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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.


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