Posted on 12/13/2011 7:45:39 AM PST by ken5050
Senate Agricultural Committee hearing on MF Global bankruptcy just starting. Corzine will testify later. First witnesses are MF Global customers, to talk about the impact of the bankruptcy on their lives and businesses. Also scheduled to appear is the trustee for MF Global, who is expected to provide details of what happened, and, oh yeah..where's the money now, the $ 1.2 billion...
What will be most interesting, IMHO, is that given that this is a Senate committee, controlled by the Dems, how the Democrat senators question Corzine, especially those from swing states...the degree of agressiveness, even hostility, they display, will be telling.
In her opening comments, Stabenow ( who faces a tough election) seemed pretty serious ( I know, I know, that's hard to believe) which may mean that the Dems feel that they have to go after Corzine. We shall see.
As I've written here before, it makes NO sense that they can't figure out where the $$ is. ALL transfers in and out of MF Global are done by wire, EFT..and there's a clear record of when, where, and how much each wire was for. It's like your cell phone bill. Each call is listed, the number dialed, the time of the call, and the duration. So they know exactly who got the $$, and when they received it.
Corzine was not able to remove the customer funds by himself. It required most of the key back office personnel to do this. And they all had to know that it was 100% illegal to do so.
Yet not ONE objected, or blew the whistle, and called the regulators. This speaks greatly to the corporate culture that predominates today on Wall Street.
So, why did they go along? My thoughts..FWIW..they were told this at the last minute..told that it woliuld be put back in a day or two..it was a temporary glitch, BUT if they didn't agree, the firm would go under, and their jobs would be lost. So they went along.
I suspect that many are now working out deals with the Feds, to name names and provide direct testimony as to who exactly ordered the customers' funds to be removed from the accounts.
Since I believe that there will be direct testimony that Corzine ordered this, and possibly written records as well, Corzine is toast. The Dems will toss him under the prison bus. Better to do it now, ASAP..as far removed from the election as possible.
FYI
I've considered one other possibility. Is it possible that MF's accounting controls were so sloppy that they had been commingling funds for a long time, and just didn't fully know which funds were to be segregated as customer funds?
If so, Corzine is an idiot for not knowing anything about the firm's control structure, and so is the CFTC, and the auditors. But, in that case, you'd have more of a steaming pile of constant malfeasance than the focused smoking gun of a particular set of transfers. It could also explain why the trustee hasn't been able to unravel the accounting mess so far.
I've considered one other possibility. Is it possible that MF's accounting controls were so sloppy that they had been commingling funds for a long time, and just didn't fully know which funds were to be segregated as customer funds?
If so, Corzine is an idiot for not knowing anything about the firm's control structure, and so is the CFTC, and the auditors. But, in that case, you'd have more of a steaming pile of constant malfeasance than the focused smoking gun of a particular set of transfers. It could also explain why the trustee hasn't been able to unravel the accounting mess so far.
Pardon my ignorance, but couldn’t the missing money be “losses” from the failed investments?
If someone were to buy $10,000 worth of say, Enron stock and Enron went bankrupt, wouldn’t the $10,000 appear to be missing?
http://finance.yahoo.com/blogs/breakout/real-victims-jon-corzine-mf-global-bankruptcy-131108203.html
“.....The gist of Corzine’s defense is that he simply couldn’t understand where the money went. It’s been a performance somewhere between a drug-addled teen trying to track down his keys and Michael Corleone’s testimony in The Godfather II. Corzine totally doesn’t know where the money is and if anyone working for MF Global did anything untoward the titular leader of the firm at the time had no way of knowing about it.
An eviscerating article in Sunday’s NY Times called into question just how hands-off Mr. Corzine was. Citing inside sources, the Times says “Mr. Corzine compulsively traded for the firm on his Blackberry during meetings, sometimes dashing out to check on the markets.”
I’d like someone to dig into how the heck MFG got and kept its primary dealer status as long as it did.
I just cannot figure out why the Senate Agricultural Committee is questioning this thief? Did he break any farming laws?
They bought stuff on margin and the value declined making it necessary to come up with cash to cover the margin call. They ran out of their own cash and dipped into the cash in customer accounts. That is, they co mingled customer funds on account with the trading funds. More margin calls, more cash needed etc.
The practice is like the government dipping into the SS trust to co mingle the SS funds with those on General Fund Account.
They were betting on the come. The come never came
Finally the jig was up. They no longer could cover their losses. it was over. All the money is gone
“Corzine is an idiot for not knowing anything about the firm’s control structure, and so is the CFTC, and the auditors.”
Then he must be an idiot! But idiots are not exempt from jail time!
From MF Global’s 10 K for the period that ends March 31, 2011.
“Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this annual report, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In addition, no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during the fourth quarter of our fiscal year ended March 31, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.”
http://www.sec.gov/Archives/edgar/data/1401106/000119312511145663/d10k.htm#tx172225_13
The first goods to be traded on commodity markets were cotton, wheat, corn, etc. So the Agriculture Committees (he testified foe the House’s A.C. last Thursday) have legislative oversight of commodity markets and dealers.
Bill Clinton was getting paid 50K per month from MF.
He and Corzine know each other.
Corzine knows where the money went and where it is.
He is getting “grilled” by senate democrats so he can get away with being ignorant of any of the operations.
But if he was a baseball player accused of using steroids, then he would be in a heap of trouble.
crony criminals.
Commodities trading.
Thank you for the thread.
“cannot figure out why the Senate Agricultural Committee is questioning” Just guessing: I heard MF Global Co was over 250 years old (nice going, Jon). I’ll bet that alot of their long-time investors were farms businesses; before Corzine tried to glam it up and screwed the pooch.
wonder where Jon ends up next
he was a big winner in the fake dot.com scam, was a cheat at Goldman Sucks, as governor of N J and now at MF.
Thanks for the headsup.
As Confuscious say-—”Tis far better to own up to being a blithering idiot than to admit to money laundering and tax evasion.”
December 13, 2011
MFers uncomfortably dumb on missing $$
By KAJA WHITEHOUSE, NY POST
Jon Corzine is back on Capitol Hill today for what is expected to be a repeat of last week’s grilling over the collapse of MF Global. And like last time, victims of the brokerage firm’s demise should prepare to be disappointed. This go-round, the fallen MF chief has been called before the Senate Agriculture Committee to answer questions about $1.2 billion in missing client cash as well as his $6.3 billion bet on risky European debt.
Following in Corzine’s footsteps, two of his ex-lieutenants are expected to echo his claims of ignorance with regard to the missing money. Taking a cue from Corzine’s testimony last week, MF’s President and COO Bradley Abelow will claim distress over the missing funds.
(NOTE: Gov Corzine appointed his G/S crony, Brad Abelow, as NJ Treasury Secy. The two financial geniuses controlled of all NJ assets, and proceeded to form an “investment company”...... then claimed ignorance when told this was illegal.)
The execs are scheduled to testify after MF customers—— two farmers and a grain operator-——among those who have seen up to $5.5 billion in supposedly safe brokerage accounts frozen while regulators comb through MF’s books in search of the missing money.
Re Corzine, you said:
“Then he must be an idiot! But idiots are not exempt from jail time!”
I’d prefer a civil solution—if he forfeited a majority portion of his personal fortune, it would put a serious dent in the amount of funds missing.
I’d add some community service, too. Maybe he could teach finance!
MF reinforces the impression of criminality permeating the entire financial and regulatory system.
As the CIA says---the crooks always leave a paper trail.
Give me five minutes with the MF books, and I'll tell you where the missing money is.
Roberts just asked Corzine directly if he had given an order to move the funds..Corzine is hedging..NOT a clear denial..they know what’s up..all three are apeing Sgt. Schultz..
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