Industry Veteran on MF Global: "someone would be in jail right now if this were not Jon Corzine"

[stockholmer]

Remember the MF Global debacle? So just what's going on with the missing customer money and what does it mean for the future of commodities trading and regulation? And why isn't Jon Corzine in jail? Should he be? Backing up, MF Global is the firm that declared bankruptcy last October. As usual, the problem was leverage and debt. Huge positions on European sovereign bonds pushed the firm over the edge. The CEO was Jon Corzine, former CEO of Goldman Sachs, former US senator and governor of New Jersey. Customer money went missing in the bankruptcy, to the tune of $1.6 billion, according to the bankruptcy trustee.

Jon Corzine and other executives testified before Congress saying they didn't know where the customer money was. Then we heard from regulator Terence Duffy that MF Global "informed the CFTC and CME that the shortfall was real and customer segregated funds had been transferred out of segregation to the firm's broker dealer accounts." These customers range from farmers, to hedge funds, to famous trends forecasters like Gerald Celent (a Capital Account guest). Some reports say the money has vanished. It's still being searched for - there's customer money trapped overseas. And because of the way the bankruptcy has been treated, the customers are at the end of the line to get the money back, meaning MF Global's creditors (namely JP Morgan) got their money first! So what's the deal here? JP Morgan gets its money, some poor farmer gets screwed over, and Jon Corzine - what happens to him? He gets off scot-free? What is this -- a mafia operation?

We speak to Mark Melin, author and host of the Uncorrelated Investing Show, who is a veteran of the derivatives industry. He talks to us about the power of Too Big to Fail banks and the uber-connected-progeny they produce. Melin argues MF Global is the "Watergate" of our time, and says the way the Too Big to Fail Banks operate is not unlike a drug cartel. Melin argues, "the integrity of the commodities market has been put in jeopardy by this entire scandal that is unprecedented and done with certain people with regulatory power observing allowing this destruction to take place." He goes on to say, "if you compare how a Mexican drug cartel operates and apply it to how too big to failbanks operate there aren't a lot of differences. There is an exception, Melin notes, "the TBTF banks influence rules and regulations to make what should be fraud legal."

[SolutionisSolidarity]

1. Not defending Corzine, but it's pretty clear that the title quote is false.

CEOs don't go to jail when they are caught committing crimes.

[CAPHAVOC]

2. Maybe he has the goods on other people.

[DCKit]

3. As in "How many Congresscritters DIDN'T lose their money on MF Global"?

The 'important' accounts were paid off and off-the-books before the bankruptcy.

[CAPHAVOC]

4. Oh Well

I do not understand all the Mumbo Jumbo. It just appears crooked. Inconvenient. I guess the whole Apple is rotten.