on it.

Madoff musta had a neat way to steal clients’ money—-the NYC Lipstick Building housing his Ponzi operation was owned by Israel. Monies might be laundered through pumped up lease rates and other bldg fees to the owners, that were then transferred to Israeli banks.

Madoff also made a nice campaign contribution to Corzine.


9 posted on 11/03/2011 6:53:22 AM PDT by Liz (The rule of law must prevail. We canÂ’t govern ourselves by our personal point of view.)
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To: NormsRevenge

So, if someone works at this firm does that mean they are an MF’er? That would make Corzine one of the biggest MF’ers in the country.


10 posted on 11/03/2011 6:55:04 AM PDT by AD from SpringBay (We deserve the government we allow.)
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To: Liz

Wow. But the Feebies are investigating. Everyone feel better now?


11 posted on 11/03/2011 6:56:27 AM PDT by mewzilla (Forget a third party. We need a second one.)
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To: mewzilla

LOL——yup, I, myself, am breathing a sigh of relief——those Feebs really know how to investigate cases of fraud. LOL.


12 posted on 11/03/2011 7:03:39 AM PDT by Liz (The rule of law must prevail. We canÂ’t govern ourselves by our personal point of view.)
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To: Liz

What I’d like to know: What did the admin, regulators, and ratings agencies know and when did they know it. Oh, and the Fed. Must not forget the Fed.


13 posted on 11/03/2011 7:06:46 AM PDT by mewzilla (Forget a third party. We need a second one.)
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To: mewzilla

Five minutes with MF Global’s books-—and I’ll tell the feds in exquisite detail exactly where the missing money is.


14 posted on 11/03/2011 7:18:36 AM PDT by Liz (The rule of law must prevail. We canÂ’t govern ourselves by our personal point of view.)
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To: Liz

'series', I hope he's taken to the Mat by the Feds and spends a veeery long time in prison. He'll make Bubba and Tyrone a good 'wife'. They'll pass him around to their Lifer friends for any favors owed (snicker).

['Fitz' should be brought in to prosecute the sleaze-ball. He'll go after Corzine until he makes him cry for mercy.]

15 posted on 11/03/2011 1:58:20 PM PDT by Condor51 (Yo Hoffa, so you want to 'take out conservatives'. Well okay Jr - I'm your Huckleberry)
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To: Liz; NormsRevenge; All
Henry "Hank" Paulson, undoubtedly, saved Goldman Sachs when he wrested control from then CEO John Corzine in 1999. Corzine lost the power struggle and left GS just before it issued IPO and went public. Corzine made more than $400M from the GS public offering.

Corzine was considered essential for MF success and its ability to attract clients and funds. When the rumors surfaced recently about his possible appointment by Obama to the post of Treasury Secretary, replacing Tim Geithner, the firm had to come up with a scheme to create an inexpensive key-man insurance with the specific clause guaranteeing his stay with the firm.

Corzine seems to have been trying to rehabilitate himself and prove that he can build another "mini" Goldman Sachs. It was his drive to aggressively remake MF brokerage business into investment / trading firm that directly led to excessive leverage and quick demise of centuries-old brokerage firm.

He should have known better. In 1998 Corzine was a part of the expert group that was summoned to help develop a response and the strategy to deal with massive leveraged trade losses by the hedge fund Long Term Capital Management (LTCM) and unwind the interest rate and currency derivatives trades and the firm itself. LTCM had made highly leveraged (50:1 - 100:1, by some accounts) bets on currencies, particularly Russian ruble, that went bad during financial "Asian contagion" in 1997-1998.

Yet the generally safe "repo-to-maturity", trades that MF was executing for its own account, turned sour on both solvency risk (potential of default on its massive bet on some Eurobonds, just like AIGFP underwriting CDSs) and on liquidity risk (need for collateral, which MF didn't have because it made much more money through excessive leverage, just like LTCM).

Corzine got hoisted on his own petard. He got caught simultaneously in AIGFP and LTCM mistakes.

From What happened at MF Global - Reuters blog, 2011 November 01, by Felix Salmon

From long, but fascinating article:
Did accounting help sink Corzine's MF Global? - Reuters blog, by Bethany McLean, 2011 November 01


16 posted on 11/03/2011 7:10:07 PM PDT by CutePuppy (If you don't ask the right questions you may not get the right answers)
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To: Liz

” Corzine also traveled to Israel several times as governor—many observers wondered why, since there was no official reason for JC to be there. Israel is the only place in the world where one can debark, go to a bank with a suitcase full of cash, and no one asks where it came from or if taxes were paid on it.

Madoff musta had a neat way to steal clients’ money—-the NYC Lipstick Building housing his Ponzi operation was owned by Israel. Monies might be laundered through pumped up lease rates and other bldg fees to the owners, that were then transferred to Israeli banks.”

Liz, you never cease to amaze me with your financial “ street brains “

Thanks for the info.


17 posted on 11/03/2011 9:13:32 PM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: CutePuppy; Condor51; stephenjohnbanker; thouworm; Grampa Dave
........in the spring of 2010, Corzine had just lost reelection despite massive help from Obama/Biden----who campaigned in NJ several times----the Obama WH was put at JC's disposal. Obama starred in JC ads that ran constantly on on costly NY media---secret rallies were held to marshall the illegal vote and a "Peruvian Pac" endorsed Corzio. Corzio bragged he had 20,000 union people on the ground to get out the vote in a dominant Dem-registered state and spent some $60 Million of his own money on the race.

================================================

Corzine was brought in to head MF Global by his W/S crony and ex-Goldman partner Chris Flowers (Flowers' firm had invested in MF Global).

More on Corzine/Flowers: Flowers oversaw Gov/Sen Corzine's "blind trust" (belly laugh is appropriate here). US Sen Corzine used his federal office to vote in a tax break for a Japanese bank in which he was invested----Flowers was the one that negotiated the bank deal. "Financial genius" Corzio told inquiring reporters that "he had no idea" the bill benefited him.

(waiting for hysterical laughter to die down)

===========================================

As Governor, Corzio appointed G/S buddy, Brad Abelow, as state Treasurer----the two controlled ALL NJ assets. Other WS types were appointed to key govt jobs.

Corz/Abelow then formed an investment vehicle----later saying they had no idea it was illegal for govt officials to do so.

During Corzio's watch, billions of state assets disappeared and several state money pots went bankrupt, with no explanation as to why---the $82 billion state pension fund dropped some 25% (that they know of).

18 posted on 11/04/2011 8:00:48 AM PDT by Liz (The rule of law must prevail. We canÂ’t govern ourselves by our personal point of view.)
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To: All


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19 posted on 11/04/2011 8:01:59 AM PDT by musicman (Until I see the REAL Long Form Vault BC, he's just "PRES__ENT" Obama = Without "ID")
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To: Liz

” -Flowers was the one that negotiated the bank deal. “Financial genius” Corzio told inquiring reporters that “he had no idea” the bill benefited him.

(waiting for hysterical laughter to die down) “

Sounds like Pelosi and the “Visa” stock : )


20 posted on 11/05/2011 5:53:52 AM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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