Get the leg irons ready - Corzine (Obama Bundler) is going to jail for fraud.

[Soul Crusher]

Corzine: I didn’t tell my company to use customer dollars, and if I did, I didn’t mean it
Hotair ^ | 12/09/2011 | Ed Morrissey




I don’t know. Maybe he should have stuck with the Fifth Amendment:

CLICK ABOVE LINK FOR THE VIDEO

Jon S. Corzine, the former U.S. senator and governor who presided over the collapse of the commodities brokerage MF Global, told lawmakers Thursday that he never intended to authorize a transfer of customer funds to the firm’s accounts and that if he did “it was a misunderstanding.”

Under pointed questioning by members of the House Committee on Agriculture, the New Jersey Democrat would not rule out the possibility that someone at the firm misinterpreted him as suggesting that the struggling firm tap into investors’ funds.

In his prepared testimony submitted before the hearing, Corzine said he could not explain what happened to “many hundreds of millions of dollars” that the firm was holding for customers. He said he was “stunned” to learn shortly before the firm sought bankruptcy protection at the end of October that MF Global could not account for the money.

“I simply do not know where the money is, or why the accounts have not been reconciled to date,” Corzine said, according to the testimony.

The firm was required to keep clients’ money separated from its own. But more than $1.2 billion might be missing, the trustee overseeing the firm’s liquidation said last month. An attorney for the trustee confirms that assessment in testimony submitted for for hearing.

Well, what could Corzine have said that would have contributed to a potential “misunderstanding”? “Gee, guys, wouldn’t it be great if we had another billion or so dollars we could tap to back up our play on Euro debt”? Or maybe,”Do you think anyone would notice if a billion or so in customer assets went missing”? This is the kind of statement that a competent cross-examiner would seize in an effort to drill into Corzine’s testimony.

This gets to the heart of the puzzling easy ride that Corzine has received from the media thus far. Thanks to the public outrage over the Enron fraud (and MCI and others as well), Congress passed the clumsy and costly Sarbanes-Oxley regulations that presumes that CEOs know about all of the fiscal moves a company makes. Corzine’s statement that “Other questions, given my specific role in the company, will be questions for which I have no personal knowledge,” would be rejected entirely in any other context. So far, the media has treated Corzine as more of a victim of circumstance than a man who ran an enterprise that absconded with $1.2 billion of his customer’s assets.

Give the Washington Post credit for mentioning that Corzine is a Democrat and a fundraiser for Barack Obama, two points that often get neglected in other reports. However, they resist connecting the dots as much as possible. For instance, they report on Corzine’s assertion that his lobbying against tougher enforcement that would have caught MF Global’s fraud did not amount to “undue influence”:

In his prepared testimony, Corzine also recounted that he lobbied against regulators’ effort to tighten restrictions on how brokerages such as MF Global could invest clients’ money.

The proposed rules change was championed by Gary Gensler, chairman of the Commodity Futures Trading Commission and a fellow alum of Goldman Sachs. Corzine said he argued against the change in a July conference call with Gensler. Gensler has recused himself from the agency’s probe of MF Global.

At the hearing, Corzine told lawmakers that he “did not exert undue or improper influence on regulators.”

However, with the exception of a single reference to Corzine as a New Jersey Democrat, there isn’t anything preceding this in the article which puts Corzine’s influence in the administration in any context at all — and nothing appears for eleven more paragraphs:

He used the personal fortune he built at Goldman to fuel his ascent to the U.S. Senate, where he served on the Banking Committee. He later won the New Jersey governorship. In 2007, he was badly injured in a car crash.

He ran for reelection as governor of New Jersey in 2009 but was defeated by Republican Chris Christie. As Corzine receded from the public eye, Christie gained national prominence and recently considered jumping into the presidential race.

At MF Global, Corzine was returning to his Wall Street roots. The job could have served as a step toward a political comeback. As recently as last spring, he hosted a fundraiser for President Obama.

Er, yeah — and as recently as this summer, Obama made Corzine his liaison between Wall Street and his re-election campaign. That’s the context in which Corzine’s pushback against the regulators took place, a fact that Washington Post readers won’t know unless they read about it somewhere else.

It’s not quite “name that party,” but it’s close.

[Soul Crusher]

Corzine’s ‘clueless’ confession
By CHARLES GASPARINO
Last Updated: 9:50 AM, December 9, 2011




Jon Corzine says he has no idea of the whereabouts of up to $1.2 billion in customer money that disappeared amid the implosion of the firm that he ran, MF Global. His “Sgt. Schultz” defense yesterday before a congressional committee would be pretty funny — if it weren’t a major Wall Street CEO and Obama economic adviser who was playing the goof from “Hogan’s Heroes.”

In fact, Corzine was booted from Goldman Sachs in the late 1990s for precisely the same reasons his MF Global is now bankrupt — his inability to manage risk. When he left Wall Street, he became a US senator and governor from New Jersey — whose already dodgey finances only got worse on his watch.

After Jersey voters fired him, he went to MF Global and vowed to make it a money machine, not unlike Goldman. He made big bets on troubled European sovereign debt — the bets that sank the firm when they were disclosed to investors.

What’s really striking is that Corzine, in changing the firm’s business model, appears to have had absolutely no idea what he was doing. The firm’s “books and records” were a mess, according to people I know involved in the bankruptcy. Others close to the firm tell me it didn’t have the infrastructure to adapt to a new business model that transformed it into something closer to a hedge fund than its traditional business as a broker of commodities.

The fault begins and ends with the Corzine, whose job as CEO is to make sure the firm’s plumbing actually works, particularly in times of crisis.

Yet Corzine was clueless during MF Global’s crisis, at least according to his testimony yesterday.

Keep in mind, losing any customer money, not just the massive amounts that seem to have vanished here, is fairly unprecedented among major Wall Street firms. Bear Stearns and Lehman Bros. were far bigger outfits, yet not a single penny of investor cash went missing when they imploded amid the 2008 financial crisis.

By law, those funds must be kept separate from the firm’s own operations — and keeping them that way is among the most fundamental duties of any Wall Street firm and its management.

But here’s how Corzine described what he knows about MF Global’s now missing customer accounts: “I simply do not know where the money is, or why the accounts have not been reconciled to date. I do not know which accounts are unreconciled or whether the unreconciled accounts were or were not subject to the segregation rules.”

He stuck to that story during the Q&A. Or as Sgt. Schultz would say, he knows nothing.

Some will say this is just a smart ploy to deflect blame to others and save his own skin. Maybe so. Certainly, taking the Fifth would have been a disaster.

But, based on what I know about Corzine, I really think he didn’t have a clue — bad news that MF Global’s shareholders and employees have already received.

In fact, if you want to understand why this administration has been so inept at managing the US economy — from its failed stimulus package to its huge investment in the unproductive “green economy” — it’s because it listens to “smart” guys like Jon Corzine.

Vice President Joe Biden called Corzine “the smartest guy I know in terms of the economy.” President Obama, after accepting some $500,000 in bundled campaign contributions from Corzine, is said to have placed him on his short list to head Treasury.

The silver lining for America in Corzine’s public cluelessness is that Obama now can’t screw up the economy even more by giving him that job.

Charles Gasparino is a Fox Business Network senior correspondent.



Read more: http://www.nypost.com/p/news/opinion/opedcolumnists/corzine_clueless_confession_YldpOm0oriHc1gVHHoyreO#ixzz1g3Ja0HV0

[Soul Crusher]

JON'S SPIN MACHINE: How Corzine Dodged The MF Global 'Fraud' Question
Janet Tavakoli, Tavakoli Structured Finance | Dec. 9, 2011, 12:47 PM | 37 | A A A   


Here's What Happened At Jon Corzine's MF Global House Hearing Today


CORZINE IS ON CAPITOL HILL: Expect Him To Testify In Just A Few MomentsThese Are The Four Most Brutal Moments Of Jon Corzine's Testimony We Saw Today
 
It's as if Jon Corzine's PR machine is in top spin mode. You'll recall Jon Corzine is the former head of Goldman Sachs and former CEO of MF Global that appeared in front of Congress yesterday to answer questions about an estimated $600 million to $1.2 billion in missing money from the segregated accounts of customers of MF Global.

Yesterday and today, I heard confusion about whether or not MF Global's diverting customer funds was allowable and the possibility that customers will eventually get the money back.

Let me be clear. The diverting of customer funds from segregated accounts is not legal or allowable, and even if the money is later "found" it is fraud.

Jon Corzine was a bond trader in his past life and he says he doesn't know where the money is and that he didn't understand the details of the operations of MF Global, which appear to be a mess due to negligence or intent.

Corzine Knew or Should Have Known About an Alleged Federal Crime

Corzine may truthfully say he doesn't know exactly where the money is at the moment, but as head of MF Global and as the proponent of risky leveraged sovereign bond trades, he knew or should have known that MF Global didn't have enough cash (or collateral) to support those trades.

Instead of unwinding the trades, it appears that MF Global illegally wired money from customer accounts to satisfy margin calls on MF Global's trades. If that illegal activity happened, Corzine as a bond trader aware of risk and as the head of MF Global, knew it or should have known it. This should be the focus of Congress's investigation. Wire fraud is a Federal Crime

"Finding" Money Doesn't Excuse Fraud

Let me address the implication of the potential to "find" the money. The money may indeed be "found." If the bonds mature and pay off one hundred cents on the dollar, it may be possible to claw back money from MF Global's trading partners without much of a fight. Otherwise there may be a legal battle for money that as creditors of MF Global, they were never entitled to in the first place.

The rights of MF Global's customers are superior to the claims of these creditors. But eventually replacing the filched funds is not the same as restitution, since reputations and businesses have already been ruined. Damage has also been done to the trust in the global futures market and Futures Commission Merchants (FCMS).


Never Allowable to Filch Customers' Funds

The key issue is that it is never allowable to divert money from customers' segregated accounts. CFTC Commissioner Jill E. Sommers did a good job of stating that in her testimony yesterday. Moreover, if any trades mimicking Corzine's were done on behalf of the tiny minority of customer accounts that could engage in this trade, the trades would have to be segregated and credits or losses would show up in the relevant customers' accounts.

That still doesn't explain the missing funds in most customer accounts. Most customer accounts would not even be eligible for the "Corzine sovereign bond trade." Why is that? Here's an excerpt from Sommers' testimony: "Under Section 4d of the CEA, customer segregated funds may be invested in: general obligations of a sovereign nation (to the extent the FCM holds customer funds denominated in that sovereign nation's currency)." Most MF Global customers now missing money did not hold foreign currency accounts.

Pushing the idea that this trade was "allowable" for some customer is a distraction trick to avoid the question of whether MF Global impermissibly wired money from customers' accounts to satisfy margin calls for its own trades. Wire fraud is a Federal crime.

At Issue is Massive Fraud

The issue under investigation is what appears to be a bold and massive fraud, and Jon Corzine offered no alternative explanation, in fact it seems he cannot explain anything about the firm he ran to anyone's satisfaction.

Jon Corzine may not know where the money is right now, but as head of MF Global, he knew or should have known his trades needed collateral and that customers' money went missing to satisfy part of that need. If it is proved that fraud occurred--and money missing this long is a very suspicious sign--it's not plausible to me that Jon Corzine was unaware it was happening at MF Global.

It seems Jon Corzine would have Congress believe he's hopelessly incompetent, because it is better to have them believe that than the business for which he was responsible was breathtakingly wrong.

See also:

Corzine Testifies in MF Global Investigation, C-Span, December 8, 2011.

MF Global Revelations Keep Getting Worse - by Janet Tavakoli, Huffington Post - November 21, 2011

Read more posts on Tavakoli Structured Finance »

Please follow Clusterstock on Twitter and Facebook.



Read more: http://www.huffingtonpost.com/janet-tavakoli/jon-corzine-dodges-the-fr_b_1138625.html#ixzz1g3qQx6T4

[Soul Crusher]

Corzine's testimony is 'height of disbelief,' says Congressman
Legal News Line ^ | 12-9-11 | MIchael P. Tremoglie



Jon Corzine, the former CEO of the bankrupt brokerage firm MF Global, has testified before Congress about his role in the company losing nearly a billion dollars.

His responses were tentative, claiming ignorance of events. This prompted committee member, Rep. David Scott, D-Ga., to remark that it was the "height of disbelief" for Corzine ....


(Excerpt) Read more at legalnewsline.com ...

[andreisdaman]

Its really weird and creepy how you're even trying to link THIS to Obama...wow..you are desperate

[Soul Crusher]

Its really weird and creepy how you're even trying to link THIS to Obama...wow..you are desperate

LMFAO!!!! 

Andre - I know you are a 95%er and are a typical racist idiot who would happily enjoy a golden shower from obama, but fuck dude - can you humor me for once and look up a guy named Gary Gentsler and get back to me.   

[andreisdaman]

LMFAO!!!! 

Andre - I know you are a 95%er and are a typical racist idiot who would happily enjoy a golden shower from obama, but fuck dude - can you humor me for once and look up a guy named Gary Gentsler and get back to me.   

if I humor you, this thread will go to 25 pages.....I'm hoping it will die down once people see your idiocy

[Soul Crusher]

Mr. Corzine Goes to Washington, With No Pull: William D. Cohan
By William D. Cohan Dec 11, 2011 7:00 PM ET 0 Comments Q.



William D. Cohan is the author of the recently released "Money and Power: How Goldman Sachs Came to Rule the World" and the New York Times bestsellers "House of Cards" and "The Last Tycoons."

More about William Cohan
 .When it comes to shining a light on the cozy relationships between Wall Street and Washington, and how the rich and powerful get access to things the rest of us don’t, there can never be too many juicy examples.

Last month, thanks to Bloomberg Markets magazine, we were treated to the excellent story about how former Treasury Secretary Henry Paulson met with a bunch of bankers and hedge fund managers in New York during the summer of 2008 and shared with them some of his early thinking on the futures of the mortgage behemoths Fannie Mae and Freddie Mac.

Then, last week, Jon Corzine, the former chief executive officer of the defunct MF Global Inc. with a gold-plated resume -- he was also a senior partner of Goldman Sachs Group Inc. and a U.S. senator and governor of New Jersey -- testified before the House Agriculture Committee about his often-successful campaign to thwart the efforts of Washington regulators to enact rules that he and MF Global didn’t like.

The proposed rules that Corzine helped quash would have made the capital markets a safer place for everyone, to say nothing of MF Global’s customers -- who are still wondering what the firm did with $1.2 billion of their money. Bending regulators around Wall Street’s fingers, while not illegal, should make all Americans’ blood boil.

In late 2010, the Commodity Futures Trading Commission -- one of MF Global’s regulators -- proposed changing one of its regulations, known as rule 1.25, to limit the kinds of investments that firms like MF Global could make using their customers’ idle funds, including risky debt of sovereign nations. The rule change would also have prevented MF Global from engaging in so-called repo transactions -- short-term secured financings with institutional investors -- with other Wall Street firms.

Corzine, and other futures brokers, didn’t like the proposed rule changes because they would reduce potential profit. Investing customer money in high-yielding, risky securities such as Spain’s sovereign debt was more profitable than investing in safer U.S. Treasury securities.

Not only did MF Global’s general counsel, Laurie Ferber, write a letter to the CFTC opposing changes to rule 1.25, Corzine also took his case to the commissioners themselves.

On July 20, 2011, Corzine said, he “took part” in a conference call with CFTC Chairman Gary Gensler in which MF Global executives made clear their opposition to any changes in rule 1.25. On the call, Corzine said, he argued that the repo transactions with other broker-dealers should be permitted “because such transactions could be beneficial to” firms like MF Global.

Later that same afternoon, he and Ferber called a CFTC commissioner, Bart Chilton, and reiterated their view that rule 1.25 should be left alone. Corzine met with Gensler in May 2010 and again in December 2010. Gensler gave a guest lecture to Corzine’s class at Princeton University on Nov. 22, 2010. (Disclosure: At Corzine’s request, I spoke to his Princeton class a few weeks before Gensler.) Lo and behold, the CFTC decided not to change rule 1.25.

Until earlier this month, that is -- five weeks after MF Global filed for bankruptcy. The changes enacted to rule 1.25 -- largely barring investments of customer money in the sovereign debt of foreign nations -- is known as the “MF Global Rule.”

Thanks to last week’s hearings, we also know now that Corzine used his Washington connections to try to thwart regulators’ efforts to get MF Global to increase its capital after Corzine’s big bet on European sovereign debt became known. At the beginning of August 2011, Corzine said, he “became aware” that the Financial Industry Regulatory Authority, the securities industry’s self-regulating body, wanted MF Global to increase its capital because of Corzine’s sovereign-debt bet.

On Aug. 15, Corzine went to a meeting at the Securities and Exchange Commission in Washington, where he tried to get the SEC to make Finra back off the idea of forcing MF Global to raise more capital. “We met with Michael Macchiaroli, the associate director in the Division of Trading and Markets, and others from the SEC, and presented our argument that the capital treatment of [MF Global’s bet] involving European sovereign debt securities should not be changed in the way that Finra proposed,” Corzine testified.

But this time the lobbying didn’t work. Finra refused to change its position about MF Global’s need to raise new capital. Corzine, though, kept trying to get the SEC to thwart Finra. “I thereafter made a telephone call to Mr. Macchiaroli who told me, in substance, that there was no further appeal and that MF Global had to comply with Finra’s direction,” Corzine testified.

“He noted, however, that other companies in similar positions had sent letters of objection to the SEC, although he was clear that such a letter would make no difference to Finra’s or the SEC’s position,” Corzine said.

Despite this setback, no one was questioning Corzine’s pull in Washington. In April 2011, he held a fundraiser for President Barack Obama at his Manhattan apartment and he is one of Obama’s biggest bundlers, having cobbled together more than $500,000 from his Wall Street friends.

Such was Corzine’s standing in the capital that when rumors surfaced last summer that Treasury Secretary Timothy Geithner might resign and return to New York to be with his family, Corzine’s name was at or close to the top of the list as a possible replacement. Indeed, as hard as it is to believe now, on Aug. 2, when MF Global issued publicly $325 million in five- year senior notes, it had to promise investors that the interest rate paid on their bonds would be increased by 100 basis points should Corzine leave the firm and take a job with the administration.

You can’t make this stuff up.

(William D. Cohan, a former investment banker and the author of “Money and Power: How Goldman Sachs Came to Rule the World,” is a Bloomberg View columnist. The opinions expressed are his own.)

To contact the writer of this article: William D. Cohan at wdcohan@yahoo.com.

To contact the editor responsible for this article: Tobin Harshaw at tharshaw@bloomberg.net.

[Soul Crusher]

http://www.businessinsider.com/jon-corzine-cowardly-2011-12



Obama - Corzine - Gentsler   - Axis of Corruption 

[Soul Crusher]

The Collapse Of MF Global Basically Started On Corzine's Day 1
TBI ^ | 12-12-2011 | Ben Walsh


The Collapse Of MF Global Basically Started On Corzine's Day 1

Ben Walsh
Dec. 12, 2011, 8:36 AM



Image: AP


MF Global Client's Counsel Blasts Jon Corzine Calling His Prepared Testimony 'Cowardly' And A 'Cop-Out' Five Reasons Why Wall Street Enjoyed Today's Corzine HearingMF Global's Bankruptcy Trustee Finally Pinpointed The Shady Trades In Customer Accounts

When Jon Corzine, on a visit to MF Global's Chicago office shortly after becoming CEO in 2010, Dealbook reported that he discovered that a young trader was successfully using a small account to trade the firm's capital, he was enthralled.

With widening eyes, Corzine suspended his meet and greet tour to talk to disect the broker trades for an hour.

This anecdote is yet another in a string details that paint Corzine as more focused on the minutiae of individual trading tactics than on his broader responsibilities as Chief Executive. It is not uncommon for financial executives to review trading strategies and potential market opportunities with other senior executives, but Corzine's behavior while visiting the Chicago office was far from the norm. And such behavior continued:

Mr. Corzine compulsively traded for the firm on his BlackBerry during meetings, sometimes dashing out to check on the markets. And unusually for a chief executive, he became a core member of the group that traded using the firm’s money. His profits and losses appeared on a separate line in documents with his initials: JSC.

As the firm's position's in European sovereign debt increased, the board became concerned and Corzine responded by making it clear that he intended to proceed with the trade or leave MF Global:

“If you want a smaller or different position, maybe you don’t have the right guy here,” he told them, according to a person familiar with the matter.

(snip)


(Excerpt) Read more at businessinsider.com ...

[Soul Crusher]

MF's Corzine said to know of customer fund misuse (Obama's friend and fundraiser lied to Congress)
reuters ^ | 12/13/2011 | Alexandra Alper and Aruna Viswanatha
Posted on December 13, 2011 11:11:38 PM EST by tobyhill

The regulatory arm of CME Group has turned over interviews to the Justice Department that allege former MF Global chief Jon Corzine knew that the now-bankrupt brokerage firm used customer money to lend to a European affiliate, a CME executive said on Tuesday.

The information is fourth-hand but is the strongest statement yet from a regulator that Corzine may have personally known customer funds were diverted for firm use.

Federal investigators are probing why hundreds of millions of dollars in customer funds are missing, and whether the futures brokerage raided customer money to try to counter a liquidity crisis, a major violation of industry rules.

Corzine, who resigned as chief executive of MF Global early last month, has given sworn testimony that he does not know where the money is, but it is unclear if this latest revelation will legally harm him.

(Excerpt) Read more at reuters.com ...

[Soul Crusher]

Jon Corzine Said To Have Known About Misuse Of MF Global Customer Funds
 
First Posted: 12/14/11 08:25 AM ET Updated: 12/14/11 08:25 AM ET




(Alexandra Alper and Aruna Viswanatha) - The regulatory arm of CME Group has turned over interviews to the Justice Department that allege former MF Global chief Jon Corzine knew that the now-bankrupt brokerage firm used customer money to lend to a European affiliate, a CME executive said on Tuesday.

The information is fourth-hand but is the strongest statement yet from a regulator that Corzine may have personally known customer funds were diverted for firm use.

Federal investigators are probing why hundreds of millions of dollars in customer funds are missing, and whether the futures brokerage raided customer money to try to counter a liquidity crisis, a major violation of industry rules.

Corzine, who resigned as chief executive of MF Global early last month, has given sworn testimony that he does not know where the money is, but it is unclear if this latest revelation will legally harm him.

CME Executive Chairman Terrence Duffy, testifying to the Senate Agriculture Committee, on Tuesday said a CME auditor participated in a phone call during which an MF Global employee indicated that Corzine knew of the loan.

During an internal CME interview, the auditor also revealed that the loan was for roughly $175 million to a European affiliate of MF Global and was likely made in the last couple of days prior to the firm's October 31 bankruptcy, Duffy said.


The CME is a front-line regulator for MF Global.

"A CME auditor ... participated in a phone call with senior MF Global employees wherein one employee indicated that Mr. Corzine knew about the loans that had been made from the customer segregated accounts," Duffy said.

A spokesman for Corzine and his lawyer, Andrew Levander, declined comment.

Duffy said his company has provided this information to the Justice Department and the Commodity Futures Trading Commission, which are investigating the matter.

The Senate Agriculture Committee's hearing on Tuesday was the second to feature both Duffy and Corzine, among others, as lawmakers seek answers about the missing funds.

Corzine told lawmakers: "I simply do not know where the money is, or why the accounts have not been reconciled to date."

Barry Pollack, a criminal defense attorney at Miller & Chevalier, said it is uncertain if the CME auditor's claims could hurt Corzine.

But he said that by testifying, Corzine knowingly opened himself up to the potential for charges beyond his conduct while MF Global CEO - from perjury to obstruction of justice.

"It absolutely could be nothing more than a classic game of telephone," Pollack said. He also noted, "Mr. Corzine is sophisticated enough that he knew going into this that if he gave testimony, he was going to open the flood gates."

'WHERE'S THE MONEY?'

Corzine appeared during a panel that preceded Duffy's testimony, dressed in a somber dark suit and closely watched by his attorney seated behind him.

He used his opening statement to try to correct comments he gave the prior week before the House Agriculture Committee.

At that hearing, Corzine said that while he "never intended" to break rules, an employee may have misinterpreted instructions to try to save the firm, a comment he sought to clarify on Tuesday.

On Tuesday, Corzine said: "I want to be clear, I never gave any instructions to misuse customer funds, I never intended anyone at MF Global to misuse customer funds."

Also testifying to the Senate panel on Tuesday were two top-ranking Mf Global executives - Chief Operating Officer Bradley Abelow and Chief Financial Officer Henri Steenkamp - who said they, too, lacked answers about the money.

Senators became agitated about the testimony, frequently asking the executives and Corzine "Where's the money?" and "What happened?"

Senator Pat Roberts, the top Republican on the committee, raised his voice, asking, "How many heads do we have to have around here before we finally drill down and find somebody's name that knows what the heck is going on?"

CME's Duffy provided the most answers.

He not only revealed the allegations about Corzine's knowledge about customer-backed loans, but also stated that $950 million dollars was moved out of the customer segregated accounts to MF Global's broker dealer.

Typhon Capital Management CEO James Koutoulas, who is helping MF Global customers recover their funds, was at the hearing on Tuesday and said Duffy's testimony was a breath of fresh air after the panel with Corzine and the executives.

"We'd listened to the three stooges say they knew nothing and it wasn't their responsibility and then somebody like Duffy came in. The reaction was great. He dropped a total bombshell," he said.

'BREAK THE GLASS'

Senator Roberts also pressed the executives and Corzine about an internal report, asking whether it was "an actual plan that would break the glass and tap into your customers' segregated accounts, perhaps described as a loan."

Corzine admitted there was such a "break the glass" report, but he said it did not involve raiding customer money.

"To my knowledge and understanding of that report it was not ever the intent to recommend tapping into segregated customer funds."

According to a copy of the document obtained by Reuters, the contingency plan did not contain explicit recommendations to tap customer funds.

It did, however, lay out emergency methods for drawing down lines of credit and for exiting complex investments.

The document, which was undated but appeared to be drafted before October 20, estimated that under tested scenarios, "there is sufficient liquidity to manage through one month under a severe stress event."

'CALLED STEALING BACK ON MAIN STREET'

Farmers who became collateral damage from the collapse of MF Global got a chance to air their frustrations, telling lawmakers that their confidence in the markets has been shaken.

Dean Tofteland, a corn and soybean farmer from Minnesota, said when he heard news that MF Global was having problems, he talked to his broker, who told him, "No customer has ever lost a penny in customer segregated accounts."

But three days later his $253,000 account was frozen and he could not adjust his short positions.

Tofteland's positions were transferred to a new broker with only 15 percent of the required collateral, and he was forced to liquidate the hedges, he said. Since then, prices dropped and he lost another $100,000 without having the hedge.

Tofteland said he has not returned to the futures market.

"What they call 'unlawful comingling' on Wall Street is called 'stealing' back on Main Street," he told lawmakers.

(Reporting by Alexandra Alper, Aruna Viswanatha, Christopher Doering and Lily Kuo, with additional reporting by Josephine Mason in New York; Writing by Karey Wutkowski; Editing by Tim Dobbyn, Gary Hill)

Copyright 2011 Thomson Reuters. Click for Restrictions.

[Soul Crusher]

[Soul Crusher]

Check out the lead attorney for MF Global and his connections
New World Capital ^ | 12/14/11 | Bradley Abelow



Bradley Abelow, President, MF Global Inc., is a Senior Advisor at the Firm. Mr. Abelow was a Partner at NewWorld before joining MF Global, where his long-time associate Jon Corzine is CEO. Prior to co-founding NewWorld, he was Chief of Staff to Jon Corzine, then Governor of the State of New Jersey, where he oversaw state-level environmental programs, and earlier served as Treasurer of New Jersey.

Before that, Mr. Abelow was a General Partner and Managing Director of The Goldman Sachs Group, where he held a variety of senior leadership positions. Mr. Abelow has been active in environmental matters for many years. In 2005, he led the effort to create an Environmental Policy Framework for Goldman Sachs, which resulted in a dedicated effort on the part of Goldman to invest in environmental opportunities and also led to the creation of the Goldman Sachs Center for Environmental Markets.

Mr. Abelow serves as Chairman of the U.S. Environmental Protection Agency's Environmental Finance Advisory Board.

Mr. Abelow graduated from Northwestern University with a BA in Political Science and holds an MA in Public and Private Management from the Yale School of Management.


(Excerpt) Read more at newworldcapital.net ...


--------------------------------------------------------------------------------

[Soul Crusher]

Exclusive: Regulators know where MF Global funds went (George Soros sweating bullets?)
Reuters ^ | 12/14/11 | Christopher Doering
Posted on December 14, 2011 8:47:41 PM EST by jimbo123

Regulators now have a more complete picture of money transfers in the final days of bankrupt brokerage MF Global, but must sort out which transactions were legitimate before more money can be released to customers, a top official told Reuters on Wednesday.

Jill Sommers, who is heading the Commodity Futures Trading Commission's review of MF Global, said regulators "are far enough along the trail" that they know where the money went.

"Now it's just finding out which ones of those transactions are legitimate and which ones of them are illegitimate," Sommers said.

(Excerpt) Read more at reuters.com ...

[Soul Crusher]

[Soul Crusher]

Cash & burn
By JOSH MARGOLIN
Last Updated: 8:25 AM, December 16, 2011




The Democratic senator who savaged Jon Corzine at a high-profile Capitol Hill hearing this week had another reason to go hard on her former colleague — she recently pressed him for campaign contributions but didn’t get any.

“She would literally call once every two or three weeks,” one Corzine intimate said of Sen. Debbie Stabenow (DMich.).

“She called all the time.”

Stabenow, chair of the Senate Agriculture Committee, had blasted the former senator and New Jersey governor Tuesday for his failure to explain what happened to $1.2 billion in missing customer money from his bankrupt firm, MF Global.

“This isn’t the Dark Ages,” she lectured. “MF Global didn’t keep their books with feather quills and dusty ledgers.”

Sources in Corzine’s inner circle said they were “stunned” and “amazed” by Stabenow’s attack.

The two had served together in the Senate, but Corzine hasn’t delivered with contributions in some time.

So far this year, Corzine’s name has not appeared on Stabenow’s campaign finance reports.

Records show he last donated to her in 2006, contributing $2,000. Corzine and his then-wife, Joanne, each gave Stabenow $1,000 in 1999.

Stabenow defended her criticism.

“Senator Stabenow’s committee is holding hearings and subpoeaned Mr. Corzine in order to get at the truth and hold wrongdoers at MF Global accountable. It doesn’t mater who the CEO of MF Global is,” said spokesman Cullen Schwarz.

Corzine weathered his third Capitol Hill grilling yesterday, denying to a House committee that he was told that MF improperly transferred $175 million in customer money out of the firm just before it went bust in October.

josh.margolin@nypost.com



Read more: http://www.nypost.com/p/news/national/cash_burn_SltMlpSnU1sS17SC3q8l0H#ixzz1gj1E0Jkd

[Soul Crusher]

Liquidation Of Customer Stored Gold And Silver Bullion From MF Global
TMO ^ | 12-17-2011 | Jesse
Posted on December 17, 2011 11:38:03 PM EST by blam

Liquidation Of Customer Stored Gold And Silver Bullion From MF Global

Commodities / Gold and Silver 2011
Dec 17, 2011 - 12:27 PM
By: Jesse

The bottom line is that apparently some warehouses and bullion dealers are not a safe place to store your gold and silver, even if you hold a specific warehouse receipt. In an oligarchy, private ownership is merely a concept, subject to interpretation and confiscation.

Although the details and the individual perpetrators are yet to be disclosed, what is now painfully clear is that the CFTC and CME regulated futures system is defaulting on its obligations. This did not even happen in the big failures like Lehman and Bear Sterns in which the customer accounts were kept whole and transferred before the liquidation process.

Obviously holding unallocated gold and silver in a fractional reserve scheme is subject to much more counterparty risk than many might have previously admitted. If a major bullion bank were to declare bankruptcy or a major exchange a default, how would it affect you? Do you think your property claims would be protected based on what you have seen this year?

You always have counter-party risk if you hold gold and silver through another party, even if they are a Primary Dealer of the Federal Reserve. As Ben said, the Fed offers no seal of approval.

If a Bankruptcy Trustee can pool your bullion into the rest of the paper assets and then liquidate it at prices that are being front run by the Street, you will have to accept whatever paper settlement that they give you.

The customer money and bullion assets are not lost, or rehypothecated or anything else. This is a pseudo-legal fig leaf, a convenient rationalization.

The customer assets were stolen, and given to at least one major financial institution by MF Global to satisfy an 11th hour margin call in the week of their bankruptcy, even as MF Global was paying bonuses to its London employees. And now that powerful financial institution does not want to give the customer money back. And they are so powerful that the Trustee and the Court is reluctant to try and claw it back. And so in the great Wall Street tradition they are trying to force the customers and the public to take the loss. The regulators and the exchange are aghast, and are trying to imagine how to resolve and spin this to preserve investor confidence and prevent a run on the system.

'Let them eat warehouse receipts.'

For many this would have been unthinkable only a few months ago. They had been cautioned and warned repeatedly, but chose to trust the financial system. And now they are suffering loss and anxiety, frozen assets, and the misappropriation of their wealth.

How more plainly can it be said? The US financial system as it now stands cannot be trusted to observe even the most basic property rights as it continues to unravel from a long standing culture of fraud.

Get your money as far away from Wall Street as is possible. And if you want to own gold and silver, take delivery and store it in a secure private facility outside the fractional reserve system.

Barrons
The Silver Rush at MF Global
By ERIN E. ARVEDLUND
December 17, 2011

It's one thing for $1.2 billion to vanish into thin air through a series of complex trades, the well-publicized phenomenon at bankrupt MF Global. It's something else for a bar of silver stashed in a vault to instantly shrink in size by more than 25%.

That, in essence, is what's happening to investors whose bars of silver and gold were held through accounts with MF Global.

The trustee overseeing the liquidation of the failed brokerage has proposed dumping all remaining customer assets—gold, silver, cash, options, futures and commodities—into a single pool that would pay customers only 72% of the value of their holdings. In other words, while traders already may have paid the full price for delivery of specific bars of gold or silver—and hold "warehouse receipts" to prove it—they'll have to forfeit 28% of the value.

That has investors fuming. "Warehouse receipts, like gold bars, are our property, 100%," contends John Roe, a partner in BTR Trading, a Chicago futures-trading firm. He personally lost several hundred thousand dollars in investments via MF Global; his clients lost even more. "We are a unique class, and instead, the trustee is doing a radical redistribution of property," he says.

Roe and others point out that, unlike other MF Global customers, who held paper assets, those with warehouse receipts have claims on assets that still exist and can be readily identified.

The tussle has been obscured by former CEO Jon Corzine's appearances on Capitol Hill. But it's a burning issue for the Commodity Customer Coalition, a group that says it represents some 8,000 investors—many of them hedge funds—with exposure to MF Global. "I've issued a declaration of war," says James Koutoulas, lead attorney for the group, and CEO of Typhon Capital Management.

At stake is an unspecified, but apparently large, volume of gold and silver bars slated for delivery to traders through accounts at MF Global, which filed for bankruptcy on Oct. 31. Adding insult to the injury: Of the 28% haircut, attorney and liquidation trustee James Giddens has frozen all asset classes, meaning that traders have sat helplessly as silver prices have dropped 31% since late August, and gold has fallen 16%. To boot, the traders are still being assessed fees for storage of the commodities...

[Soul Crusher]

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Obama to return Corzine cash
Politico ^ | 12/23/11 | MAGGIE HABERMAN
Posted on December 23, 2011 7:06:04 PM EST by ColdOne

President Barack Obama and the DNC plan to return $71,600 donated by disgraced former MF Global head Jon Corzine and his wife, a source confirmed to POLITICO.

The money was split between the DNC Victory Fund and the reelection effort.

But Corzine was not just a donor but also a bundler, including from other MF Global employees.

The source said the other donations from employees will be looked at case by case and, if the facts warrant it, returned.

The news came late on the Friday before Christmas, generall

(Excerpt) Read more at politico.com ...

[Soul Crusher]

Farmers Sue (Democrat) Jon Corzine Over Missing Millions (Obama supporter and campaign financier)
abc ^ | 1/9/2012 | CINDY GALLI
Posted on January 10, 2012 7:26:11 AM EST by tobyhill

Montana farmers have filed a class action suit against former New Jersey governor Jon Corzine, charging that the failed financial firm run by Corzine stole millions from their accounts to pay off its spiraling debts, and that Corzine's "single-minded obsession" with making MF Global a big player on Wall Street led to the firm's collapse.

MF Global's clients included 38,000 wheat farmers, cattle ranchers and others who "hedged" their crop prices by placing millions in MF Global accounts. Those accounts were supposed to be "segregated and secure," according to the federal suit, meaning MF Global could not draw on those funds.

The lawsuit, filed on behalf of all 38,000 customers, alleges that when MF Global made a series of bad investments -- notably in European debt -- it began "siphoning funds withdrawn from segregated client accounts" to cover its debts.

(Excerpt) Read more at abcnews.go.com ...

[Soul Crusher]

How JP Morgan And George Soros Ended Up With MF Global Customer Money
January 8, 2012
 
http://www.clearingandsettlement.com/2012/01/how-jp-morgan-and-george-soros-ended-up-with-mf-global-customer-money



In recent testimony before a Congressional committee, MF Global’s former chief Jon Corzine as well as other MF Global executives said repeatedly the didn’t know where the failed brokerage firm’s $1.2 billion of missing client money was. In fact, MF Global executives knew exactly what happened to the money, as do the regulators who oversaw the firm’s bankruptcy. The so-called segregated customer funds were repeatedly, and legally (through re-hypothication), used as collateral for MF Global loans for 100:1 leveraged bets on European sovereign debt.   

Rehypothication is the 800lb gorilla (Editor’s note: make that the 2,000 lb gorilla). In 2007 I was with another fund that was the first 2.5bln casualty of the l

A substantial portion of MF Global’s commodity clients cleared their transactions through the Chicago Mercantile Exchange and Comex, owned by CME Group (ticker: CME). The question now looming over CME’s stock is whether the company will be liable for customer losses, as the Commodity Customer Coalition, a group that says it represents some 8,000 investors—including many hedge funds–with exposure to MF Global are not going down without a fight.

Rather than being treated as a bankruptcy of a commodities brokerage firm under sub-chapter IV of the Chapter 7 bankruptcy law, MF Global was treated as an equities firm (sub-chapter III) for the purposes of its bankruptcy, and this is why the MF Global customer money in so-called segregated accounts “disappeared”. In a brokerage firm bankruptcy, the customers get their money first, while in an equities firm bankruptcy, the customers are at the end of the line, meaning MF Global’s creditors, namely J.P. Morgan and other trading counterparties, got their money first, just as AIG’s CDS (credit default swap) counterparties (mainly Goldman Sachs) got their money first when the U.S. government bailed out AIG.

To add further insult to injury for MF Global clients, the firm reportedly unloaded hundreds of millions of dollars’ worth of securities to Goldman Sachs, and others, who then reportedly flipped these securities within a day to George Soros funds.

What the debacle implies is that nothing has really been learned from the 2008 financial crisis, and that there really is no safety in any paper investment when push comes to shove. Brokers and investment banks are effectively running leveraged ponzi schemes running in the trillions of USD with your collateral then refuse to offer you liquidity on the collapse of the trade because they won’t face a brokerage This has very wealthy individuals as well as non-too-big-to-fail market participants seriously reconsidering the risks of regulatory malfeasance during such systemic “black swan” events. In such cases, be prepared for commodities and equity brokers, investment and commercial banks to “freeze” your funds, enforced by central banks or other regulatory authorities–i.e., a de facto banking holiday, while not only will your purchasing power be reduced by currency devaluations, but you will also be asked to again bail out the banksters with your tax money.

[Soul Crusher]

http://www.cnbc.com/id/45973377


Unreal.    Hope and change!

[Soul Crusher]

Former MF Global Chief Risk Officer Sacked For Doing His Job, Disagreeing With Corzine
Submitted by Tyler Durden on 02/02/2012 13:43 -0500



Capital Markets Congressional Budget Office Goldman Sachs goldman sachs MF Global Reuters Sovereign Debt Testimony


Yesterday we noted how a CBO analyst may have been terminated for her conflicting views on model assumptions, especially when they veered away from the Wall Street-defined norm. Today, we find that the same approach to dissent may have been the reason why MF Global ended up taking inordinate risk, and ultimately blowing up, leaving over a billion in client money transitioning from liquid to gas phase overnight. According to Reuters, "The former chief risk officer at MF Global who raised red flags about the firm's aggressive trading bets told lawmakers that his warnings contributed to the firm's decision to let him go in early 2011. Michael Roseman, who was ousted in January 2011 from the now-bankrupt futures brokerage, said he rang alarm bells about the firm's exposure to European sovereign debt a year before the firm collapsed in late October of 2011." Roseman's statement on whether his skepticism to Corzine's get rich quick scheme was the reason for his termination? ""My views on risk certainly played a factor in that decision," Roseman told a House Financial Services subcommittee, about why he was asked to leave the firm." And so the status quo continues: any time anyone ever dares to disagree with broad misconceptions, whether it is regarding infinitely rising home prices, broad global compression trades, or the ability of European banks to onboard toxic CDOs in perpetuity is always promptly shown the door. The flipside to this complete lack of checks and balances? Why the bailout culture of course, in which finding one company responsible for gross complacency would mean all are guilty. Which is nobody will ever go to prison as it would set the "worst" possible precedent ever: that one is ultimately responsible for their own stupidity. Said otherwise: the best qualification one can hope to add to one's resume: "distinguished yes man with honors."

More from Reuters:

Before MF Global's collapse, then Chief Executive Jon Corzine pushed the firm to take on a more aggressive trading strategy, including a $6.3 billion dollar bet on European debt, executed through repo-to-maturity transactions.

 

Corzine, once CEO at Goldman Sachs (GS.N) and a former New Jersey governor and U.S. senator, also was pushing the futures brokerage to evolve into something closer to an investment bank.

 

Roseman said such a strategy required a lot of capital and a lot of liquidity, two things that ran out at the firm.

 

"I do think the strategy maybe exceeded the ability of the resources," he said.

At this point Roseman's replacement chimed in as well:

Lawmakers pressed Stockman if he was brought in as a "yes" man, after Roseman got ousted following his warnings to Corzine and the board.

 

"Did you ever think that maybe they ran off Mr. Roseman and brought you in to be kind of the guy that doesn't see, tell, know? Did that ever occur to you?" Republican Steven Pearce asked Stockman.

 

Stockman replied, "No sir."

 

Pearce also laid into Stockman about his testimony that he was "deeply saddened" by MF Global's collapse and its impact on shareholders and customers.

 

"Have you suggested that maybe you ought to give your pay back and put it into a scholarship fund for these kids that aren't going to go to college? Sitting out there, some hog farmer who is trying to make ends meet. My dad raised pigs. I know what it's like. He's trying to pay for the next sack of feed," Pearce said.

 

Stockman was reluctant to speculate on what specifically doomed MF Global.

 

Roseman, however, said MF Global would have been on a very different path if it had not ramped up its European debt exposure.

 

"In my opinion, they would still be here," Roseman said.

True. However, this would not allow "vaporize" to be in the running for most popular word to describe virtually every aspect of modern capital markets. And that trade off is surely not worth it.

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www.zerohedge.com

[Soul Crusher]

Corzine Corzined - Congressional Panel Finds Former MF Global CEO Ordered JPM Fund Transfer
The Zero Hedge/ ^ | 03/23/2012 | Tyler Durden

Posted on Friday, March 23, 2012 4:31:40 PM by SatinDoll

Then only thing that could top today's epic market insanity and hilarity, would be that Corzine is himself about to be Corzined. And just released from Bloomberg:

•MF GLOBAL'S CORZINE ORDERED FUNDS MOVED TO JPMORGAN, MEMO SAYS •CORZINE'S `DIRECT INSTRUCTIONS' CITED BY CONGRESSIONAL PANEL •MF GLOBAL TRANSFER WAS USED TO COVER OVERDRAFT, PANEL SAYS •MF GLOBAL FINDINGS CITED IN MEMO OBTAINED BY BLOOMBERG NEWS

And so we can now add perjury to felony embezzlement. Which means we now have to wait to find just which MF'er (and JPM'er) will be given a promise of untold millions if they only get Fab Tourred for a few years, and spend 5-7 in minimum security state prison instead of brave Jonny.


(Excerpt) Read more at zerohedge.com ...

[Soul Crusher]

http://www.politico.com/news/stories/0312/74419.html


Bbboooooommmmmmmmmm