Posted on 12/13/2011 8:20:20 PM PST by JustTheTruth
Today, in advance of their sworn testimony, each witness to the Senate Agricultural Committee's MF Global hearing was requested to disclose what their prepared remarks would be. Sure enough, CME executive chairman Terry Duffy did that, and his prepared testimony can be found here. In and of itself there was nothing unexpected about said speech, the relevant section of which has been transcribed below. Where things got very ugly for Corzine, is when Duffy literally veered from the script, and added three unexpected sentences, catching everyone in the committee off guard (including those who had given up on the testimony which came just after Corzine's) and which according to most news wires could have buried Corzine's defense strategy, exposing him for a liar under oath, and potentially costing him his freedom. The video of the relevant 2 minutes is attached below.
First: here is what the Duffy prepared remarks should have been:
Our auditors returned on Sunday, October 30th because we learned from the CFTC that the draft segregation report for Friday, October 28th, which had been provided to the CFTC that day, showed a $900 million dollar shortfall in segregation caused by an “accounting error.” Our auditors, working with the CFTC, devoted the rest of the day and night Sunday to find the so-called accounting error. No such error was ever found. Instead, at about 2 am Monday morning, MFG informed the CFTC and CME that customer money had been transferred out of segregation to firm accounts. Transfers of customer funds for the benefit of the firm constitute serious violations of our rules and of the Commodity Exchange Act. MFG was taken over by a SIPC Trustee on Monday. However, before the SIPC Trustee stepped in Monday, the segregation report for Thursday, October 27th, which had shown not only full segregation compliance but also $200 million in excess segregated funds, was corrected by MFG to show a deficiency of $200 million in segregated funds. Apparently based on MFG’s segregation reports, additional transfers out of segregation occurred on Friday.
And here is what they ended up being: revised text in bold.
Our auditors returned on Sunday, October 30th because we learned from the CFTC that the draft segregation report for Friday, October 28th, which had been provided to the CFTC that day, showed a $900 million dollar shortfall in segregation caused by an “accounting error.” Our auditors, working with the CFTC, devoted the rest of the day and night Sunday to find the so-called accounting error. No such error was ever found. Instead, at about 2 am Monday morning, MFG informed the CFTC and CME that customer money had been transferred out of segregation to firm accounts. After receiving this information CME remained at MF Global while MF Global attempted to identify funds that could be transferred into segregation to reduce or eliminate the discrepancy. A CME auditor also participated in a phone call with senior MF Global employees wherein one employee indicated that Mr. Corzine knew about the loans that had been made from the customer segregated accounts. CME Group has provided this information, the names of these individuals to the DOJ and CFTC who are investigating these matters. Transfers of customer funds for the benefit of the firm constitute serious violations of our rules and of the Commodity Exchange Act.... etc.
The only question we have is: why?
I’ve always wondered why the remarks have to be provided before the kabuki theater begins. I’ve assumed it’s to enable insider trading.
Good, I’ve always thought Corzine was scum. Lock him up!!!
Who is he fooling.
Laws no longer apply to DEMOCRATS, and all THREE of these clowns are maxed-out Obama 2012 donors.
You’ll notice the non-Fox media isn’t clamouring for Obama or Clinton to RETURN the stolen MFG money, haven’t you?
Never underestimate the ability of a Democrat to escape justice.
That “one employee” better be under lock and key.
I think that what is really going on behind the scenes is a battle over who has priority claim on the wrongfully “loaned” customer assets: the derivative claim holders (who were at least partially paid), or the customers whose assets had been secretly pledged as collateral for MFG’s highly leveraged bets which went against them.
The lid is being kept on that epic private debate because the public and political outcry resulting from honest transparency on the subject would favor the unsuspecting and victimized clients... even though current bankruptcy law clearly gives priority to those with claims on the derivatives. The last thing the international bankster regime can afford is to have their world thus rocked by actions that would make their derivatives scheme unravel and expose their insolvent asses further.
Is it true that Obama’s re-election warchest has about $900M in it? [/jk]
bfl
Yeah, but it's not like he was taking steroids while playing baseball.
So what if he lied to Congress? The ex-Senator will never go to jail for it.
Where did you hear that ?
See? Corzine "loses" something like $900M, so I joked that Obama suddenly had $900M in his election fund.
OH:)Thanks ClearCase_guy.
you lived up to your name! Good job!
It's like a TV show. The Congresscritters (morons) have to have their writers (staff people) develop a script for them beforehand so they don't sound like the morons they really are.
Not one in ten of these people 'representing' us in congress has a clue how the world works. They are just tools with nice hair cuts and expensive suits. Kind of like Dan Rather. Most would starve to death left to their own devices. The staff people (i.e. the permanent government) really run the show.
It's show biz.
” Is it true that Obama’s re-election warchest has about $900M in it? “
Given the proximity of Soros to power, the amount to re-elect Obama is better said to be.....unlimited.
I always love the sound of a 24 karat gold ring pinging amongst the rods of a cold hardened steel cage!
Didn't you forget the $535 million Solyndra money?
CME clearly doesn’t want any misunderstandings of how overnight (Thus/Fri) money was moved out right from underneath their noses and then over the weekend missing money ballooned to over a trillion just before the receiver/trustee took over.
I read where even in a bank failure, bank depositors are third in line to get their money back esp. if the insurance fund runs dry.
Here, investors that had cash deposits don’t even qualify for the insurance fund (SIPC) due to a loophole in the law (lobbied for by Corzine).
Besides that, if these losses stand then trading/clearing houses like CME need to instill some kind of confidence that their holding of deposits won’t be subjected to outright theft. Bad for business, ya know.
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