Posted on 12/08/2011 7:05:09 PM PST by Texas Fossil
As the first former U.S. senator to be subpoenaed by Congress in more than a century, Jon Corzine testified Thursday about the “last chaotic days” of MF Global, the trading firm that declared bankruptcy under his watch.
Corzine said he was “stunned” to learn that the firm could not locate hundreds of millions of dollars in client money in the days before the firm’s collapse, and said he had no idea where the money had gone.
(Excerpt) Read more at latimesblogs.latimes.com ...
Prison?
Yes.
Remember where the money is? Not going to happen.
Much of the losses were “off book” entries. Yes there are records, but the question is ownership control of the lost funds.
Huge Scam from day 1.
This is how I see it also.
It already has blown over at democraticunderground. I could not find a single story about this one percenter stealing money from farmers. I thought this is what they were against? Where is the OWS crowd on this?
It’s certainly lucky that he knows where his own funds are.
I'll take (B) for $500, Alex.
If just one person (conscience? desire to be first to go states' evidence?) flips, then Corzine (and his confederates) are toast, n'est ce pas?
.
A legal loophole in international brokerage regulations means that few, if any, clients of MF Global are likely to get their money back. Although details of the drama are still unfolding, it appears that MF Global and some of its Wall Street counterparts have been actively and aggressively circumventing U.S. securities rules at the expense (quite literally) of their clients.
MF Global's bankruptcy revelations concerning missing client money suggest that funds were not inadvertently misplaced or gobbled up in MF’s dying hours, but were instead appropriated as part of a mass Wall St manipulation of brokerage rules that allowed for the wholesale acquisition and sale of client funds through re-hypothecation. 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.
If anyone thought that you couldn’t have your cake and eat it too in the world of finance, MF Global shows how you can have your cake, eat it, eat someone else’s cake and then let your clients pick up the bill. Hard cheese for many as their dough goes missing.
Current estimates for the shortfall in MF Global customer funds have now reached $1.2 billion as revelations break that the use of client money appears widespread. Up until now the assumption has been that the funds missing had been misappropriated by MF Global as it desperately sought to avoid bankruptcy.
Sadly, the truth is likely to be that MF Global took advantage of an asymmetry in brokerage borrowing rules that allow firms to legally use client money to buy assets in their own name - a legal loophole that may mean that MF Global clients never get their money back.
(Excerpt) Read more at newsandinsight.thomsonreuters.com ...
http://newsandinsight.thomsonreuters.com/Securities/Insight/2011/12_-_December/MF_Global_and_the_great_Wall_St_re-hypothecation_scandal
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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.
posted on Thursday, December 08, 2011 11:15:50 AM by pabianice
Somehow Soros is connected to MF Global...
Most evidence must by now be shredded or liquidated..
There are so many conspiracys its hard to keep up..
Jon is only surprised that he got caught out so quickly.
December 05, 2011-—Report: Bill Clinton Reaped Big Bucks from Corzine Firm Before Collapse-—MF Global Employee Links Clinton to the Bankrupt Firm
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 the brokerage 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, reports HE.
Two of the three founding partners are very close to the former president and his wife, Secretary of State Hillary R. Clinton. They are Douglas J. Band, who is the former president’s counselor and has served on his personal staff since 1995 and Declan Kelly, who earned the “Hillraiser” status in the secretary’s 2008 run for president for bundling more than $100,000 for the campaign.
Another prominent member of the Clinton political family is Tom Shea. Shea is a senior vice president for Teneo Strategy and served as Corzine’s chief of staff, when Corzine was the governor of New Jersey.
http://www.reuters.com/article/2011/12/06/us-mfglobal-agriculture-idUSTRE7B509620111206
Besides what you read in that link, when that money went missing from those private accounts, clients who were on margin got a call telling them their account was at zero dollars and need to come up with the required maintenance money by the end of the trading day or their position(s) would be liquidated to meet the margin requirements.
Congress or whoever is trying to close the loophole but trying to slam the door after the horses ran away and the barn burnt down accomplishes what?
Don’t think the insurance pool is going to be tapped on this one since using client’s money was all legal and above board. Can’t wait to see the highlighted print in the House Contract.
Maybe they thought they could benefit by being on the same team as a crook. That’s why some people invested with Bernie Madoff too. They assumed he was exploiting insider information and didn’t realize they were the ones being rippied off.
Liz: “IOW, rehypothecation is institutionalized fraud in which a bank takes your collateral and loses it on one of its own bad loans.”
So, my stock broker can legally use my stock portfolio as collateral for their business loans? This shouldn’t be legal for the simple reason that it’s not their money. Of course, legal or not legal doesn’t have a lot of meaning in a nation ruled by crooks.
Wall Street makes money disappear faster than a cream puff at a Weight Watcher weigh-in.
The only way this criminal loser should be “stunned” is with a cattle prod. Don’t taze me, bro!
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