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MF Global: Independent Investigator Required…NOW

Posted by Larry Doyle on May 6, 2012 7:50 AM |

We’ve been robbed.

It is one thing to be robbed. It is a far different thing to have Uncle Sam NOT turn over every stone or reveal what they may have found in the process of investigating the robbery.

Strong charge, no doubt. Given the responses and messages I have received from people impacted by the MF Global debacle, those feelings of a lack of total support from Uncle Sam are all too real. With more than 6 months having passed from the “time of the robbery,” and with seemingly little reason to believe the case will soon be settled and customers made whole, what do we need? Where is Inspector Clouseau when we need him? That is, an independent investigator. 

Just such a call was made this week in Washington by Representative Michael Grimm (R-NY). In the spirit of full disclosure, I had inducted Representative Grimm into the Sense on Cents Hall of Shame a year ago for his efforts to gut meaningful whistleblower protections. With Grimm’s call for an independent investigator for the MF Global fiasco, I will gladly make him the first occupant of the Sense on Cents Palace of Purgatory.

Moving right along, Grimm’s call deserved greater attention but was at least highlighted by The Wall Street Journal midweek in its report, Independent Counsel for MF Global is Sought:

A Republican member of the House Financial Services Committee is pushing for the Justice Department to turn over its investigation of the MF Global Holdings Ltd. collapse to an independent counsel, according to people familiar with the matter.

Rep. Michael Grimm, a first-term House member from New York, circulated the letter Wednesday in an effort to get other legislators to sign on. He is working to get more signatures in coming days before turning over the letter to Attorney General Eric Holder, one of these people said.

The move comes about six months after the commodities brokerage firm tumbled into bankruptcy and the revelation that money was missing from customer accounts. The shortfall is estimated at about $1.6 billion.

Criminal and civil investigators have been looking into the case, but so far have said little about the progress of their investigation.

That has led some Republicans and customers of MF Global to question whether the investigation is being slowed by a desire to show deference to the firm’s former chief executive, Jon Corzine. Mr. Corzine, a former U.S. senator and governor of New Jersey, has been a prominent Democratic fund raiser and supporter of the Obama administration.

The letter circulated by Rep. Grimm’s office acknowledges that while “we have no direct evidence” that the Department of Justice “is providing special treatment…perception matters a great deal.” Still, the letter concludes that “an independent investigation is urgently needed.”

Perception? Keep your perception. The simple reality is more than 6 months have passed and countless numbers of our fellow citizens have had their lives and businesses derailed by the actions of those at MF Global.

I know I speak for so many of our citizens who feel they have been disenfranchised by the lack of real progress and meaningful results in the current MF Global investigation. I join with Representative Grimm in calling — no, rather DEMANDING — that an independent investigator take over this case.

Any suggestions as to who readers would like to see in that role?

Who might be our modern day Inspector Clouseau? Speaking of which and to add a touch of weekend levity where none exists, perhaps you may enjoy this 1 minute classic scene….

Inspector Clouseau: Does Your Dog Bite?

Larry Doyle 

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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 so that investor confidence and investor protection can be achieved.

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