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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 November 2, 2011, two days after MF Global filed for bankruptcy protection.
Who knew what and when about an estimated $1.2 billion worth of client finds missing from the accounts of now-bankrupt broker MF Global Holdings Ltd?
The answer to that question is vexing a slew of regulators, the FBI, and of course the clients who would like their money back. Published reports Tuesday said $200 million worth may have been transferred to an MF Global account at JPMorgan Chase three days before the brokerage filed for bankruptcy protection on Oct. 31.
The New York Times reported that federal authorities probing where the missing money went have discovered an email chain that discusses the transfer of the funds to JP Morgan on Oct. 28. The email chain includes instructions to Edith O'Brien, a treasurer at MF Global's Chicago office, to make the transfer, the Times reported, citing people close to the probe who requested not to be named because the inquiry remains open.
O'Brien, the Times said, is considered a "person of interest" in the probe. She has not been charged with anything and may even have made the transfer without knowing it was customer's money. It's not clear who gave O'Brien the instructions. She is expected to be interviewed in the coming days, according to two of the sources, the Times said.
The newspaper said O'Brien could not be reached for a comment and a spokesman for the Commodity Futures Trading Commission declined to comment.
The Wall Street Journal reported that JP Morgan itself may have raised warning flags about the money in a letter asking MF Global whether the transfer of the $200 million ran afoul of rules governing the use of customer funds. The Journal said JPMorgan accepted the money to cover an overdraft at MF Global's proprietary trading account. It's not clear if JPMorgan still has the funds, the Journal said.
The newspaper also said a person familiar with JPMorgan's operations normally wouldn't ask for assurances about the transfer of funds to the proprietary account, but the timing of the move, amid rising financial problems at MF Global, led the bank to decide it was prudent to inquire.
MF Global, which was run by former New Jersey Governor Jon Corzine, also a former Democratic senator from that state, filed for bankruptcy protection on Oct. 31 after succumbing to a series of bets on European debt that went sour. Investigators have been probing whether MF Global used client funds, in violation of CFTC rules and standard practices, to shore itself up.
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It would be nice if someone went to jail for this. It seems this $200 million transfer and $1 billion in lost customer funds could qualify as something like grand theft larceny.
But like Obama says, the banks didn't break any law so there's no way to prosecute them.
They really should look into how JPM is involved. I think JPM knows exactly where that money is and where it came from. Rumors are that JPM CEO threatened Jon Corzine's life if he didn't return the money owed to the bank.
If a scumbag steals a billion there is little chance that they will go to jail.
Now if you are considered a terrorist threat you can be jailed forever without a trial.
Having 7+ days of food or firearms is on the watchlist for being a terrorist.
This is just the 1% being successful. There is no reason to be jealous, if ypu are not successful blame yourself......
if the missing money was used to cover shorts in their trades, then the money is long gone, J.P. Morgan, sent the money out within minutes to cover the losses of MF trading in the currency markets; here is a unanswered question; most brokerage firms have a clause in their contract with investors, that allows clients money and firms money to be co-mingled in purchases of large blocks of investments, unless more is known, there may be no criminal wrong doing .
there may be no criminal wrong doing .
If that's true our country is going down the road to Redneck nation.
Corporations are people, my friend. They just don't have any laws for them.
If you're implying that customer money can be used (legally) to purchase firm securities, that's absolutly false. Could clients be taking down portions of a large block in which the firm has also taken a portion, yes, but only when confirmed to the client as a trade.
Dmarc1959; correct, except when you get your statements, on trades, does anyone understand that the brokerage houses are also involved in the trades, unless you question every trade, you will never know.
Of course they're involved as either 'agent' or 'principle' and your trade confirm should state in what capacity they acted. What's your point?
DMAC1959; what i am trying to say, even if it a breach of fiduciary duty, in may not be criminal, that is why the SEC. has a civil fine section to punish brokers and brokerage houses, unless it can be proved that MF, and their managers profited finical in a personal way, then you do not have a criminal case, only a civil fraud action; and since they are in Bankruptcy, the trustee wold have to approve any civil actions filed, and they would be unsecured creditors, after any moneys recovered that first goes to the priority list, Banks first, Government second, investors third, civil judgements fourth, (banks prime government due to the Federal Reserve priority standing)
I expect less and less out of Washington, and I'm never disappointed. This travesty came under Obama's watch...his regulations...his regulators...and his friend. Nothing is going to happen to anybody.
But it does make you wonder, why doesn't a Billion Dollars leave any tracks?
"His friend" is right. You should have heard the way Obama yelled for his friend Corzine during a campaign speech -- his voice became audibly raw in a way I've rarely heard even from a speaker like Obama. The clip was recently dug up and featured on an episode of the No Agenda Show (a current events and media podcast), and it was disturbing to hear.
Now everybody's oh-so-predictably pleading the fifth. The reason why a billion dollars doesn't leave any tracks is because it's just ones and zeros in an electronic transaction, and traces can be erased as simply as clicking a mouse (unless there's third-party monitoring).
I am sure obama's consumer protection division will protect these peoples assets and everything will be given back! Who needs a justice department with that kind of name! Its all good. No worries.
Every time I read MF I think of mother <blanker>.
So what we need is Samuel Jackson to ask: "Where's the mother <blanking> money?"
Me too....
Corzine was Obama's and Biden's go to guy when it came to financial matters. MF global can't be bankrupt and Corzine knows where every penny of that money is. People forget that Senator Corzine co-sponsored the Sarbanes–Oxley Act which made CEO's accountable.
Simple. It's hidden and protected in off-shore banks, waiting for the job creators to flee the US when the financial system collapses so that they can live lives of obscene luxury while they giggle at our stupidity and poverty.
You watch.
If the financial system collapses as you suggest... the dollars would not be worth anything... so this theory doesn't hold water. I recognize you were kidding tho... just sayin.
Anyway, the fact of the matter is that MF was leveraged 30 to 1. Aren't there supposed to be regulations against that? It's obscene how the banks just keep doing the same thing over and over at the expense of hard working Americans.
http://www.zerohedge.com/
Zerohedge should be MSNBC.
alan_static,
And what does that say about you right here reading and posting on MSNBC? Sounnds like an oxymoran to me alan!
I need a drink, maybe some Olde Chicken
ZeroHedge, C-SPAN, and No Agenda are the news. Everything else is a bought-and-paid-for distraction.
scrambolo,
The majority of people only read things that confirm what they already believe. If Alan doesn't agree with what much of what MSNBC presents, at least give him credit for reading what the other side is saying. No one side has an exclusive on good ideas.
Bill, if you would like to do a little more research, almost all regulations Obama/Dems proposed were either watered down by Reps, eliminated, or not funded (ie: the consumer protection agency). While the cause of our recession was clearly lax regulations and even mor elax enforcement, your guys are now bent on going backwards and undoing what little has been achieved.
Plenty of regulation in this case. Been a law for years about using customer funds and not segregating them. But that like law against robbing a bank, it won't stop either from happening but punishment is totally different thing especialy when you have good connections with the white house.
Punishment? No such thing in this white house. In fact, they are probably wondering why the person didn't steal 2-3 billion and give them a bigger cut. Maybe the sec or some organization will fine them!. That ought to hurt this bankrupt company .Teach them!
The more I read about this situation and hear about how Romney made his money, the more I realize it doesn't take a rocket scientist to make money...just money and a certain level of nastiness and underhandedness. Venture capitalists may be "angels" to certain start up companies and they do lose all their money at times, but more often they make huge, obscene profits.
That a company could "lose" $1.2 billion is an example of how much money gets thrown around in these sorts of deal and so a few million dollars dropping into the CEO's pockets just doesn't get noticed.
By the way, isn't there something called "accounting" in which they actually keep track of money so they can calculate profits and losses? I suppose these days that a few billion just isn't much to worry about, so they just didn't bother to perfectly balance their books, but just rounded off to the nearest trillion dollars. Ah well, maybe some day a few million will fall into my pocket and I can become the 1%. Yes, a good title for a book: The Accidental Billionaire.
"I expect less and less out of Washington, and I'm never disappointed. This travesty came under Obama's watch...his regulations...his regulators...and his friend. Nothing is going to happen to anybody.
But it does make you wonder, why doesn't a Billion Dollars leave any tracks?"
Nothing new here. Remember ENRON when outr last president came into office??
And don't forget how that same president "lost" $9+Billion in IRAQ (by sending $12Billion cash in $100 bills and then only keeping track of ~$3Billion or so). Can you even imagine 4 C130 aircraft filled to the brim with pallets of $100 bills? WTF, O? But nobody seemed to complain about the payoffs and bribes coming from that adventure. After all it was only $9Billion. Chump change.
Then again, I'm sure Obama planned that too?
Zinger: It looks like the financial system and the government have a blank-check relationship that Al Capone could hardly have dreamed of.
This just in: I found the missing MF Global money. It was in Corzine's OTHER pants.
Corzine was one of Obama's largest fund raisers even if he gets sent to prison Obama will pardon him.Who said crime does not pay?