Jesse continues to keep the spotlight on this ongoing fraud, cover-up and example of the ruling oligarchy attempting to get away with the crime of stealing $1.2 billion right out of the accounts of customers while using what passes for law in this country to obscure their crime. Your money is not safe in any financial institution. Do not trust these jackals and thieves.
Forbes: Regulators and Trustees Suppressing Details on MF Global
I seem to recall predicting this coverup when the MF Global scandal broke at the end of October.
Eventually the regulators and financiers will spin a story and it might stick together. But there is also a possibility that it may come unhinged, and the coverup, not the theft of funds itself, will bring down careers and institutions.
And the scandal is much wider than MF Global and their unfortunate customers. This is not the sort of thing that those in positions of stewardship might wish to see come uncorked in an uncontrolled manner.
This ongoing farce with the financial sector should send a chill down the spines of all retail investors and the public.
It is good to see a respectable media publication like Forbes being so forthright in its ongoing coverage of the scandal, when the propensity to dismiss fraud and cheerlead the financier’s agenda is the primary impulse of much of the financial press and mainstream media.
If the full extent of the fraud, manipulation and insider dealing that has occurred, and is still taking place, in Washington, Wall Street and the City of London were made known, the public might react strongly in their righteous anger.
This is really appalling.
Forbes
The Neverending MF Global Story: Regulators Block The Truth
By Francis McKenna
January 9, 2012Instead of looking out for MF Global investors – and customers who are still waiting for their money – it looks like regulators and the bankruptcy trustees are busy suppressing information. Instead of full transparency, regulators and the trustees are holding onto crucial details that might tell us all who was asleep at the wheel when the broker/dealer and futures commission merchant (FCM) headed over the cliff.
Bob English, an independent trader and contributing editor to the blog, Economic Policy Journal, published a post this morning that raises serious questions about the Securities and Exchange Commission’s program of regulation for broker/dealers and, in particular, the agency’s role in keeping the truth from the public about what went wrong at MF Global.
We’re also being kept from the truth about other broker/dealers who may be putting risky trades on their books or whose controls over segregation of customer assets may be weak or non-existent.
“It seems that sloppy scanning and filing standards combined with preferential treatment for certain large brokers has substantially reduced the value of this part of the SEC’s public filing system. Since this is often the sole repository for disclosures about private companies, including broker dealers that do not have public holding companies, investors are being deprived of timely and critical information.
Even for those broker dealers that do have public holding companies, such as MF Global Inc., the financial notes of the broker audits disclose different, and oftentimes, more substantial information. Since it is now apparent that Louis Freeh, the former FBI Director cum MF Global Holdings trustee, is running cover for MF’s largest creditors, not the least of which is JP Morgan Chase, it is all the more critical that the integrity of the SEC’s public filing system be scrutinized.”
On November 4, 2011, days after the bankruptcy filing, I described in an American Banker column the information the regulators and investigators should be looking for:
“Since MF Global is a broker-dealer and a Futures Commission Merchant, PwC’s job went well beyond a standard audit. The auditor for a firm like this must annually review the procedures for safeguarding customer and firm assets in accordance with the Commodity Exchange Act. The annual audit must include a review of a firm’s practices and procedures for computing the amounts that, by law, have to be set aside in clients’ accounts each day. MF Global also had to send regulators an annual supplemental report from PwC. This report would describe any material inadequacies existing since the date of the previous audit and any corrective action taken or proposed.
I’m sure the CFTC wants to know if PwC ever documented any material inadequacies in MF Global’s controls over safeguarding customer assets. But wouldn’t they already know that? Regulators like the CME Group, the CFTC, the SEC, and FINRA received audited financial information annually, unaudited information semiannually and monthly reports that provided a capsule view of MF Global’s financial position. MF Global is required to perform calculations daily (by the CFTC) and weekly (by the SEC) to ensure that the proper amount of customer funds is set aside in the separate accounts.
PwC’s report to the SEC of internal control discrepancies for 2010, and there is one according to the filing index, is private. None of the auditor’s reports specific to the broker/dealer and FCM are available to the public on Edgar for 2011.
Is this just sloppy scanning? It’s no coincidence to me that auditor PricewaterhouseCoopers may also be playing a role in keeping uncomfortable or incriminating information from the public about its audit clients which include MF Global as well as Bank of America, JP Morgan, and Barclays…
Read the rest here.
Mary Malone says:
The MF Global customers swindled out of an astonishing $1.2 Billion need to act just like Bernie Madoff’s customers.
Madoff’s marks screamed bloody murder, called in every single chit in existence to fry Bernie’s ass ASAP.
The result?
Bernie goes down in record time. He’s sentenced to an eternity in a federal pen AND the victims get nearly all their money back.
Now, that’s justice.
MF Global customers need to get up off the mat, dust themselves off and go to war. They must object to the BK proof of claims, and scream they’ve been ripped off by crony capitalist Corzine at the top of their lungs.
Start telling their personal stories on how Corzine ruined their businesses and lives. Lay it all out there. This is no time to be polite. Use the media to tell your stories. Get attention and public sympathy.
Call in every single political chit – this is a Presidential election year, after all.
Use the BK courts to win back your rightful place at the front of the line.
Time to man up, MF Global customers. You have been raped. No time to crawl into a fetal position. Use every single weapon at your disposal, within the letter and spirit of the law to wage war and get your money back.
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10th January 2012 at 10:42 pm
Tim Murray says:
@Mary Malone
“Bernie goes down in record time. He’s sentenced to an eternity in a federal pen AND the victims get nearly all their money back.”
I can assure you that the Madoff victims have not gotten nearly all of their money back. I can also assure you, however, that the Madoff Trustee and SIPC employ a very talented and effective public relations firm. If you are ever in need of such a firm I highly recommend The Hastings Group in Washington DC. They are top notch.
11,000 investors invested through feeder funds and do not qualify for SIPC insurance or any portion of the Madoff estate. When the Securities Investors Protection Act was established in 1970 mutual funds, feeder funds, etc did not exist thus there is no provision to protect them or allow them to share in the estate of a bankrupt broker. This was an enormous oversight failure by Congress and security regulators. This just one of the gaping holes in protection for the small investor and it still exists – nothing has changed.
There were 5,128 direct customers but most of those (2,703) will not receive a dime either. These were mostly the retirement accounts and middle class savers. Only 2,425 customers out of over 16,000 will receive anything. And these are mostly the super wealthy professional investors and movie stars. The first distribution of customer property of $312 Million was made to these 2,425 customers averaging $130K after 3 years.
The amount of SIPC Coverage Committed is $797.8 Million but the trustee does not disclose how much has actually been paid and this is an advance by SIPC which gets reimbursed from the brokerage estate. It is not in addition to the estate.
To date the trustee and his law firm have collected $224 million in fees and have another fee request pending for $45 million. Other accounting and professional fees amount to hundreds of millions more. The total cost is expected to be $2 billion or more.
If you knew what I have learned over the last 3 years you would not be invested in anything that you track with a paper statement of account.
http://tinyurl.com/InvestorProtection
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10th January 2012 at 1:34 am
Nonanonymous says:
There’s a feeder fund issue in the MF Global scandal, as well. One would be led to assume the deafening silence and lack of details surrounding the case is because prosecutors are putting together a case. It seems that would not be the case. There have been relatively few prosecutions for white collar crimes, and those are just the crimes we know about.
Even calling MF Global failure a scandal is giving in to the spin. It was outright theft. If I understand it correctly, client funds were borrowed for other lines of credit. When the institution failed, the client funds were taken as collateral by foreign interests who refuse to return them.
Two things are wrong with this case. First, as this article points out, no transparency. There is no deterrent effect of prosecution with this kid glove handling of persons of interest. Maybe there is no justice anymore. Secondly, who were the foreign interests, the Russian mob, sovereign funds, who? Again, no transparency, and thus no justice.
The first American Revolution was fought because of the lack of redress over taxation. The lack of redress over justice for the individual in favor of those more powerful remains to be seen. This is in direct conflict the the US Constitution and Bill of Rights. This won’t end well, when the peasants revolt after everything of any value has already been stolen, and the US is indebted to the rentier class in perpetuity. There are two possible outcomes, a return to individual freedom, or a police state. It isn’t hard to figure out which direction we’re headed.
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10th January 2012 at 5:56 am
marissa says:
Listen to this burning-down-the-barn interview with Ann Barnhardt “Ann Barnhardt: The Financial System House of Cards Is Ready to Topple” on Financial Sense 1/04/2012.
This woman is absolutely on fire.
http://www.financialsense.com/financial-sense-newshour/guest-expert/2012/01/04/ann-barnhardt/financial-house-of-cards
Jesse’s Cafe Americain can eat her dust. Damn.
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10th January 2012 at 5:59 am
Dan Hannok says:
THANK YOU Tim Murray for telling it like it really is!! The Madoff victims did NOT recover most of their monies and the assertion by the other poster was totally wrong. Many billion$ were lost… never to be seen again.
This issue with MF Global is very troubling and speaks volumes on the many things that are still wrong in our financial system. Adequate controls, rules, oversight and enforcement (and punishment) are severely lacking. The average retail investor is quite exosed and I fear that there will be more examples like this in the future. If the public starts to lose confidence in the financial system due to this nefarious activity, then, massive amounts of funding can disappear quickly and the markets can fold and collapse.
It’s one thing if a company or sector has losses or collapses… it can sometimes restructure and rebound. HOWEVER, if the System collapses, then it is very difficult and many times impossible to fix.
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10th January 2012 at 7:42 am
eugend66 says:
” Mr. Trichet succeeds Dr. Jacob A. Frenkel, Chairman of JPMorgan Chase International and
former Governor of the Bank of Israel, who has headed the G30 since 2000. Dr. Frenkel will
now become Chairman of the Board of Trustees, succeeding Paul A. Volcker, former Chairman
of the Board of Governors of the Federal Reserve System. Mr. Volcker becomes Chairman
Emeritus of the G30.”
http://www.group30.org/images/PDF/G30%20November%2022%2011%20Press%20Release%20FINAL.pdf
Peace.
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10th January 2012 at 8:01 am
ragman says:
Ours is the most corrupt govt on the face of the earth.
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10th January 2012 at 8:12 am
Persnickety says:
Ragman – no, we are simply going down to the level that much of the world’s population has been living under for centuries. We are, perhaps, the most hypocritical government on earth, since no one trumpets more loudly their supposed commitment to justice and freedom.
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10th January 2012 at 10:23 am
AWD says:
Of course it’s being covered up. Corzine and Obama are butt buddies, so the orders trickle down from Obama to Holder to everyone else involved. The banksters, and JPM in particular, ended up with most of the $1.2 billion. When Corzine and his cronies can steal that much money and get away with it, it’s time for impeachment/coup/revolution. Not to mention Solyndra, “fast and furious”, NDAA and SOPA. Things are coming unraveled quickly, and it’s time to fight back, as MM says. Corruption on this scale demands action.
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10th January 2012 at 11:40 am
Mary Malone says:
@ Tim Murray: I stand corrected on Madoff. Had no idea that so few were compensated for so little.
I bought into the MSM stories on investor recovery. My bad.
Sounds like you have been duking it out – fighting for investor rights and recovery – my hat is off to you!
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10th January 2012 at 7:53 pm
FTL says:
Farmers Sue Jon Corzine Over Missing Millions
Montana farmers have filed a class action suit against former New Jersey governor Jon Corzine, charging that the failed financial firm run by Corzine stole millions from their accounts to pay off its spiraling debts, and that Corzine’s “single-minded obsession” with making MF Global a big player on Wall Street led to the firm’s collapse.
MF Global’s clients included 38,000 wheat farmers, cattle ranchers and others who “hedged” their crop prices by placing millions in MF Global accounts. Those accounts were supposed to be “segregated and secure,” according to the federal suit, meaning MF Global could not draw on those funds.
The lawsuit, filed on behalf of all 38,000 customers, alleges that when MF Global made a series of bad investments — notably in European debt — it began “siphoning funds withdrawn from segregated client accounts” to cover its debts
http://abcnews.go.com/Blotter/farmers-sue-jon-corzine-missing-millions/story?id=15321298
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10th January 2012 at 8:05 pm
Mary Malone says:
Opening salvo – Farmers Sue Jon Corzine Over Missing Millions
Awesome FTL. Should gather tons of evidence in discovery.
Now, will someone please slap those handcuffs on Corzine? Even in NJ, corruption is legal, (see pay to play sited on NJ Govt website) people here are incredulous that he has not been arrested yet.
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10th January 2012 at 10:30 pm
Administrator says:
Run On, Jon Corzine. Run On.
Posted by Ann Barnhardt – January 10, AD 2012 7:07 PM MST
Well, someone up in Montana has filed a class action lawsuit against Jon Corzine personally and some of the other top brass like Abelow on behalf of all 38,000 MF Global customers. Also named in the class action suit are PriceWaterhouseCoopers and J.P. Morgan. Beautiful. I hope the plaintiffs’ attorneys have their stuff together and accept outside help. There are some mighty large personal estates there. I think Corzine is worth $600 million alone. J.P. Morgan also has a few dollars laying around, too. But I reckon most of Corzine and Abelow’s wealth has probably already been moved into Switzerland and the United Arab Emirates. But, I’m glad someone is finally going after those jackals.
HERE’S THE LINK.
http://abcnews.go.com/ad/gmaintroad.html?goback=http%3A%2F%2Fabcnews.go.com%2FBlotter%2Ffarmers-sue-jon-corzine-missing-millions%2Fstory%3Fid%3D15321298%23.Twzp_Pmk58E
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10th January 2012 at 9:02 am
newsjunkie says:
Sorry, but I suspect the suit will be dismissed because of national security.
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10th January 2012 at 9:08 am