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We Need an MF Global Grand Jury

Posted by Larry Doyle on January 30, 2012 9:53 AM |

I still very much have the “sense on cents” that many on Wall Street and in Washington desperately wish that l’affaire MF Global would just fade away.

Let’s work hard to make sure that does not happen and that the MF Global customers who may NEVER see THEIR money again at least receive some justice in return.

NEVER see THEIR money again? Is that right? 

As The Wall Street Journal highlights this morning, Money from MF Global Feared Gone:

Nearly three months after MF Global Holdings Ltd. collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation.

As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a “significant amount” of the money could have “vaporized” as a result of chaotic trading at MF Global during the week before the company’s Oct. 31 bankruptcy filing, said a person close to the investigation.

Vaporized? What? Bull$&^%!!

Money does not vaporize. Money is misappropriated. Money is stolen. Money is redirected. Money is lost as a result of investment and trading activities BUT money does NOT vaporize.

Many officials now believe certain employees at MF Global dipped into the “customer segregated account” that the New York company was supposed to keep separate from its own assets—and then used the money to meet demands for more collateral or to unfreeze assets at banks and other counterparties as they grew more concerned about their financial exposure to MF Global.

Investigators also are examining other scenarios that have gained traction in recent weeks, such as the possibility that MF Global suffered steep losses on investments made using customer money. Officials investigating the case have looked into whether such investments were appropriate under rules at the time.

As money poured out of MF Global, much of it likely passed through J.P. Morgan Chase & Co. and other banks where the securities firm had accounts, as well as trade-clearing partners such as Depository Trust & Clearing Corp. and LCH.Clearnet Group Ltd., people familiar with the matter said.

What do we need now? The truth.

From whom do we need to get it? All those involved, starting with former MF Global CEO Jon Corzine. (He’s the one on the far right in this picture. That would be President Obama on the left, Anna Burger, former Secretary-Treasurer of the SEIU, and Robert Rubin).

Think Jon is hoping his friends might be able to help him? You think?

How might we get the badly needed truth? A grand jury.

Let’s hear from AG Eric Holder, SEC chair Mary Schapiro, CFTC head Gary Gensler, and FINRA head Richard Ketchum. Whom do you people represent and whom are you charged with protecting? The American public at large and specifically the customers of MF Global whom have likely lost $1 BILLION+? Or do you represent and protect those more intimately involved in the Wall Street-Washington Incest?

Might President Obama, Ms. Burger, and Mr. Rubin have an opinion on this situation? I would venture to believe that each of these individuals would like to see actions taken that would help restore confidence in our markets. Right? One might think? Hello…??

I have an opinion. Sense on Cents is calling for a grand jury in this case.

The American public and MF Global customers should know that truth is being pursued and justice will be done. We are either a nation of laws in which we have equal justice under the law …or we are not.

In my opinion, the only way we may get the truth and justice is to know that all parties are compelled within a grand jury room “to raise your right hand and repeat after me…”

Enough is enough!!!

Larry Doyle

Sense on Cents Related Commentary


Sense on Cents/MF Global-Jon Corzine

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.


  • Joe B.

    Let’s go back and listen to Joe Biden’s take on Jon Corzine.

    “He’s the smartest guy I know in terms of finance and on the economy…”

    Can’t make this stuff up..!!

    • Bill

      Biden must be one of the dumbest pols in DC, which is saying a lot.

  • LD

    More grist for the mill.

    What did the boys over at the Fed know about what was happening at MF Global. Maybe we should put some of them on the stand as well. Fox reported a month ago Records Reveal Contact Between Corzine and the Fed in MF Global’s Final Days,

    “Over the course of the past year, we have seen opportunities in short-dated European sovereign credit markets,” Corzine said in the Oct. 25 statement, “and built a fully financed, laddered maturity portfolio that we actively manage. We remain confident that we have the resources and expertise to continue to successfully manage these exposures to what we believe will be a positive conclusion in December 2012.”

    Yet MF Global documents and telephone and email records obtained by Fox News show that on the morning of Oct. 26 — not even a full day after the optimistic statement he released — Corzine was contacting top officials at the Federal Reserve Bank of New York, including New York Fed President William C. Dudley. The records, supplied to congressional investigators by the New York Fed, show that over the next five days — at which point MF Global filed for bankruptcy protection — Corzine and Dudley spoke at least 10 times, and exchanged emails twice. There were still other contacts between Corzine, MF Global CFO Henri Steenkamp, and other New York Fed officials in the same time frame.

    Jack Gutt, a spokesman for Dudley, said the New York Fed had no comment. But sources with knowledge of the substance of these conversations told Fox News that Corzine already knew MF Global’s collapse was imminent, and had reached out to Dudley for two reasons: first, to see if the Fed could help find a buyer for MF Global; and second, to assist the Fed in its efforts to minimize the fallout from what both men now realized was shaping up as a Wall Street catastrophe, the eighth largest bankruptcy in American history.

  • TH

    It has been time for Grand Juries, for MF Global, Goldman Sachs, JP Morgan, AIG, Fannie and Freddie, etc, etc, the list could go on and on, but this would be a start.

    The problem is that they are either employed by the President, or are friends with the President. You need to seize their things, since the majority of their things, aren’t their’s to begin with.

    When does the CRONYISM end and the justice begin? People follow their leaders, if you want to know why there is so much corruption abound, the reasons why are founded in our very leaders’ own behavior.

    Unless you do this Obama, you are doomed to lose this upcoming election because you will have shown that you have no HONOR, and we are watching.

  • Hear, hear!

  • Randy

    No doubt many of the traders and investors who had their money stolen right out of their equity trading accounts are wishing that Congress were vaporized.

    If it gets any more corrupt what is next? They just make an emergency announcement one morning and take all the money out of all of our retirement accounts to “save the economy”?

    Where is all this going to end? I think it is all going to end quite badly for all of us if it is allowed to continue.

  • Bill

    Obama, Holder, Schapiro, Gensler and every other pol and apparatchik needs to recuse and get out of the way, and a special counsel be appointed and a grand jury constituted to devote its undivided attention to this case and Mr. Corzine.

  • Randy B


    Here is a link to a short article that explains how they also structured the MFGlobal Bankruptcy in an unusual way to in order to eliminate the priority that customer segregated accounts have over all other creditors in a broker bankruptcy. So it is apparent that not only did they openly steal investor/trader customer funds but then also conspired with key parties behind the scenes on an unusual bankruptcy structure to cheat the customers out of repatriation of the monies owed them from operating funds of the bankrupt debtor.

    MF Global Funds Were Not Vaporized—Stanley Haar Takes WSJ to Task,

  • Jim

    Chicago Tribune reports, MF Global Judge: No Chapter 7 Liquidation

    The judge overseeing MF Global Holdings Ltd.’s bankruptcy rejected requests by some former customers to convert the case to a Chapter 7 liquidation or conduct their own probe into the futures and commodities brokerage’s sudden collapse.

    U.S. Bankruptcy Judge Martin Glenn in Manhattan cited the potential cost to creditors and disruption of several federal investigations in setting aside the request by three commodity customers led by Sapere Wealth Management LLC.

    MF Global filed for protection from creditors on Oct. 31 amid a liquidity shortfall, as investors and trading clients worried about then-Chief Executive Jon Corzine’s $6.3 billion bet on European sovereign debt.

    Investigators are trying to track down a sum of missing customer money that has been estimated as high as $1.2 billion.

    Corzine, who had previously served as a governor and senator from New Jersey, testified before the U.S. Congress in December that he did not know where the missing money is.

    The three former customers, which claimed to have had $241 million in their commodity accounts, had sought to liquidate the parent under a bankruptcy law concerning commodities brokers. This could have allowed commodity customers such as themselves to be repaid first.

  • Ted

    Another WSJ story today about Corzine throwing her under the bus.

    The fix is in. She was probably told to hire Weingarten since he would protect the establishment/Corzine. A back office administrator in Chicago doesnt normally have those kinds of DC legal connections….

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