Here's the story:
Things got worse for Jon Corzine and MF Global when it was discovered that over a billion dollars in client money was missing. There’s still roughly $1.6 billion in client funds that have yet to be recovered.
Loading ...Basically, management under the direction of Jon Corzine and employees of MF Global used customer money that should have been segregated for “the extraordinary liquidity drains elsewhere in their business, including margin calls on the European sovereign debt positions.”
Here is what the Trustee had to say:
"Under the personal direction of Corzine, MF Global began trading European sovereign debt securities. Those investments peaked at nearly $7 billion in October 2011, and the exposure was more than four-and-a-half times the firm’s total equity – a level of risk that was orders of magnitude greater than the relative exposure at other, larger institutions.The Trustee’s investigation shows that a risk analysis conducted by MF Global in September and October 2011 examined the likely sources of losses and demands for funding if the company suffered a significant financial disaster, including a downgrade, but seriously underestimated both the speed and extent of demands on liquidity. The total underestimating was between $600 million and $1 billion, which was the approximate amount of customer funds released from segregation and not returned during the final days of the firm’s operation.The investigation found that a customer “run on the bank” and unwinds of repo counterparty and proprietary positions, all within a three-day time period, overwhelmed MF Global, which one former MF Global executive called the “liquidity asphyxiation” of the company".
This reveals the flaw in the general strategy of privatizing profits and socializing risk that underlies the corporate model.
Although, that strategy can be beneficial, if, it is practiced in moderation; MF Global went beyond the reasonable limits of fiduciary responsibility, far enough to be criminal.
A lot of people on Wall Street and elsewhere should be hanged.
Hold on everyone. If he did something illegal yes but losing money by a bad investing is not illegal. Do I agree with him on his politics or ideology? No. This is the free world and the free markets. There will always be winners and losers. No one should be punished for making a bad investment. The investor beware! Should the government step in? Hell No. Stay out of the private sector and the free markets, government. People make their own choices. I have winning trades and losing trades. Am I going to sue or sick the SEC onto companies for my losing trades. The investors put thier money in and they knew the risk and if the investment firm screws up then they all lose. Too Bad! That is the real world in our free market. If you can't handle losing then then don't invest. Too many cry babies out there in the investment world.
Get the facts jp before you show your ignorance. The money was stolen from segregated customer accounts not fellow investors in his gambling scheme.
Here's a news flash, our 9 major US banks have derivative exposure of over $250 trillion, 3 times the size of the entire global economy. At times their trades are so big that when their ready to sell, the would be buyers smell blood and quit buying. Case in point JP Morgan last week with a $3+ billion loss with their own" London Whale" being the only fish in the pond.
So how do you fix all this Mr. B (Megamoney Magician) if these CMO, CDO mortgages go south like they all have and continue to do?
You need not look any further then Europe to see what's next.
Either jail or the stockade. Marching him out to a stockade in front of the NYSE each morning (including Sundays) for a year would serve justice and be a whole lot more effective than jail. Instead of isolating him he would still be able to see all of his friends; and they would certainly be able to see him.
How is this different than the ponzi scheme that the Federal Reserve is playing on us all using our sweat labor and paying us, the workers with there insider casino money? So, if we all do a bank run on all our money; and securities do not exist to have created enough money for us all to withdraw because of their money out of thin air and deficit spending (monitizing the debt); then all they have to do is print more money??? Is that not even more contriving than MF Global? Heck, all MF Global needed is a printing press to print more money for their customers and they would actually be more proficient than the way our Federal Government handles our Notes on the national level. Go MF Global!!! Go Federal Reserve!!! LMBO
Corzine is a felon but will probably go scott free because of his connections.
And you're right on re the Fed ! What would the results be for the poll on "Should Printing Press Ben Bernanke go to jail?"!
I ascribe Corszne's actions to a pervasive attitude in corporate America that anything goes as long as you can sidestep the law and regulations. Small brokerages do this too. Big banks do it. That is why I trade futures with a brokerage that marks to market each and every day. No chance for hankie pankie. But I still worry. A friend of mine using the same broker draws down her account every day to a set limit just to preserve the capital she has in the game. Why should we have to do that?
Corzine should be made an example of the resolve in this country to punish those who do this sort of thing. The dog has to have fangs to be a good watch dog. And a loud bark. Wake the neighbors, get the cops out. And go out for bigger fish if there are any. And don't waste time.
If this person was not a friend of Obama and Biden he would already be in Jail.......
How is this different than the ponzi scheme that the Federal Reserve is playing on us all using our sweat labor and paying us, the workers with there insider casino money? So, if we all do a bank run on all our money; and securities do not exist to have created enough money for us all to withdraw because of their money out of thin air and deficit spending (monitizing the debt); then all they have to do is print more money??? Is that not even more contriving than MF Global? Heck, all MF Global needed is a printing press to print more money for their customers and they would actually be more proficient than the way our Federal Government handles our Notes on the national level. Go MF Global!!! Go Federal Reserve!!! LMBO
Money of that magnatue does not dissapear.
It is stolen. Lets face it sombody cooked the books.
You would think someone would be in jail by now. But how is this different than the bankrupt states like California and Louisiana draining their retired and soon to be retired employee pension funds to the tune of over $160 billion. Look at JP Morgan speculating in derivatives they admit they don't even understand, total risk $71 billion, risk to asset, or rather your deposits ratio is 200:1. It was no different at MF Global.
There are a lot of roads to be renewed in the country, no ? Here you get cheap workers , isn't it???
How is it different? How about asking how it is similar? The only similarity is that crooks are administering the funds... However, a broke state and missing money at IMF are totally different...
Only if you think steeling from pension funds specifically protected by State and Federal Constitutions is legal......
By the way MF Global is one thing the IMF is another problem all together.
Corzine is a Bilderberg member,above the law. He probably won,t be touched. Wall street owns Washington. Best position for the retail guys is a form of financial karate,good people got screwed,bad guys get a big bonus.
Hopefully a full investigation will be done. Taking segregated customer funds for use by the brokerage or to pay obligations of the brokerage used to be called hypothecation. I believe it was a felony. Long ago and far away. Now do only the little guys go to jail?
Customer funds "went missing". Gold (and silver?) for customers who had taken delivery on their futures contracts were supposed to be safe in a repository--"missing". The commodity exchange was supposed to take the place of a counterparty to a futures transaction in the event of a failure of one party. Didn't happen. Customers couldn't close their trades. How would you like to be in a commodity trade with no way to exit. Not the stuff to build customer confidence.
The first lesson brokers and insurance agents are taught is not to co-mingle their/house money with client assets.. Jon Corzine is a savvy investment guru. He knew better than to allow this practice and would have been obligated to fire any underling who violated this basic principle. Corzine cannot play the ignorance card and should be held accountable though with his connections with the powerful it is doubtful he will suffer for his complicity.
Personal accountability is what is missing from business decisions that effect customers. This is a perfect example of this behavior hiding behind the corporate cloak. What he did is steal money from personal accounts and lost the money instead of replacing it before anyone noticed it was missing. In essence he forces his customers into risk that they were not aware of AND if the risk paid off, his customers would not receive the benefits. If the risk does not pay off, he has the US Government and taxpayers bail him out. What a Scam! Not only should he go to jail but he should have ALL his personal wealth siezed to pay back the loss.