Analysis: Criminal probe trail going cold at MF Global

[Eugene]

Source: Reuters

Analysis: Criminal probe trail going cold at MF Global

By Grant McCool and Nick Brown

Thu Feb 9, 2012 5:58pm EST

(Reuters) - When commodities brokerage MF Global imploded, the FBI and federal prosecutors were quick to launch an investigation to pursue what seemed obvious to outspoken regulators and lawmakers: laws were broken and crimes were committed.

More than three months later, it is far from clear that anyone will face criminal charges over the disappearance of more than $600 million in customer money as MF Global spiraled towards bankruptcy in the brokerage's final, frantic days in the last week of October.

So far, the MF Global investigation is not tracking the early progress of other high-profile financial scandals such as RefCo, where former Chairman Phil Bennett was arrested within days of the disclosure that the futures firm had been hiding losses for years.

Lawyers and people familiar with the MF Global investigation of the firm that was run by former Goldman Sachs head Jon Corzine say that even though the hunt is still on to find out whether or not officials at MF Global intended to pilfer customer money in a desperate bid to keep the brokerage from failing, the trail at this point is growing cold.

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Read more: http://www.reuters.com/article/2012/02/09/us-mfglobal-idUSTRE8181UB20120209

[JDPriestly]

1. Does Corzine have too many influential friends????

Did he insulate himself politically???

This could be a big problem if my questions have a yes answer.

[Demeter]

2. I think rather JPMorgan Has Too Many Balls in its hands

and I don't mean tools for sport.

They can't convict Corzine, because it would reveal JPMorgan stole the money, through an obscure paragraph in the new improved bankruptcy code which they probably wrote and inserted. It's like pulling a thread in a sweater, soon the whole garment is a mess of crumpled yarn. Take JPMOrgan down, and the entire shadow bank system collapses. Lots of paper-wealthy, powerful people lose it all. Of course, so does anyone else who lives on credit, if they haven't lost it already.

It's the biggest conspiracy and fraud the world has ever known. It's only now becoming known widely, or at least, knowledge that something is wrong is spreading. But we are nowhere near the climax, the great unravelling. I don't know if anyone alive today will live to see it resolved. That's how bad it is.

[dixiegrrrrl]

3. I would love to disagree with what you said

but I cannot.

Sigh...they are going to get away with it, aren't they?

[AnneD]

4. Truer words were ever spoken....

This is the biggest non-reported news story to date, except for Ron Paul's presidential campaign. When I tell my financial friends about it, they are shocked then sickend. If there ever was story they are trying to bury, this is the one.

The criminal probe has not gotten cold, they just want to hush it up. The thing is, this will not go away. They have fouled their own nest and in the end will pay dearly for it. I don't know how or when but they will pay.

[DemReadingDU]

5. +++

[westerebus]

9. The movie Swordfish.

Was about mis-direction. You get to see what they want you to see.

[Hotler]

13. "Lots of paper-wealthy, powerful people lose it all."

One can only hope. There is that word hope again.

[Ruby the Liberal]

6. But but but - they *found* all of the money!

In other people's accounts and all that. Nothing to investigate there, right?

[banned from Kos]

7. No one "stole" the money (certainly not Morgan) their books were a disaster

“Their books are a disaster,” Scott O’Malia, a commissioner at the Commodity Futures Trading Commission, told the Wall Street Journal in an interview two weeks ago. The newspaper also quoted Thomas Peterffy, CEO of Interactive Brokers Group Inc., saying: “I always knew the records were in shambles, but I didn’t know to what extent.” Interactive Brokers backed out of a potential deal to buy MF last month after finding discrepancies in its financial reports."

http://www.bloomberg.com/news/2011-11-25/mf-s-lost-cash-makes-you-wonder-about-goldman-commentary-by-jonathan-weil.html

Morgan simply got in line first because they knew this.

Corzine was duped. He started in 2010 when much of these losses had already occurred.

[westerebus]

8. On what do you base "these losses already occurred" ?

And a link if you could be so kind.

[banned from Kos]

10. from my prior link - MF had a long history of the same violations and audit chicanery

"In 2007, MF and one of its executives paid a combined $77 million to settle CFTC allegations of mishandling hedge-fund clients’ accounts, as well as supervisory and record-keeping violations. In 2009, the commission fined MF $10 million for four instances of risk-supervision failures, including one that resulted in $141 million of trading losses on wheat futures. Suffice it to say, Pricewaterhouse should have been on high alert.

On top of that, Pricewaterhouse’s main regulator, the Public Company Accounting Oversight Board, released a nasty report this week on the firm’s audit performance. The agency cited deficiencies in 28 audits, out of 75 that it inspected last year. The tally included 13 clients where the board said the firm had botched its internal-control audits. The report didn’t name the companies. One of them could have been MF, for all we know."

If I lost money at MF I would begin a class action suit against Price.


Of course I can't prove when the money was lost but its been a long record of failure predating Corzine.

[westerebus]

11. Let me give you some history.

Cargill Investment Services was sold to Refco. Refco was purchased by the Man Group that became known as MF Global.

Cargill/Refco would have been the 6th largest brokerage firm in the US.

The CBoT was bought by the CME.

So what?

CEO of Cargill Investment Services, Bernard W Dan.

CEO of CBoT when purchased by CME, Bernard W Dan.

CEO/COO of MF Global prior to Corzine, take a wild guess?

Now google DTCC and see if there is a member of the board of directors in 2009 mentioned above.

Next DTCC and MarkitServ and see what they do.

And just for fun, Board of Directors CFTC in 2009.

You know, the CFTC that fined MF Global $10 million in 2009 on a $141 million oops shit happens.

I don't mean to impune Mr. Dan as I'm sure he has no knowledge of any possible misconduct down stream.

I will say there is a difference between failure to manage and managing a failure.

As to the audits, well there's smoke and than there's mirrors.

This ought to keep you busy for a few minutes, got to go to work.

[banned from Kos]

12. I knew that Refco's former CEO, Bennett, is in prison for selling fake bonds.

I knew nothing about Bernard Dan.

It appears you are implying that the rot starts with this fellow. He left another position abruptly as he did with MF.

Interesting for sure - not sure I really follow you though.

[westerebus]

14. It doesn't start and it doesn't stop with one person.

The entire system is corrupt.

When a audit is done who supplies the "books"? The company.

Have you not heard the term "off the books" in the past twenty years? Swaps, refi's, and hypocanthation?

Bennet held $430 million off the books at Refco for years. His company had an estimated value of $4 billion before it blew up. That's when a billion was real money.

Goldman, Citi, BoA, JPM and the list goes on all do the same thing to some extent.

Lehman got caught short or was put short and how much were they worth?

What I'm saying is the 1% inside wall street are running a corrupt system enabled by the political class. One in the same?

If you look it is not that hard to figure out. Like a good detective, suspect everybody.

I use Dan as an example. He may be a poor manager that lacks people skills and misjudges the risks his companies have taken. I will leave that to you to decide for your self. Same with Mr Corzine.

One would think persons with their abilities and positions would be more aware of their surroundings.

What was Dan connected to and where was he when things happened?

Chicago is first on the list. ( that's a hint )

You can't have open markets, free trade, a level playing field, the rule of law, oversight and regulation and look around and see what is actually happening and call this capitalism or a democracy.

It is not about one person. It's about the relationship among many people who have money and power.

Price Water-house can audit all the books in the world and the result will be the same.

The CME group would really like you to keep looking in that direction by the way.

It's called mis-direction. Works like a charm. Right up there with "illegal immigrants".

Have you looked at DTCC? Have you found its connection with the department of Homeland Security yet?

Or Markit-Serv? That's a very charming group of lizards (no offense to komodo dragons intended).

And when you hear, no one knew...well, we couldn't have predicted...just know they meant you and me had no way of knowing and ... that's the way they like it... ah-hah-ah-hah... that's the way they like it...yeah that's the way they like it...

[dkf]

15. In MF Global, JPMorgan again at center of a financial failure

http://mobile.reuters.com/article/idUSTRE80I02520120119?irpc=932

(Reuters) - In late October, as MF Global Holdings Ltd teetered toward bankruptcy, Jon Corzine phoned his close-knit circle of Wall Street friends for help.

His firm, facing demands from customers and other firms for cash, needed to sell billions of dollars in securities to raise the money. As the week progressed, MF Global executives came to believe that JPMorgan Chase & Co., one of MF Global's primary bankers and a middleman moving that cash, was dragging its feet in forwarding the funds.

Corzine phoned Barry Zubrow, then JPMorgan's chief risk officer, to question the slow payments. Corzine also called William Dudley, president of the Federal Reserve Bank of New York, to update him on MF Global's status and told him that payments were slow to arrive from JPMorgan and others. Dudley said he'd monitor the situation.

The delays contributed to a serious cash shortage at MF Global, according to people familiar with the matter. These people say the firm started trading one day in late October with $600 million in cash and spent the whole day selling securities, only to end with just $200 million in cash.

http://mobile.reuters.com/article/idUSTRE80I02520120119?irpc=932