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Shannon Stapleton / Reuters
The sign marking the MF Global Holdings Ltd. offices at 52nd Street in midtown Manhattan is seen in New York.
"(I)t's either nefarious or illegal ..."
Those are the words of Bart Chilton, an official with the U.S. Commodity Futures Trading Commission (CFTC). He was referring to the approximately $600 million of clients' money missing from now-bankrupt broker MF Global, which was run by former New Jersey Governor Jon Corzine.
The CFTC is one of a number of agencies, including the FBI, investigating whether MF Global used clients' money to cover itself amid bad bets on European debt. MF Global, which has been around for more than 200 years, filed for bankruptcy on Oct. 31.
"I can’t comment on the investigation, but it looks suspicious as heck to me,” Chilton, a Democratic commissioner with the CFTC, told CNBC when asked about the missing money.
“It’s either nefarious or illegal, in my personal opinion,” he added. "The money should be there. It's not."
Neither MF Global nor Corzine, a former Goldman Sachs CEO, has been charged with any wrongdoing. MF Global, which laid off its entire staff on Nov. 11, was not available to comment.
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Leave a Comment:
I'll bet covering losses with client deposits is common on Wall Street. It just doesn't come to light unless the company is thoroughly investigated.
It did come to light but it didn't make any difference. The government just forced the taxpayers to cover the theft.
Since democrat Corzine was running it, would you expect anything less?
When will federal regulators (SEC and CFTC) get serious about holding officers and directors of Wall Street firms accountable for corporate oversight?
Recent reports (The Conference Board, Lehman Brothers' examiner, etc.) suggest that a failure of corporate oversight was a leading contributor to the financial crisis, yet nothing has changed in the three years since the crisis. It's business as usual on Wall Street.
It is silly to complain about wall street. It was this company that did this...not wall street. These companies are supposed to be audited every year and any discrepancies are supposed to go to the attention of the SEC. When this sort of thing comes about, someone is at fault. Either the company supplied faulty information to the auditors....or the auditors decided not to live up to their responsibility and that they had knowledge of the sitation. If either of those things happened then someone knowingly broke the law and should go to jail....If the auditors noted the discrepancies and passed that info on to the SEC.....Then someone at the SEC also broke the law for not pursueing it. All of the above happened with Madoff...and the SEC often escapes the noose for some odd reason, like the government doesnt want to bother or rock the boat....The laws and the rules are there, but the regulators need to do their job....If there was knowledge and pressure from a politician, this should be made public and that politician should face trial...That is how regulation is supposed to work, but the regulators seem to more and more be looking the other way, expecially if there is political pressure to do so....
"The problem is too much government regulation of the security's market" Rick Perry 2012
The regulator states:
Nefarious activities were going on at Global MF !
So my question to the regulator is : Where were you while all this was happening ?
You Mr Regulator, should be the 1067th employee fired for incompetence!
J.A. lotsanumbers:
You have bought into a very common misconception. Auditors DO NOT look for financial irregularities. They look to see that accounting practices have been followed correctly.
If the books are cooked and the cookers know what they are doing, everything is going to look just fine. Thus, the firm is going to get a clean bill of health from the auditors.
What is needed is clear oversight and serious investigation. That unfortunately must be done by stockholders, boards of directors, honest CEO's and CFO's, etc.
The other solution is to write very tight laws that specify what is criminal and what is not. The problem with that is evident in derivative abuse. There are laws already on the books that say what is illegal. The problem is the laws don't say what is legal. A slight tinkering or variation and a financial instrument that was once illegal is now just peachy keen. That is where the creative lawbreaker makes his money.
UDunnoBro: The losses are covered by the SIPC not the government. Dodd/Frank had a proposal for insurance against "too big to fail" by creating a similar insurance fund for the largest banks but the lobbyists got the republican congress to kill it. They prefer government bailouts.
@David Walker
Compentent auditors should and do look at internal regulatory controls but they're not the only ones responsible. I work at at a financial firm (not Wall Street) and we're subject to multiple audits, both internal and external, as well as examinations from FINRA, OCC, SEC, SCC, etc. on a yearly basis.
No we don't need more rules. We just need the ones that are in place to be enforced.
DMAC....100% agreed....It is just amazing how so many jump to blaming the republicans when all the players are dems. Some people hid some funny bookkeeping in this case and they need to get to the bottom of it and all the other thousands of situations that happen continuously.
Why is it that so many people who have "questionable" business dealings or rising stars in this Presidential Administration come from a Goldman Sachs background?
Why is it that so many people who have "questionable" business dealings or rising stars in this Presidential Administration come from a Goldman Sachs background?
This administration? Try every administration.
Real money has no party or political affiliation. It just buys what it wants.
Actually, real money would cover his bets and buy both sides.
MF Global ... an interation of Man Financial hasn't been around 200 years. Get your facts straight. EDF Man is a 200 year old commodity trade house and still exists. The clearing arm was detached and sold because it had too much risk.
The Tea Party should run Bernie for Pres, sounds like their kind of guy - oh I'm sorry he stole from the rich - Bad!
The leader of this con is a prominent Democrat, the Obama administration is filled with former Goldman Sachs employees, and you bring up the Tea Party?
Man, you loons have it bad for the good people.
Look at how many Goldman people were in Bush's camp? Both sides are greedy and dirty. Haven't you figured that out yet?
Recall the words of one Bernie Madoff: "There is no innocent explanation."
No kidding? I'm sure glad the CFTC is on the job, and that they noticed this after the money was gone.
Corzine figured he could do "whatever" and then get BAILED OUT. Aren't BAILOUTS just great? Without them people would have to be responsible, even honest. We can't do that!
Crooks are crooks, there's no mystery here. They stole the money just like AIG, Fanny Mae, etc.
The cops need to invest resources in investigating this crime instead of harassing the Occupy Movement. This is what it's all about!
There are no good addictions. Having all the money in the world means nothing if you don't have the moral standing to make it worthwhile. From the perspective of most, a little fudging is okay, just stop being so friggin' greedy. I guess if there are pearly gates in the hereafter, they've got a default swap on them by now.
"nefarious"?...Corzine?...Obama's guy?...interesting
I have an idea, SEC disallows politicians from public companies, and execs for public companies are barred from public office!! Then we just need to work on the campaign finance reform (the real one, not the last fake out).
Invest with your favorite 1%er and get burned. My heart goes out to you.
Everyone should get educated on the market and self invest. Most individuals outperform most funds anyway, not to mention they usually take 1%/yr to administer YOUR money.
Another Goldman Sachs thief! Just one in a long line of government sanctioned successors!
"neither Corzine nor MF have been charged with any wrong doing". according to the story. perhaps that is the problem all up and down Failstreet.
Who are the regulators and what are they regulating? How can you miss such a huge chunk of money? I hope a ton of people from MF Global go to jail and I hope a ton of regulators lose their jobs. It's the only way that people are going to learn.
"Something nefarious," Yeah, Corrupt-Zine is a LYING CROOK.
The government will always take care of the government.
It's that taxpayers that are screwed!
@where's louie
Corzine has friends in high places....in a big white house..with a mother-in-law living it...sponging
$600 million missing and no-one has been charged? I guess it's just more proof of who law enforcement really works for...
If the Teabagers had their way there would be no regulation - Take the Money and run! Sounds like Capitalism at its best !! All of the Tepublican candidates would do away with that pesky regulation on business!! I sell drugs to kids, get the police to leave me alone and I will create jobs!!
You couldnt have made a more ridiculous statement.....
what Teapublican candidate is "for" any government regulation of business??
Look how well that regulation has worked for ya! There are still pigs out there - and look, they include former Democratic Governors. Hey, I wonder if there is any correlation between the heists on wall street and obammys fund raising efforts?
Rule, you should try thinking instead of name calling.....Name calling is evidence of ignorance and nothing more.
what is you your definiton of "regulation of business" ?...please be concise , and include examples of your plan , and how you will quantify the results...also include the scope of "what" business and what penalties you plan to implement. When you have done that I will be able to decide if your ideas are valid or as I suspect , pure babble , pablum , rhetoric and liberal parrot talk...thanks
Another crook walking free among us. The "BEST" thing that could happen to this guy is that he shares a cell with Madoff. However, his cronies will surely protect his thieving ass. And, $600 mil is all they think they know is missing. While common investors of the 401k variety stagger at their losses he continues to bask in his condo/villas while his highly compensated attorneys work the gray areas for his benefit. Here's hoping some prosecutor has the balls to nail this bastards hide, all the way to cell block Madoff.
Let say a theft of $120 mills exists, then hiding it in a $1 billions total transactions business services. After fees and profit taking for business services, you have net loss of $600 millions. And dumbass people asking where $600 millions went?
If this helps anyone in charge, please give compensation and credit to yours truly.
Everyone wants to blame the messenger. The people that ran this scheme are to blame. Arrest them. Seize their assets. Find their offshore accounts and give the people back their money.
"Bulls and Bears make money, Pigs get slaughtered."
That's foolish. Regulators are supposed to stop this from happening, so there is blame (and cells) on both sides.
Nefarious, you THINK? Where were the regulators when this was going on?
Hey...we are talking about Obama's bud here. Corzine is going anywhere. Maybe the administration will put him in charge of the investigation into his wrongdoing, but that is the worst that will happen. He has a lot of money invested in Obama, and that money buys him a 'get out of jail free card'.