# MF Global and its 1066 unemployed



## Gregzs (Nov 16, 2011)

1,066 MF Global employees fired due to MF Jon Corzine

Today marks the end of MF Global.
Two hundred and thirty years after its founding, all 1,066 employees were fired.
MF Global, until recently, was a 230 year old global firm, a member of over 70 financial exchanges, one of the largest brokers by volume of executed or cleared transactions on futures and derivatives and a primary dealer in US Treasury securities.
Then along came Jon Corzine.
Corzine was appointed CEO through his long-term Goldman Sachs friendship with JC Flowers, whose private equity firm was a major owner of MF Global.
It didn???t seem an issue to his buddy from their Goldman days together that while Jon appeared to the world as a rumpled, bearded, professorial-looking, friendly uncle type he was really an ambitious, ruthless risk taker.
The following few examples illustrate just how much of a risk taker Jon Corzine is in nearly all aspects of his life.
He was blamed by many for causing Goldman Sachs to incur large trading losses in 1994 and ultimately forced out by his rival Henry Paulson.
While Governor of New Jersey, Corzine was in a nasty car accident that put him in the hospital. He had his driver speeding at over 90 miles an hour and was not wearing a safety belt.
Also during his tenure as the Governor of New Jersey, within weeks of his divorce from his wife of 33 years, Corzine was in a relationship with the President of the Communications Workers of America Local 1034, a union that represents nearly half of all New Jersey state employees. The relationship ended with Governor Corzine paying her millions of dollars.
The mundane world of MF Global, which relied upon the non-glamorous business of earning lots of small commissions from executing and clearing trades and collecting interest from cash collateral received from clients, was not sufficiently exciting and sexy enough for him.
Mr. Corzine announced to the world that he was going to create a mini Goldman Sachs. A firm that would rely on aggressive trading to make huge profits.
Unfortunately, given MF???s history of serving as a middle-man executing and clearing trades, it did not have the infrastructure and risk management systems anywhere near the level of Goldman???s.
Corzine wanted to ???take advantage of dislocations??? in the sovereign debt market by buying what it saw as relatively low risk paper.
He aggressively pushed his traders to purchase over $6 billion of European sovereign debt from some of the euro zone???s troubled countries, including Italy, Spain, Portugal, Ireland and Belgium.
This exposure was enormous ??? equal to about five times the company???s net worth.
The risk taking may have been in his blood, or maybe it was the incentive to personally benefit from the 2.5 million options he received as a signing bonus, the MF Global stock he bought in the open market or his need for redemption after getting kicked out of Goldman and the Governor???s Mansion.
Whatever the motivations, the outcome was clear. The trade ??? monster purchases of European debt (primarily Greece and Italy???s) ??? performed horribly.  The wrong-way bet blew up the 230 year old company.
Employees were fired without warning.
To add insult to injury this is one of the worst job markets in recent history for Wall Street professionals.
The firings come as the bankruptcy trustee, James Giddens, diligently works to find $600 million in missing customer money.
Federal agencies, including the CFTC, SEC and the Department of Justice, are investigating whether the money missing from customer accounts may have been improperly mixed with the firm???s funds.
Meanwhile Corzine retained a top lawyer and professed that he would not accept over $9 million in severance pay. And that is just the problem: he had nothing to lose and everything to gain. With a signing bonus of 2.5 million options, Corzine could have cleaned house with a few bold (lucky?) investments. If things had turned south he had even less than nothing to lose; he had a $9 million severance package on standby. Let???s wait and see if he sticks to his word by keeping his hand out of the $9 million cookie jar.
This raises an even bigger question. Clearly Mr. Corzine has a faulty ethics compass, to say the least, but there are some institutional forces at play in his decisions to take risks. To what extent were his actions purely reflective of his own personal greed and lack of morals and to what extent were they products of a system that incentivizes blind, risk-taking behaviors? Though, this is a question for a whole separate article.
Focusing on Jon Corzine for the time being, the situation could have been worse. As a former democratic governor and large donator to democratic races, Mr. Corzine was considered a top contender for Treasury Secretary of the United States.
While it is dreadful what happened to MF Global, imagine what he would have done as the Treasury Secretary of the United States of America.
_*Jack Kelly is a contributing writer and Publisher of CompliancEX.*_


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## lnvanry (Nov 16, 2011)

Moron preached how leverage is what tipped our economic crisis of a cliff...then takes his new company into a leveraged state than Lehman Bro.

what an idiot...I'm sure he got a sick severance package too


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## Gregzs (Dec 9, 2011)

What I heard of the testimony made me shut it off. He kept answering questions with vague excuses and uncertain recollection. One of the questions asking of he was aware that customer funds had been moved was not answered with a simple yes or no like most (or maybe some) would respond.

Former N.J. Governor Jon Corzine Begins Testimony Regarding $1.2 Billion Lost by MF Global; Faces Possible Criminal Charges | Fox News Insider

Former New Jersey Senator and Governor Jon Corzine has begun testifying today about missing money lost under his management as chief executive officer of failed brokerage, MF Global.
MF Global???s bankcruptcy is the eighth largest in U.S. history, after $1.2 billion in farmers???, ranchers??? and other clients??? money was lost and more than 1,000 employees were left unemployed.
Corzine says he has ???no idea??? where the money went, refuting claims that he over-leveraged the firm with investments in European sovereign debt by claiming he in fact reduced MF Global???s leverage under his tenure. It is still unclear why MF Global mixed customer funds with the firm???s own accounts. 
Despite his inability to account for substantial monetary losses, Corzine has expressed his deep regret in a statement.
???I was stunned when I was told on October 30, 2011, that MF Global could not account for many hundreds of millions of dollars of client money. I remain deeply concerned about the impact of MF Global???s customers and others. As the chief executive officer of MF Global, I ultimately had responsibility for the firm; I did not, however, generally involve myself in the firm???s mechanics of the [firm's] movement of cash and collateral. I had little expertise or experience in those operational aspects of the business.???​Corzine faces several lawsuits, and perhaps even criminal charges.


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## fitter420 (Dec 9, 2011)

Go figure





YouTube Video


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## ebn2002 (Dec 9, 2011)

This is Obamas boy, nominated him and everything. but nobody talks about that.


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## Dale Mabry (Dec 9, 2011)

ebn2002 said:


> This is Obamas boy, nominated him and everything. but nobody talks about that.



Nominated him for what, governor of NJ in 2006?  He never nominated him for Treasury secretary.  I guess it could be said that he almost did, but I almost got hit by a car, does that mean the driver killed me?


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## LAM (Dec 9, 2011)

this all stems from decades of deregulation in the US banking culture on wallstreet, etc and why the world is in global recession right now.  none of the fuckers that cause all these problems ever suffer the fiscal repercussions of their actions or in-actions in some cases.  stupid american's put these manipulators of "capital" up on these high pedestals all these decades as if they are gods, and they eat that shit up and buy into it.  so much of the success on wallstreet in terms of having good & bad years is simply pure luck.  2/3's of the accounts of money market managers, etc. on wallstreet lose money or do not meet projections on any given year.

from a personal perspective i'd have to say at least 50% of my buddies that work in wallstreet were c students in math in high school and some don't even have degrees and are VP's at there respective company's.  academically a lot of them are not what people think they are, far-far less skilled than most could ever imagine.


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## ebn2002 (Dec 9, 2011)

Dale Mabry said:


> Nominated him for what, governor of NJ in 2006?  He never nominated him for Treasury secretary.  I guess it could be said that he almost did, but I almost got hit by a car, does that mean the driver killed me?



I found a Dem on IronMag! 

So he was about to nominate him, found out about what was going on at MF Global, and didn't.  OK, so why didn't they do something about it then and save all these investors?  Because you now know that's what they found and why he didn't nominate him and just left all those people at MF out to dry.


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## Gregzs (Jan 4, 2012)

He is still dropping mines from the time he was Governor:

http://www.nytimes.com/2012/01/04/n...muters.html?_r=2&nl=todaysheadlines&emc=tha29


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## Big Smoothy (Jan 5, 2012)

MF Global is (another) ugly story.

Using clients funds (money) to cover themselves?  The did this, correct?

Somebody should be going to jail over this.  

But how often does that happen?


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## Big Smoothy (Jan 5, 2012)

MF Global is (another) ugly story.

Using clients funds (money) to cover themselves?  The did this, correct?

Somebody should be going to jail over this.  

But how often does that happen?


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## Canucklehead (Jan 5, 2012)

I hope all 1066 of those overpaid dinks have to go get a job at McDonald's or Home Depot or something like that. Ride the bus. Buy groceries from Wal-mart. All that good stuff.


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## LAM (Jan 5, 2012)

Big Smoothy said:


> MF Global is (another) ugly story.
> 
> Using clients funds (money) to cover themselves?  The did this, correct?
> 
> ...



not very often but that has been US history for the past 100 years.  deregulation of the financial markets by default decriminalizes fraud and other methods of rent seeking.

BOA, Wells Fargo, HSBC and Wachovia got busted laundering almost 400B of drug money from Mexico during the mid 2000's and nobody get's prosecuted.  the DC-9's they bought from McDonald Douglass to traffic cocaine, drug money.  the SUV's they order from the US, drug money....US corps don't care where it comes from

check out this paper by Akerlof & Romer from 2009 when you get the chance Smoothy

Looting: The Economic Underworld of Bankruptcy for Profit
www.signallake.com/innovation/Looting1993.pdf

the 1930s??? Pecora Commission, investigated the fraud that led to the Great Depression...the same thing will occur in later years from today regarding the causes of the Great Recession.

Economist James K. Galbraith wrote in the introduction to his father in his book the definitive study of the Great Depression, The Great Crash, 1929:

"
    The main relevance of The Great Crash, 1929 to the great crisis of 2008 is surely here. In both cases, the government knew what it should do. Both times, it declined to do it. In the summer of 1929 a few stern words from on high, a rise in the discount rate, a tough investigation into the pyramid schemes of the day, and the house of cards on Wall Street would have tumbled before its fall destroyed the whole economy. In 2004, the FBI warned publicly of ???an epidemic of mortgage fraud.??? But the government did nothing, and less than nothing, delivering instead low interest rates, deregulation and clear signals that laws would not be enforced. The signals were not subtle: on one occasion the director of the Office of Thrift Supervision came to a conference with copies of the Federal Register and a chainsaw. There followed every manner of scheme to fleece the unsuspecting ???.

    This was fraud, perpetrated in the first instance by the government on the population, and by the rich on the poor.

    ***

    The government that permits this to happen is complicit in a vast crime."


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## Zaphod (Jan 5, 2012)

lnvanry said:


> Moron preached how leverage is what tipped our economic crisis of a cliff...then takes his new company into a leveraged state than Lehman Bro.
> 
> what an idiot...I'm sure he got a sick severance package too



That's the name of the game.  These guys bounce from place to place getting killer pay and severance packages because they know somebody or somebody owes them a favor.  Clearly it's not because of their ability to run a company unless the corporate mission is to lose a shit ton of money and leave the employees out in the cold while the top guys collect more cash than the GDP of some countries.


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## Zaphod (Jan 5, 2012)

Big Smoothy said:


> MF Global is (another) ugly story.
> 
> Using clients funds (money) to cover themselves?  The did this, correct?
> 
> ...



White collar crime.  At worst a few years in a federal country club of a jail.  Mostly they just get a little bad of PR in the press and a month later they are at it again.


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## Dale Mabry (Jan 5, 2012)

ebn2002 said:


> I found a Dem on IronMag!
> 
> So he was about to nominate him, found out about what was going on at MF Global, and didn't.  OK, so why didn't they do something about it then and save all these investors?  Because you now know that's what they found and why he didn't nominate him and just left all those people at MF out to dry.



I'm not a democrat retard, I'm a libertarian. And use a little common sense, I they knew anything or could have brought him up on charges back in 2008/2009 they would have.


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## Gregzs (Jan 13, 2012)

Bloomberg Suffers, Too, in Collapse of MF Global - NYTimes.com


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## Gregzs (Feb 1, 2012)

After a Delay, MF Global's Missing Money Is Traced - NYTimes.com

*After a Delay, MF Global’s Missing Money Is Traced*

By BEN PROTESS and AZAM AHMED 
Louis Freeh, a former F.B.I. director, and James Giddens, below, a partner at Hughes, Hubbard & Reed, are MF Global trustees.
Investigators have determined what happened to nearly all of the customer money that disappeared from MF Global around the time of its bankruptcy last Oct. 31, but have not publicly disclosed their progress, fearing that doing so might cripple efforts to recover the cash and pursue potential wrongdoing, people briefed on the investigation said.

While authorities have traced hundreds of millions of dollars to banks, MF Global’s trading partners and even the firm’s securities customers, investigators remain uncertain about whether they can retrieve the money.

Some recipients were entitled to payouts from MF Global, which could make clawing back the money difficult. For instance, securities customers withdrawing their money as MF Global began to collapse were paid from accounts that belonged to futures clients, according to other people briefed on the matter.


But the Commodity Futures Trading Commission, the regulator leading the investigation, will examine whether anyone accepted customer cash without verifying the source of the money, one of the people briefed on the matter said.
This person and others who discussed the case did so on the condition of anonymity because the investigation is not public.

The findings shift the pressing question surrounding the collapse of MF Global from what happened to the money to how to recover it and who is at fault.
Answers will not come easy. A significant impediment has been clashes among the parties trying to resolve the MF Global mess: three federal agencies and two bankruptcy trustees.

At the center of the squabbling are e-mails sent by top executives at MF Global — communications that have been withheld from federal authorities, according to the people briefed on the matter. Investigators suspect the e-mails, sent just before the firm collapsed, contain clues about who transferred the money from protected customer accounts.

The clashes stem from the conflicting interests of those involved. James W. Giddens, the trustee overseeing the liquidation of the brokerage unit, is charged with returning money to wronged customers. That mission is at odds with the interests of Louis J. Freeh, the trustee overseeing the liquidation of the firm, who is seeking to recover money for MF Global’s creditors.

Mr. Freeh’s lawyers have declined to share a number of internal MF Global e-mails with Mr. Giddens and federal investigators, including the Commodity Futures Trading Commission, which has asked for access to the documents, the people briefed on the investigation said. In turn, Mr. Giddens has been slow to hand over account statements that Mr. Freeh, a former F.B.I. director, needs to conduct his court-ordered investigation and determine what creditors are owed.

Mr. Freeh’s reluctance stems in part from the fact that the lawyers working on his behalf have not made their way through the mountain of e-mail, people involved in the case said. The lawyers are loath to waive attorney-client privilege, which shields the documents from outsiders, until they have completed their review.
Despite the obstacles, federal authorities say they are making progress.

As of late December, investigators had obtained more than 10,000 e-mails, interviewed more than 50 witnesses and subpoenaed about 20 people, another person briefed on the case said.

Jill E. Sommers, the Commodity Futures Trading Commission official charged with overseeing the MF Global case, said in a December statement that transfers from customer accounts “have been identified, and subsequent transfers of those funds are currently being traced.”

Now, authorities have traced more than 90 percent of those subsequent transfers, people briefed on the investigation said.

“We understand the frustration of customers, but the C.F.T.C. must take the necessary time — however long it takes — to get to the bottom of what happened at MF Global and take appropriate actions,” the agency said in a statement on Tuesday.

Customers, including farmers, hedge funds and other small traders, have been very frustrated with the pace of the investigation and the dearth of updates about their missing money.

While a number of the 38,000 customers have been paid nearly three quarters of their money, others have yet to receive a dime. Paul Jordan, a retired business executive, has not received any of the money from accounts trading on foreign exchanges, an amount that totals about $500,000, he said. His patience is wearing thin.

“The thing that really irritates me is that I’m not a super wealthy individual,” said Mr. Jordan, 65. “I’m thankful that some funds have been paid out, because bankruptcies can last for years, but I would have hoped by this time that it would be pretty clear where the funds are and exactly what happened to them.”

In contrast, when customer cash was missing from Sentinel Management Group, a Chicago brokerage firm that collapsed in 2007, the trustee overseeing that case found the money within a week. Within a month, the trustee, Fred Grede, announced that the money had turned up at the Bank of New York Mellon.

While MF Global presents a greater challenge than Sentinel, given its size and the amount of money missing, the precedent underscores the importance of keeping customers informed.

“To me, transparency is the key,” Mr. Grede said.
Even regulators are growing anxious about how long the investigation is taking.
“Futures customers — including farmers, ranchers, and manufacturers — have been suspended in excruciating limbo, wondering when they will receive their funds,” Scott O’Malia, a member of the futures commission, said in a speech on Tuesday. “This situation is intolerable and unacceptable.”

While the commissioners are briefed weekly on enforcement cases, over the last three months they have only been briefed twice as a group on the status of the MF Global investigation, according to people close to the commission. Instead, commissioners are seeking their own separate briefings on the case.
Some argue that the lack of cohesion deprives investigators of the collective insight of staff members when the agency faces perhaps its greatest test.

In November, investigators said they began to worry that money may have vanished into a web of counterparties and creditors who are entitled to MF Global’s money. The concern implies that the money may not be missing, but is gone for good.
But at least some of the customer money MF Global misused was transferred to JP Morgan Chase, MF Global’s main bank. Investigators also suspect that MF Global made improper transfers of customer money to the Depository Trust & Clearing Corporation, a clearinghouse that did business with MF Global. The clearinghouse may have passed on the money to MF Global’s trading partners, who would have rightful claims to money from MF Global. A major part of futures customer money also went to securities customers who were closing accounts in October.

Ultimately the task of recovering money falls to Mr. Giddens, who collected the final claims on Tuesday, the last day customers were permitted to file forms outlining what they are still owed.

He has not said how far his investigation has come. He has deployed a team of 60 lawyers and hired 100 consultants from Deloitte and 60 forensic accountants from Ernst & Young to help sift through some $327 billion in wire transfers in and out of MF Global the month before its collapse.

As Mr. Giddens’s team hunts for the money, it is quietly coaxing some recipients to return it.
“We are pressing our investigative team to now come up with actionable intelligence that the trustee can use to determine the location of remaining customers assets, and most importantly, if we can get those assets back under the trustee’s control for return to customers,” Kent Jarrell, a spokesman for Mr. Giddens, said in a statement. “The trustee will use all appropriate and legal means to get those assets.”


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## min0 lee (Feb 1, 2012)

Gregzs said:


> He is still dropping mines from the time he was Governor:
> 
> http://www.nytimes.com/2012/01/04/n...muters.html?_r=2&nl=todaysheadlines&emc=tha29



He's a major fuck up in every way possible.


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## withoutrulers (Feb 2, 2012)

Were these 1066 MF global employees the same clowns raining down Mcdonald's applications onto the occupy wallstreet folks? I sure hope so, Gawd damn I love me some poetic justice.


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## LAM (Feb 2, 2012)

it's nothing more than the semi-legalized looting that the american banking/finance sector has been perpetrating on the american people for almost 100 years now..


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## min0 lee (Feb 2, 2012)

withoutrulers said:


> Were these 1066 MF global employees the same clowns raining down Mcdonald's applications onto the occupy wallstreet folks? I sure hope so, Gawd damn I love me some poetic justice.



Ha! They might want those back now.


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## Gregzs (Mar 9, 2012)

Outrage! MF Global Execs May Get Bonuses | Compliancex


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## Big Smoothy (Mar 9, 2012)

^ The US has devolved as a society.  Significantly devolved.

And also, the mutual contract of putting your money/investments somewhere for old age and counting on it, is gone.

If you're money is stolen and squandered, that's tough luck.


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## LAM (Mar 10, 2012)

Big Smoothy said:


> ^ The US has devolved as a society.  Significantly devolved.
> 
> And also, the mutual contract of putting your money/investments somewhere for old age and counting on it, is gone.
> 
> If you're money is stolen and squandered, that's tough luck.



remember Bush wanted to make all financial crimes fall under civil penal code

not sure if you heard but ALEC is trying to get retail theft turned into a felony for repeat offenders regardless of the value of the merchandise.


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## Big Smoothy (Mar 10, 2012)

LAM said:


> remember Bush wanted to make all financial crimes fall under civil penal code



GWB?  Not G.H.W.B?

By classifying financial crimes under civil penal code they do not jail time correct?  

That does not surprise me.  It's a Banker and Oil nation.



> not sure if you heard but ALEC is trying to get retail theft turned into a felony for repeat offenders regardless of the value of the merchandise.



ALEC?....sounds like an association.


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## LAM (Mar 10, 2012)

Big Smoothy said:


> ALEC?....sounds like an association.



ALEC writes most of the far right legislation at the state level. their legislation enables the US for profit prison system to grow and is why the US houses 25% of the worlds prisoners of which most are non-violent. they have been the driving force behind the rise of the prison industrial complex and for profit prisons.  the wrote all the 3 strikes laws, mandatory minimum sentences, unequal sentencing for crack, the right to work for less wage laws, education privatization, etc.  most of their legislation is in direct contrast to the best practices reported in most OECD reports.  not much good comes out of that organization, was founded by the same person that helped start Heritage.  they receive major funding through Koch, Walmart, AT&T, Johnson & Johnson and many others.  they do the dirty work for the 1% in terms of legislation.

ALEC ??? American Legislative Exchange Council | Limited Government · Free Markets · Federalism


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## Big Smoothy (Mar 10, 2012)

LAM said:


> ALEC writes most of the far right legislation at the state level. their legislation enables the US for profit prison system to grow and is why the US houses 25% of the worlds prisoners of which most are non-violent. they have been the driving force behind the rise of the prison industrial complex and for profit prisons.  the wrote all the 3 strikes laws, mandatory minimum sentences, unequal sentencing for crack, the right to work for less wage laws, education privatization, etc.  most of their legislation is in direct contrast to the best practices reported in most OECD reports.  not much good comes out of that organization, was founded by the same person that helped start Heritage.  they receive major funding through Koch, Walmart, AT&T, Johnson & Johnson and many others.  they do the dirty work for the 1% in terms of legislation.
> 
> ALEC ??? American Legislative Exchange Council | Limited Government · Free Markets · Federalism



LAM,

Thank you for this info!  I will pass it around and also do some research.  These organization have so much influence - power.

But I never knew about them. 

And look who funds them.....


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## Fetusaurus Rex (Mar 11, 2012)

LAM said:


> from a personal perspective i'd have to say at least 50% of my buddies that work in wallstreet were c students in math in high school and some don't even have degrees and are VP's at there respective company's.  academically a lot of them are not what people think they are, far-far less skilled than most could ever imagine.



This doesn't surprise me. I think all you need is a lack of conscience. People don't get to the top for their outstanding morals it seems.


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## Gregzs (Mar 13, 2012)

Getting 90% back is better than nothing. I'm sure the customers would prefer all of their investment back though.

MF Global Customers Said to Get Offers for Their Claims - NYTimes.com


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## Gregzs (May 1, 2012)

$1.6 billion in missing MF Global funds traced - Apr. 24, 2012


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## Gregzs (Jun 9, 2012)

No kidding.

http://www.nytimes.com/2012/06/09/b....html?nl=todaysheadlines&emc=edit_th_20120609


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## Gregzs (Jun 12, 2012)

How is it possible to have executives that are not registered to do anything?

Loophole at MF Global Is Headache for Regulators - WSJ.com


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## LAM (Jun 12, 2012)

the Goldman's are one of the owners of the Federal Reserve System those monies are gone...gone baby gone

no doubt he was acting under orders from them.  can't trust anyone that works or has worked for any of those company's.  those guys in finance with the exception of Madoff who appears to be some type of sacrificial lamb never have to pay for their actions.  if they do get busted for something they pay a fine and are free to continue working in that sector.


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## Gregzs (Jun 25, 2012)

Of course the loophole that made it possible has not been closed.

http://www.nytimes.com/2012/06/23/business/mf-globals-billion-dollar-loophole-common-sense.html?_r=1

[h=1]A Loophole Big Enough to Lose a Billion[/h][h=6]By JAMES B. STEWART[/h]If nothing else, the collapse of MF Global has made one thing clear: The notion that customer assets were safe was a sham.        

MF Global’s customers, who discovered that the firm had plundered $1.6 billion of their property, learned that the hard way. But they aren’t the only potential victims. The loophole that allowed MF Global to convert more than $1 billion in customer property to its own reckless bet on European debt is still in effect — although the Commodity Futures Trading Commission, which regulates futures and commodities brokers, said it had since pressured other firms to stop using it.        

The CME Group, which is both the largest commodities and futures exchange and also regulates many brokers, told me this week that when MF Global collapsed last year, four of the 40 firms it oversees were still using an “alternative” calculation of customer assets that vastly understates what firms actually owe. A spokeswoman declined to name them, saying such information was confidential. In my view, they should all be identified publicly so their customers can demand reassurances that the practice has stopped — and that their assets are safe.        

Since the Depression, when thousands of customers were wiped out by failing brokerage firms, the idea that customer assets are protected has been sacrosanct, embodied in laws and regulations that require the assets to be safely segregated. Violating these requirements is a crime.        

The rules require a firm to put aside the amount it would owe if its customers’ accounts were liquidated. This would seem simple common sense: if a brokerage firm closed or failed, customers should expect to get the full value of their assets.        
But the rules apply only to accounts in the United States. In 1987, the commodity commission approved a series of rules governing foreign futures and options transactions, one of which provided an alternative calculation of how much firms needed to put aside for accounts that traded on foreign exchanges.        

The alternative calculation almost always resulted in a lower amount — sometimes much lower — that needed to be segregated in foreign accounts, because it covered only options and futures. Cash and securities held in customer accounts didn’t count. So if a customer held only cash and securities, the firm had no segregation requirement at all.        
This may not have seemed such a big deal at the time, although even then, futures and options trading by American customers on foreign exchanges was growing rapidly. How and why this provision got into the federal register remains something of a mystery, and in the wake of MF Global’s collapse, no one seems to want to take credit (or blame) for it.        

The commodity commission’s chairman at the time, Kalo Hineman, a cattle rancher and former Republican state lawmaker in Kansas who was appointed by President Ronald Reagan, died in 2003. Some regulators said that a tougher segregation requirement for foreign accounts would have been too costly and complicated to maintain given the technology at the time. Others point out that it was better than nothing, which was the prevailing standard for foreign accounts before the rule. A spokesman for the National Futures Association offered that “U.S. participation in foreign markets was small and generally limited to commercial users.”        

None of this withstands much scrutiny if the commodity commission really wanted to protect customers. The answer may well be, as one regulator told me, “it’s what the industry wanted,” and that’s pretty much what it got.        
Why the futures and options brokers lobbied for such a loophole is obvious: it allowed firms to do whatever they wanted with customer money, including using it to speculate for their own accounts. And by last year, that was no small sum. In his recent report, James Giddens, the MF Global liquidation trustee, showed the difference between the amount the firm had to segregate using the net liquidating method and the more lenient alternative method. On many days, it was more than $1 billion, reaching a peak of $1.25 billion last Oct. 13.        

Apart from people working at the firms themselves and their regulators, few seem to have known about such an alternative calculation, even as trading on foreign exchanges has exploded. “I didn’t know it existed,” James Koutoulas, chief executive of Typhon Capital Management, a commodity trading adviser in Chicago, told me this week. “And we’re pretty sophisticated traders. I had no idea they were allowed to make a report that was so different from reality. No one ever told us a thing about this.” Mr. Koutoulas is also president and co-founder of the Commodity Customer Coalition, which is advocating for the return of MF Global customer funds.        

Nor does the alternative segregation calculation affect only foreign customers, since any resulting shortfall is shared by all customers. American customers of MF Global have lost approximately $900 million, and foreign customers about $700 million, according to Mr. Koutoulas.        

“It’s obvious that the alternative calculation let firms understate the segregation requirements,” Mr. Koutoulas said. “The industry lobbied aggressively to introduce loopholes so firms could be more aggressive with customer funds. At MF Global, cash management was designed and carried out at every level of the firm to use customer money as a piggy bank to fund the firm’s operations. They were deliberately and systematically taking customer money to fund their operations.”        

The alternative calculation not only jeopardized customer assets, but also obscured MF Global’s mounting problems and shielded the firm from regulators. The commodity commission was aware that MF Global was using the alternative calculation in the daily segregation reports it submitted to the agency as well as the CME. But MF Global officials also calculated the net liquidating amount — the real amount it owed customers — and withheld that number from regulators while circulating it internally. According to Mr. Giddens’s report, that calculation showed a glaring shortfall in the firm’s waning days. Jeff Malec, chief executive of  Attain Capital Management in Chicago, pointed out, “The alternative calculation methodology functionally allowed MF Global to live on borrowed time — presenting themselves as more stable than they really were until the clock ran out.”        

To its credit, the commodity commission is taking action. This month the commission sent a letter to all regulated futures brokers telling them the agency expects them to use the net liquidating calculation — and not the alternative calculation — for all accounts, American and foreign, “pending adoption of the new rules.” It said those new rules would include “the elimination of the Alternative Method.” The letter also said that all firms still using the alternative method had agreed to discontinue using it.        

It remains to be seen if the alternative method will also serve as an escape hatch from liability for MF Global’s top officials, who remain under investigation for possible criminal and civil actions. They and their lawyers will surely argue that taking customer funds cannot be a crime or a fraud if it was sanctioned by the commodity commission rules.        

But in Mr. Malec’s and Mr. Koutoulas’s views, the officials shouldn’t be allowed to hide behind the calculation. Based on the trustee’s report, “they knew they were in trouble long before the public knew, and some of the decisions made in the final hours showed blatant disregard for the law,” Mr. Malec said. Mr. Koutoulas was more vehement: “I unequivocally think crimes were committed.”        

Whatever the outcome, MF Global will be a sorry chapter in the history of federal regulation. The alternative method blatantly put the interests of regulated firms over their customers, and it never should have been enacted. That it now seems likely to be repealed may be a “silver lining,” Mr. Malec said. “The whole scandal really opened the eyes of the futures industry participants. Everyone had assumed that segregated funds were sacred, and why not? Prior bankruptcies had always been resolved without clients losing money. MF Global was a disaster, but we believe the end result will be a stronger, better futures industry.”


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## LAM (Jun 25, 2012)

that's the US "free market" system at work...the US financial sector is "free" to openly steal from the people and give to themselves.  and when they fuck up the taxpayers that don't benefit from their self-serving business practices have to support them.


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## ebn2002 (Jun 26, 2012)

LAM said:


> that's the US "free market" system at work...the US financial sector is "free" to openly steal from the people and give to themselves.  and when they fuck up the taxpayers that don't benefit from their self-serving business practices have to support them.



So stop buying the shit.  LMAO everybody thinks wall street steals their money but can't wait to buy penny stocks and Facebook then cry when they lose.  Seriously, if you think the markets are to openly steal your money, JUST DON'T USE THEM.  Fuking brilliant, I know.

It's like saying, hey every time I go to Home Depot they rip me off!  I was there three times last week, can you believe they keep doing it!  I'm gonna go back and buy more stuff today, hope it doesn't happen again!


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## LAM (Jun 26, 2012)

ebn2002 said:


> So stop buying the shit.  LMAO everybody thinks wall street steals their money but can't wait to buy penny stocks and Facebook then cry when they lose.  Seriously, if you think the markets are to openly steal your money, JUST DON'T USE THEM.  Fuking brilliant, I know.
> 
> It's like saying, hey every time I go to Home Depot they rip me off!  I was there three times last week, can you believe they keep doing it!  I'm gonna go back and buy more stuff today, hope it doesn't happen again!



what do you consider the massive fraud committed by Wallstreet and the ratings agency's in regards to the bogus AAA rated securities that they sold to investors in the US and worldwide?  

40-50% of the increases in the major indexes in the 2000's was due to artificially created housing boom..


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## ebn2002 (Jun 26, 2012)

LAM said:


> what do you consider the massive fraud committed by Wallstreet and the ratings agency's in regards to the bogus AAA rated securities that they sold to investors in the US and worldwide?
> 
> 40-50% of the increases in the major indexes in the 2000's was due to artificially created housing boom..



Again, if you don't buy any rated paper (bonds), and don't buy any stocks, how would this affect you?  It wouldn't.  So instead of bitching, don't buy the product anymore!  If everybody pulled their money from the market it would send a message that you are not gonna take it anymore.  But that won't happen.

And now you are gonna blame the housing boom on the banks, and I agree they gave out loans to people they shouldn't have, but it takes two to tango and the american people leveraged and leveraged houses that they couldn't even afford in the first place.  So, the banks share some of that blame, but so does every other American that bought a house they couldn't afford with an adjustable rate mortgage to meet the minimum payment with no regard for the future.

Again, if you don't like the idea of your house being priced to the market, rent something.  I'm not saying Wall street is good, and not corrupt, I'm saying if you don't like something dont use it, dont buy it, find an alternative.  Pull your money from the market, use a credit union, pay off and cut up your credit cards, live in a house you can afford with cash, pay your car off, until you do all this YOU ARE CONTRIBUTING TO THE PROBLEM, and as long as you keep giving away your money people will keep taking it.


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## LAM (Jun 26, 2012)

ebn2002 said:


> Again, if you don't buy any rated paper (bonds), and don't buy any stocks, how would this affect you?  It wouldn't.  So instead of bitching, don't buy the product anymore!  If everybody pulled their money from the market it would send a message that you are not gonna take it anymore.  But that won't happen.
> 
> And now you are gonna blame the housing boom on the banks, and I agree they gave out loans to people they shouldn't have, but it takes two to tango and the american people leveraged and leveraged houses that they couldn't even afford in the first place.  So, the banks share some of that blame, but so does every other American that bought a house they couldn't afford with an adjustable rate mortgage to meet the minimum payment with no regard for the future.
> 
> Again, if you don't like the idea of your house being priced to the market, rent something.  I'm not saying Wall street is good, and not corrupt, I'm saying if you don't like something dont use it, dont buy it, find an alternative.  Pull your money from the market, use a credit union, pay off and cut up your credit cards, live in a house you can afford with cash, pay your car off, until you do all this YOU ARE CONTRIBUTING TO THE PROBLEM, and as long as you keep giving away your money people will keep taking it.



the US stock market is bullshit.  the vast majority of stock holdings are in the hands of the few, its not even a close representation of the economic health of the US economy. if you do your research you can also track major increases in the money supply from the FRB to major increases in the stock indexes.

and how does it effect me?  Well 40% of the wealth of the working class is gone, never to be replaced. I have hundreds of friends across the country most with children that are in a much worst financial position today than they were in the 1990's through no fault of their own and as a small business owner my annual revenue is down about 350-400K since 2009-2010.

*70% of the loans from 2000-2006 were cash-out refi's not first time home buyers*. babyboomers pulled out almost 3T in equity to fuel consumption which attributed to the entire increase in US GDP during the 2000's.  there isn't one single economic paper from anyone in the industry or outside that have contributed the cause of the housing crisis to LMI borrowers, that's the rhetoric of GOP politicians and conservatives on the far right with no empirical data to support those statements.

the economic letter from the Federal Reserve Board SF below shows in graphic detail exactly how the loss of wealth from the working class has effected consumption and in term the continued high unemployment rate from that decrease of wealth/consumption.   income, wealth and consumption are all directly correlated.  economics in a consumption based economy isn't rocket science.  


FRBSF Economic Letter: Gauging the Impact of the Great Recession (2011-21, 7/11/2011)


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## Jeeper (Jun 26, 2012)

And the working class were the first to cash out their mortgages to buy boats, rv's and cars they couldn't afford.  I see clients every day of mine in divorces that took 200K out of their mortgage to buy worthless stuff for recreation.  No one had a gun to their head.  The banks were stupid to make the loans and the people were stupid to take the money.


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## ebn2002 (Jun 27, 2012)

Jeeper said:


> And the working class were the first to cash out their mortgages to buy boats, rv's and cars they couldn't afford.  I see clients every day of mine in divorces that took 200K out of their mortgage to buy worthless stuff for recreation.  No one had a gun to their head.  The banks were stupid to make the loans and the people were stupid to take the money.



Thank you.  Takes two to tango.  People weren't too upset when their home value tripled, they rushed to take advantage of it, but want to cry when the value comes back down to reality.

And Lam, to your point that your revenue is down, I am sorry to hear that.  It reminds me of the 50 year olds that are unemployed because they refuse to take a job making 45k per year, they are certain they are worth more than that and have made more than that in the past.  However, I would argue your revenues and the wages paid to americans from 1990-2006 were artificially inflated, and are now where they should have been all along.  So be glad you were able to take advantage of that time period, your kids will not have that and this will always be their reality.


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## Gregzs (Nov 18, 2012)

Congressional unit blames Corzine for MF Global collapse | NJ.com

Congressional unit blames Corzine for MF Global collapse
Jon Corzine?s decision to ramp up risky bets at MF Global while ignoring the need to improve its systems for protecting customer money were two of the key mistakes he made that ultimately caused the firm to collapse and more than $1 billion in customer funds to disappear, according to a summary of a congressional report to be released Thursday.

The report, by the investigative arm of the House Financial Services committee, will place the blame for MF Global?s historic failure squarely on Corzine, who took over as its chief executive and chairman in 2010 after losing his bid to be re-elected governor of New Jersey. 

"This failure represents a dereliction of his duty as MF Global?s chairman and CEO," the subcommittee wrote in a summary issued today, referring to the firm?s failure to maintain systems for protecting customer money.
But lawmakers will stop short of recommending any legal sanction against Corzine, or any other current and former MF Global officials, according to a summary of its findings released today.

The report will portray Corzine as an authoritarian chief executive who ignored apparent risks to spearhead a massive market gamble that doomed the 230-year-old commodity brokerage and caused $1.6 billion in customer funds to vanish.
"Choices made by Jon Corzine during his tenure as chairman and CEO sealed MF Global?s fate," Rep. Randy Neugebauer (R-Texas) said in today?s summary. "Corzine dramatically changed MF Global?s business model without fully understanding the risks associated with such a radical transformation."

The report is the product of three congressional hearings, interviews with more than 50 witnesses and a review of more than 243,000 documents, the Republican-led subcommittee said. However, it comes without the immediate support of the subcommittee?s ranking Democrat. Rep. Mike Capuano of Massachusetts said he would not co-sponsor the report because of insufficient time to review it with other Democratic members. 

"While I agree with a number of the report?s observations and recommendations, others require additional commentary," Capuano said in a statement, adding that he is preparing an addendum to the report.
Today?s summary contained little new insight into the causes of MF Global?s failure. 
The firm imploded in October of last year after a weak earnings report and a disclosure that it held a $6.3 billion exposure to troubled European sovereign debt triggered a series of ratings downgrades and sent investors fleeing. A last-minute attempt to sell the firm to a competitor was dashed when it emerged that hundreds of millions of dollars of MF Global customer funds had disappeared during the firm?s frenzied final week.

Lawmakers today said funds disappeared largely because of the failure under Corzine to improve controls and systems at the firm that would have helped it manage its own cash and protect customers funds during a crisis. As MF Global struggled for survival, its workers ended up tapping company funds that were held in customer accounts. "However, because they did not have an accurate accounting of the amount of customer funds the company held, they withdrew customer funds as well as company funds." 

The subcommittee said prosecutors and regulators will have decide whether MF Global or its employees broke any laws or regulations in disbursing customer funds. But it said the responsibility for maintaining robust systems fell on Corzine. 

A spokesman for Corzine blasted the subcommittee?s characterizations of Corzine?s leadership and business strategy. "At all times Mr. Corzine acted in good faith and did what he believed was necessary to turn around MF Global," spokesman Steven Goldberg said in a statement. 

Goldberg also said "it is worth noting that, consistent with Mr. Corzine?s congressional testimony, the House subcommittee apparently did not find any evidence that Mr. Corzine acted in bad faith or engaged in any intentional wrongdoing."
MF Global?s bet on European sovereign debt was a part of Corzine?s attempt to ramp up profit at the struggling futures dealer and transform it into an investment bank akin to Goldman Sachs, the Wall Street powerhouse where Corzine made his fortune in the years before he entered politics.

In doing so, Corzine turned himself into MF Global?s "de facto chief trader" as he pushed the firm to make ballooning bets on European debt and kept this outside the company?s risk review process, the committee?s summary said. He also chose to use the bonds as collateral for other trades, known as repurchase-to-maturity transactions, which allowed the company to book profits quickly while keeping the bonds off of its balance sheet, the committee said.
All the while Corzine created an "authoritarian atmosphere" at the firm, allowing no challenge of his decisions, the subcommittee wrote. 

When MF Global?s chief risk officer questioned Corzine on the expanding size of the firm?s European bond portfolio, Corzine "sidelined" him by forcing to report to Bradley Abelow, MF Global?s chief operating officer, rather than directly to the firm?s board of directors. Abelow, also a Goldman Sachs alum, was Corzine?s chief of staff and treasurer when he was governor. Gary Naftalis, an attorney for Abelow, didn?t return a call.


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## LAM (Nov 18, 2012)

ebn2002 said:


> However, I would argue your revenues and the wages paid to americans from 1990-2006 were artificially inflated, and are now where they should have been all along.



how could they possible have ever been inflated if they rose at 50% of the real inflation rate?  how could they have been inflated if the costs of housing, food, energy and health care all rose at rates double that of real income growth?


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## LAM (Nov 18, 2012)

and if there were so inflated why did household debt go from the historical avg of 50% of GDP to 100% when the collapse occurred in 2008?

Household Sector: Liabilities: Household Credit Market Debt Outstanding (CMDEBT) - FRED - St. Louis Fed

and why do so many economists write reports on falling and stagnant wages in the US and not a single report on inflated wages?


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## Big Smoothy (Nov 18, 2012)

LAM said:


> and if there were so inflated why did household debt go from the historical avg of 50% of GDP to 100% when the collapse occurred in 2008?
> 
> Household Sector: Liabilities: Household Credit Market Debt Outstanding (CMDEBT) - FRED - St. Louis Fed
> 
> and why do so many economists write reports on falling and stagnant wages in the US and not a single report on inflated wages?



LAM, 

Thanks again for info that is helping me become more knowledgeable.  I googled and Wikied "CMDEBT"

I hope this definition is correct.  "Consumer + Mortgage" Debt. 

This mean *all* debts, combined.  



> Household debt
> From Wikipedia, the free encyclopedia*
> 
> Household debt is defined as the amount of money that all adults in the household owe financial institutions. It includes consumer debt and mortgage loans. A significant rise in the level of this debt was a cause of the U.S. and European economic crises of 2007-2012. Several economists have argued that lowering this debt is essential to economic recovery in the U.S. and selected Eurozone countries.*[1][2]



Entire: Household debt - Wikipedia, the free encyclopedia


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## LAM (Nov 18, 2012)

Big Smoothy said:


> LAM,
> 
> Thanks again for info that is helping me become more knowledgeable.  I googled and Wikied "CMDEBT"
> 
> ...



yep you got it Smoothy....and that debt exploded in the 80's peaking in 2008 at 100% of US GDP.

and what happened in the 80's?  unions were busted, overall US tax code was made less progressive, dollar was devalued via monetary policy out of the Fed, the markets were deregulated and the rise of the self serving US financial sector began.  the beginning of the end of the working class in the US and the rise of the plutocrats in the US and any country that adopted neo-liberal economic policies.


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## Big Smoothy (Nov 18, 2012)

LAM said:


> yep you got it Smoothy....and *that debt exploded in the 80's peaking in 2008 at 100% of US GDP.*



Yes, when you look at the chart, the CMDEBT starts to increase in 1970, but in 1980 - pow - a sharp and steady increase, and then in 2000 - a big pow - It goes up much more sharply.

This graph should be seen by every American. 

I am assuming, because I can only assume, the higher mortgage debt (higher debt-to-income ratio) was the main driver in the late 90s and year 2000 and onward.

And certainly, consumer debt (cars, durable goods, and CCS) were a factor also.


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## LAM (Nov 18, 2012)

the 70's is when manufacturing in the US really started to see profits decrease.  decades of high labor union rates (high for the US but not OECD) gave labor a decent share of the increases in productivity and owners wanted that to end.  that's when good old Red Ronnie smashed the unions and the Trilateral Commission was able to get their agenda turned into law with the passing of NAFTA which was actually proposed by a democrat but was pushed through with republican votes.

when you realize what has been intentionally done to the US economy to further enrich the top 1% it's easy to understand how fragile the economy is now.  with so many making so little and the costs of goods ever increasing far above the meager increases in real income.

I have to find the paper but in 20 years they are saying anyone with out a 4 year degree working in their field will be making 1970's wages once adjusted for inflation.  so that will be the majority of the US workforce earning 1970's wages and paying for goods and services in 2030 prices.  

*the US will be the next Mexico, it's not a matter of if but of when.*


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## Gregzs (Jan 30, 2013)

MF Global's Bankruptcy Closes In on Happy Conclusion - NYTimes.com

[h=3]MF Global?s Bankruptcy Nears a Happy Conclusion[/h]By BEN PROTESSWhen Mahesh Desai checked his MF Global account 15 months ago, his $580,000 nest egg was gone.

Like thousands of investors and farmers who had their savings with MF Global, Mr. Desai lost his money in the brokerage firm's chaotic final days. Regulators discovered that $1.6 billion was trapped in a web of improper wire transfers, a stunning breach that sent federal investigators scrambling to build a case.

On Thursday, a bankruptcy court will review a proposal that would return 93 percent of the missing money to customers like Mr. Desai. And the trustee who has submitted the proposal, James W. Giddens, has quietly identified a way that, if sent to the judge and approved, could plug the remaining shortfall for customers in the United States, according to people involved in the case.

The broad push to make MF Global customers nearly whole, a goal now surprisingly within reach, is a remarkable turnaround from the firm's 2011 bankruptcy filing when such a recovery seemed impossible.
"I'm surprised that, magically, the money has shown up," said Mr. Desai, a software account executive who, like most customers in the United States, has only 80 percent of his money. "I feel very relieved."

Customers are not the only ones exhaling. The hearing on Thursday presents a turning point for several major players in the MF Global case, including the firm's trustees, creditors and former executives.

For one, Mr. Giddens late last year made peace with an overseas administrator tending to the firm's British unit and Louis J. Freeh, the MF Global trustee recovering money for creditors. The pact ended a bitter fight over access to limited resources.
And Jon S. Corzine, the former New Jersey governor who headed MF Global when it collapsed, can now claim some small degree of vindication. The European bonds at the center of a $6.3 billion bet by Mr. Corzine fully paid out when they matured in recent months.

The large position in European sovereign debt in 2011 unnerved MF Global's investors and ratings agencies. Yet it is now clear that the bonds, which were sold to George Soros and other investors, were not by themselves to blame for felling MF Global. The firm also struggled after a one-time charge depressed its earnings.

Mr. Corzine, a former chief of Goldman Sachs, has started to regain his footing. He spent the summer on Long Island, traveled to France around the holidays and visited Central America for a humanitarian project involving children, setting up what he hopes will become a broader charitable effort. Mr. Corzine, 66, also spends time with his grandchildren and has office space in Midtown Manhattan, where he writes and trades with his own money.

In the most telling indication that Mr. Corzine is taking steps to put MF Global behind him, he was close to cooperating with Richard Ben Cramer, an author and a Pulitzer Prize-winning reporter, on a biography. Mr. Corzine's lawyers were in the final stages of negotiating with Mr. Cramer this month when the author died from complications of lung cancer.

Despite Mr. Corzine's progress, he still must shake a nagging federal investigation. While investigators have long doubted their ability to file criminal charges against him, suspecting that chaos and lax controls were at play, rather than outright fraud, they continue stitching together evidence on the firm's demise.

Federal authorities interviewed the former chief over two days in September, according to people close to the case, a sign that the government saw him more as a witness than a suspect. When prosecutors have damning evidence, they often file charges rather than offer a voluntary interview.

But Mr. Corzine, unsurprisingly, has yet to receive assurances that he is in the clear. And investigators continue to examine one of his statements from the September session, the people close to the case said. The statement involved Mr. Corzine's recollection about a phone call he had with JPMorgan Chase, which received a suspicious $175 million transfer from MF Global on its last day of business. A spokesman for Mr. Corzine declined to comment on the case.

JPMorgan sought written promises that the money did not belong to customers, but never received such assurances. An e-mail reviewed by The New York Times shows that Edith O'Brien, an MF Global employee who oversaw the transfer, told Mr. Corzine that the money belonged to the firm, not clients.

Ms. O'Brien declined to cooperate with the investigation without receiving immunity from criminal prosecution. But the government is hesitating to grant her request, according to the people close to the case, fearing that doing so would set a bad example for future investigations.

Other MF Global employees, including several who stayed to help unwind the firm, are moving on. Henri Steenkamp, MF Global's chief financial officer, recently departed. And Bradley Abelow, the firm's chief operating officer, who worked for Mr. Corzine at Goldman and the New Jersey governor's mansion, left late last year. Weeks earlier, he bought a $1 million condominium in the Williamsburg neighborhood of Brooklyn, according to property records.
With Mr. Abelow gone, Laurie Ferber, the firm's general counsel, remains the highest-ranking executive on Mr. Freeh's payroll.

For Mr. Freeh, the most significant breakthrough came in late December when he joined a deal with Mr. Giddens and the British administrator.

Under the terms of the broad settlement, the administrator will pay an estimated $500 million to $600 million to Mr. Giddens, ending a dispute over customer money trapped overseas. The deal also prompted Mr. Freeh to drop more than $2 billion in claims against Mr. Giddens, who hailed the pact as a "critical milestone."

"This is the eighth-largest bankruptcy in history and we've been able to sprint ahead on some occasions, but this is a marathon," Mr. Giddens's spokesman, Kent Jarrell, said in a statement.

The deal, if approved by the bankruptcy judge on Thursday, will enable Mr. Giddens to return up to 93 percent of the money of MF Global's United States customers. If a series of settlements with JPMorgan and other firms fall into place, people involved in the case said, Mr. Giddens could ultimately return 100 percent of the missing money.

To plug the gap, he must also pursue a small pot of money sitting in MF Global's general estate, a move that would require court approval. Even if he takes that path, foreign clients will still face significant shortfalls.
For some creditors, the race to recover their millions has moved too slowly. Some have grumbled about the roughly $42 million in fees for Mr. Freeh and other lawyers, focusing on parking bills and first-class air travel.

A group of hedge funds and other companies that held MF Global bonds at the time of the bankruptcy recently introduced a plan to liquidate the firm's remains and accelerate the payout process. The group, led by Silver Point Capital, said it expected customers to recover 100 percent of their money.

But not every customer will cash in. Some, in desperation, sold their claims last year at 89 or 91 percent to hedge funds and banks. Mr. Desai held out. "My hope has always been 100 percent," he said.
Mr. Desai credits the turnaround to Mr. Giddens and James L. Koutoulas, a Chicago hedge fund manager who became a voice for thousands of customers whose money disappeared.

While Mr. Koutoulas continues to fight, it has come with collateral damage. After he appeared on CNBC in 2011 to criticize JPMorgan Chase over its role in the bankruptcy, the bank closed his account and froze his credit card. The bank declined to comment.


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## LAM (Jan 31, 2013)

and not one single criminal charge against any of them.


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## Gregzs (Apr 6, 2013)

MF Global report blames Corzine - Compliancex | Compliancex


MF Global report blames Corzine

Jon Corzine helped bring down MF Global with a dangerous trading strategy and inadequate risk controls, according to the court-appointed trustee to the collapsed brokerage?s bankruptcy.
Mr Corzine, the former chief executive of Goldman Sachs who ran MF Global from March 2010 to its failure in October 2011, embarked on a ?risky business strategy? of betting on European government debt and ignored ?glaring deficiencies? in controls, found Louis Freeh, the trustee.

Unusually for a chief executive, Mr Corzine executed some of the trades personally, ?even placing trades in the middle of meetings?, Mr Freeh found.
In a report to the court, he wrote that ?negligent conduct? perpetrated by the collapsed brokerage?s management contributed to the company?s 2011 failure, in which about $1bn of customers? money went missing.


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## Dark Geared God (Apr 7, 2013)

Reagan/bush's fault in 3..2..1 Go for lam


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## Gregzs (Apr 17, 2013)

LAM said:


> and not one single criminal charge against any of them.



Perhaps not for the officers like Corzine.

Ex-MF Global Broker Sentenced to 5 Years for Trades - Compliancex | Compliancex

Former MF Global (MFGLQ) Inc. broker Evan Brent Dooley was sentenced to 5 years in prison for making unlawful unauthorized trades that caused the now-defunct futures firm to lose more than $141 million in 2008.
The sentence, half of what the government sought, was imposed today by U.S. District Judge Robert M. Dow in Chicago. Dooley, 45, pleaded guilty in December to two counts of violating speculative position limits under the Commodities Exchange Act. Each count carried a maximum sentence of five years in prison. He was also sentenced to one year of supervised release and must pay $141 million in restitution.

While Dooley was indicted in 2010, more than a year before the bankruptcy filing of brokerage parent MF Global Holdings Ltd., the incident was cited as an example of risk management weakness in a 124-page report released this month by trusteeLouis Freeh analyzing the firm?s failure.


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## LAM (Apr 17, 2013)

so that's one small fish out of how many?


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## Gregzs (Apr 24, 2013)

Trustee for collapsed MF Global sues former CEO Corzine, alleging he breached fiduciary duty - The Washington Post


NEW YORK ? The trustee in the MF Global Holdings bankruptcy case has sued ex-CEO Jon Corzine and other former executives, alleging that they pushed the company into risky practices that ultimately led to its collapse.
The lawsuit, filed Monday in bankruptcy court in New York, says Corzine and two other top executives ?dramatically changed? the company?s business plan after he became CEO in 2010. They then failed to update controls and other systems that were already weak, the lawsuit says. Corzine pushed the company into making big bets on bonds issued by European countries, the lawsuit says, a move that proved disastrous during the implosion of the debt crisis the following summer. MF Global collapsed in October 2011.


Tuesday, a spokesman for Corzine called the lawsuit ?a clear case of Monday morning quarterbacking.? The spokesman, Steven Goldberg, said the lawsuit intentionally ignored the fact that some of MF Global?s trading partners failed and didn?t pay what they owed to MF Global.

According to the lawsuit, however, the company?s controls were so poor that it couldn?t determine its liquidity levels in real time.  It portrays Corzine and others as aware of the risks but purposefully ignoring them. Corzine, who stepped down as MF Global CEO soon after the collapse, is the former co-chairman of Goldman Sachs, a former Democratic U.S. senator and the former governor of New Jersey.

Corzine and two of his top executives, the chief operating officer and the chief financial officer, ?were repeatedly warned ? in reports, meetings, emails, and in-person exchanges ? of the failures and need for improvements in the company?s procedures and controls,? the lawsuit says. ?Yet, instead of taking necessary steps to fix those problems,? the suit says, Corzine and his deputies ?pursued an even riskier business plan.?

The lawsuit is notable not because of any significant revelations but because it represents an escalation in the battle between Corzine and the bankruptcy trustee, former FBI director Louis Freeh. Freeh is overseeing the wind-down of MF Global Holdings, which means he is trying to recover money for creditors.

The suit seeks ?damages in an amount to be determined at trial? and ?other and further relief as the court deems appropriate.?

Earlier this month, Freeh filed a scathing report about Corzine and other executives with many of the same accusations. At the time, he said that he had already prepared a lawsuit against the former executives, but agreed not to file it until first attempting to resolve the issues through mediation. The mediation still continues, but Freeh said Tuesday that he thought it was in the best interest of the creditors to go ahead and file the lawsuit.
Goldberg, the spokesman for Corzine, faulted the portrayal of the former CEO and Freeh?s decision to file the lawsuit even as mediation continued.

 ?Mr. Corzine was recruited to revitalize a troubled company, and during his entire tenure as CEO he worked tirelessly with the board, firm management and world-class consultants to improve MF Global?s operations and performance,? Goldberg said.  He added that Corzine looked forward ?to proving the actual facts in court.?

It?s not the first lawsuit against Corzine: MF Global shareholders and customers have also filed complaints. A separate trustee, James Giddens, who is in charge of recovering money for customers of the company?s brokerage operation, MF Global Inc., last year joined the customers? lawsuit against Corzine and other former executives.

To date about 89 percent of the money has been recovered for U.S. customers of the firm and around 18 percent for foreign customers, according to Giddens.

No one has been charged in the MF Global case. The U.S. Commodity Futures Trading Commission, Congress and a federal grand jury in Chicago have investigated MF Global?s failure and the disappearance of customers? money.
CFTC Commissioner Bart Chilton said Tuesday that acting as a steward of customer money, as MF Global did, is a ?super-serious responsibility.?

 ?Anyone who violates the law, and particularly anyone at MF Global who used a billion bucks of customer cash that should have been protected, should be punished appropriately,? Chilton said in a statement.


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## Gregzs (Jun 28, 2013)

MF Global settles with CFTC; Corzine and O'Brien face civil penalties, trading ban - Pensions & Investments

MF Global settles with CFTC; Corzine and O'Brien face civil penalties, trading ban

The U.S. Commodity Futures Trading Commission filed an enforcement action on Thursday alleging unlawful use of customer funds and other violations against MF Global Inc. and its parent company, MF Global Holdings Ltd. 

Jon S. Corzine, chairman and CEO of MF Global and MF Global Holdings, and Edith O'Brien, assistant treasurer of MF Global, also were charged in the civil case filed in U.S. District Court in Manhattan, according to a news release from the CFTC.

MF Global and MF Global Holdings were charged with: misuse of client investment funds; failure to segregate client funds; failure to provide adequate supervision; making misleading statements; and reporting violations.

MF Global has agreed to settle the CFTC's charges by repaying all of the approximately $1 billion lost by its commodity customers in October 2011 ? when MF Global collapsed ? and $100 million in penalties. The settlement was approved by the firm's bankruptcy trustee, James W. Gidden, according to the final consent court settlement. 

The settlement is subject to U.S. District and Bankruptcy court approval, according to the release. MF Global filed for Securities Investor Protection Act bankruptcy protection on Oct. 31, 2011. 

Mr. Corzine was charged ?as a control person? with failure to segregate funds and misuse of customer assets as well as failure to supervise in his role as MF Global's CEO. Ms. O'Brien was charged with aiding and abetting the failure to segregate and misuse of client funds.

MF Global Holdings, Mr. Corzine and Ms. O'Brien are not covered by the CFTC's settlement with MF Global. The CFTC said in its release that it seeks full restitution and unspecified monetary penalties from the three remaining defendants. The CFTC also seeks to ban Mr. Corzine and Ms. O'Brien from trading in futures markets.

?This is an unprecedented lawsuit based on meritless allegations that Mr. Corzine failed to supervise an experienced back-office professional who was located in a different city and who did not report to Mr. Corzine or even to anyone who reported to Mr. Corzine,? said attorney Andrew Levander, a partner at law firm Dechert, in an e-mail. Mr. Levander is representing Mr. Corzine.

?After 20 months of thorough investigations by the Department of Justice, two bankruptcy trustees and the CFTC, no evidence has been found that contradicts Mr. Corzine's sworn testimony before Congress. Mr. Corzine did nothing wrong, and we look forward to vindicating him in court,? Mr. Levander added.


CFTC Charges MF Global Inc., MF Global Holdings Ltd., Former CEO Jon S. Corzine, and Former Employee Edith O???Brien for MF Global???s Unlawful Misuse of Nearly One Billion Dollars of Customer Funds and Related Violations


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## LAM (Jun 29, 2013)

civil penalties....what a fucking joke


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## Bowden (Jun 29, 2013)

ebn2002 said:


> So stop buying the shit.  LMAO everybody thinks wall street steals their money but can't wait to buy penny stocks and Facebook then cry when they lose.  Seriously, if you think the markets are to openly steal your money, JUST DON'T USE THEM.  Fuking brilliant, I know.
> 
> It's like saying, hey every time I go to Home Depot they rip me off!  I was there three times last week, can you believe they keep doing it!  I'm gonna go back and buy more stuff today, hope it doesn't happen again!



The problem is that no one can escape wall street unless they want to live in a cave.
In example but not all inclusive every single local, state and the federal government, foreign countries , personal retirement account, pensions, banks, the housing industry ect have a relationship with and are impacted by what occurs on wall street to some degree. 
That is why when wall street melted down in 2008 the impact cascaded into most sectors of the economy, a global great recession was the result and people world wide lost their jobs, their homes and a great deal of their wealth.
The result of this is that big government had to step in and implement massive socialization rescue packages aka. bailout wall street in-order to prevent a worldwide depression.


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## Gregzs (Jul 9, 2013)

The Department of Justice has dropped the criminal case against Jon Corzine over MF Global - The Tell - MarketWatch

Jon Corzine will not face criminal charges over MF Global: report

There will be no criminal charges for former New Jersey Governor Jon Corzine over the use of customer funds leading up to collapse of MF Global.

The criminal probe into whether there was wrongdoing on the part of Corzine by the Department of Justice will now be dropped due to lack of evidence, said a report in The New York Post, citing a person with knowledge of the matter.

But the former CEO of Goldman Sachs is not out of the woods.

Corzine is facing civil charges by the Commodities Futures Trading Commission for illegally using customer funds in the last few days of MF Global to help keep the company afloat.  The firm?s former assistant treasurer Edith O?Brien is also caught up in the scandal and charged by the CFTC for making the transfers.

Ultimately Corzine was charged by the regulator for failure to segregate and misuse of customer funds and failure to supervise diligently.  O?Brien was charged with one count failure to segregate and misuse of customer funds.

To support the allegations, the CFTC used a recorded telephone conversations to support their charges that Corzine was fully aware of the transfers.

Both Corzine and O?Brien have denied any wrongdoing.


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## LAM (Jul 9, 2013)

Bowden said:


> That is why when wall street melted down in 2008 the impact cascaded into most sectors of the economy, a global great recession was the result and people world wide lost their jobs, their homes and a great deal of their wealth.
> The result of this is that big government had to step in and implement massive socialization rescue packages aka. bailout wall street in-order to prevent a worldwide depression.



I would consider that partially true as the vast majority of Americans have so little wealth invested in retirement savings, most less than 40-50K.  only those older than the Boomers really had any substantial wealth invested in those markets. most of the bailout monies went to private individuals/majority shareholders, etc.  take the Citibank bailout package it was worth 2.5T between the years of 2007-2010.  below is the proxy statement and an excerpt from it. 

?The holders of our Interim Securities following the consummation of the USG [U.S. Government]/Private Holders Transactions will be the USG, the Government of Singapore Investment Corporation Pte Ltd., the Kuwait Investment Authority, HRH Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud, Capital Research Global Investors, Capital World Investors, the New Jersey Division of Investment, Sanford I. Weill and the Weill Family Foundation. After the approval of the Authorized Share Increase and the conversion of the Interim Securities into shares of common stock, depending on the levels of participation in the Exchange Offers, some of these persons will be significant stockholders, and certain of these persons may hold more than 5% of our common stock.? 

Definitive Proxy Statement

you also can't forget that US large firms drastically reduce workforce numbers as payroll is the #1 expense.  that's why US large firms saw profits increase by 10% and their foreign counterparts saw losses of the same.  50% of the jobs lost across the OECD occurred in the US alone, while only having 25% of the total OECD population.  it's the oldest trick in the book, use attrition to reduce the workforce and squeeze more productivity out of less workers as they have no were else to go.


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## Gregzs (Nov 13, 2013)

UPDATE 2-Corzine, banks fail to win dismissal of MF Global lawsuit | Reuters

UPDATE 2-Corzine, banks fail to win dismissal of MF Global lawsuit

NEW YORK, Nov 12 (Reuters) - A federal judge on Tuesday rejected a bid by former MF Global Holdings Ltd chief executive Jon Corzine to dismiss investor litigation seeking to hold him, other executives and many banks responsible for the futures brokerage's rapid collapse.

In a sometimes acerbic decision that likened MF Global's demise to a "massive train wreck," U.S. District Judge Victor Marrero in Manhattan rejected the defendants' contention that the company's Oct. 31, 2011, bankruptcy was beyond their control, and not the product of securities fraud.

"Defendants seem convinced that no one named in this lawsuit could possibly have done anything wrong," Marrero said in a 105-page decision. "Defendants' contentions would suggest that ... perhaps the debacle must have been the fateful work of supernatural forces, or else that the explanation for a spectacular multi-billion dollar crash of a global corporate giant is simply that 'stuff happens.'"

Former stockholders and bondholders led by the Virginia Retirement System and the province of Alberta, Canada, accused MF Global of inflating its ability to manage risk, obscuring the risks of its big bet on European sovereign debt, and improperly accounting for deferred tax assets.

While not ruling on the merits, Marrero said the claims carried "an added measure of reliability and plausibility" by drawing from investigations by government regulators and Congressional committees into MF Global's bankruptcy, one of the 10 largest in U.S. history.

Other defendants included former MF Global chief financial officers J. Randy MacDonald and Henri Steenkamp, and seven former independent directors.

The plaintiffs also sued 13 banks and financial institutions, including JPMorgan Chase & Co and Goldman Sachs Group Inc, that helped MF Global raise money by selling stock and bonds.


DIFFERENT RECOVERIES FOR INVESTORS, CUSTOMERS

Corzine is a former governor and U.S. senator from New Jersey, and former co-chairman of Goldman.

He had argued that the allegations suggested that at most he had mismanaged MF Global, was too optimistic, or failed to predict a liquidity squeeze, not that he violated the law.

Corzine also said his ownership of 441,960 MF Global shares, including some bought as late as August 2011, showed he had no motive to commit fraud.

Andrew Levander, a partner at the Dechert law firm who represents Corzine, did not immediately respond to requests for comment.

Lawyers for MacDonald and Steenkamp, and a JPMorgan spokesman, did not immediately respond to similar requests. Goldman spokesman Michael DuVally declined to comment.

MF Global's collapse left about $1.6 billion of customer funds missing.

But on Nov. 5, James Giddens, the trustee unwinding its brokerage unit, won bankruptcy court approval for a plan to close the remaining shortfalls, and fully repay thousands of former customers.

The investor lawsuit, which seeks class-action status, covers investors in MF Global common stock, convertible bonds and senior notes between May 20, 2010, and Nov. 21, 2011.

"It's a good decision, and hopefully will allow us to obtain some recoveries for the class," said Salvatore Graziano, a partner at Bernstein Litowitz Berger & Grossmann representing the investors. "Unlike the customers, the investors here have received no recovery whatsoever."

The law firm Labaton Sucharow also represents investors in the case.

MF Global's demise has also led to civil lawsuits against Corzine by the Commodity Futures Trading Commission and by Louis Freeh, the trustee who wound down the parent company.

The U.S. Department of Justice also opened a probe into MF Global. No criminal charges have been brought.

The case is DeAngelis et al v. Corzine et al, U.S. District Court, Southern District of New York, No. 11-07866.


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## LAM (Nov 13, 2013)

all those bankers with their ivy league finance degrees and educations and not a single fucking one of them has a clue?

right...who actually believes that bullshit?


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## Gregzs (Jan 7, 2017)

Corzine in $5 million settlement with US CFTC over MF Global collapse

http://www.reuters.com/article/us-mfglobal-corzine-idUSKBN14P251

Jon Corzine, former New Jersey governor and Goldman Sachs (GS.N) co-chairman, will pay a $5 million civil fine to settle a U.S. regulator's lawsuit over the 2011 collapse of his commodity brokerage, MF Global Holdings Ltd.

Thursday's accord with the U.S. Commodity Futures Trading Commission resolves the last piece of litigation against Corzine over MF Global's rapid descent into bankruptcy on Oct. 31, 2011, as an estimated $1.6 billion of customer money went missing.
The agreement, which has been approved by a federal judge, bars Corzine from ever working for a futures commission merchant or registering with the CFTC. He also cannot ask insurers to cover the fine.

"I am pleased to have reached this settlement," Corzine, who turned 70 on Jan. 1, said in a statement. "As the CEO of MF Global in 2011, I have accepted responsibility for its failure, and I deeply regret the impact it had on customers, employees, shareholders and others."


Andrew Levander, Corzine's lawyer, noted that none of the criminal and civil probes into MF Global's demise led to charges that Corzine engaged in intentional misconduct or fraud.

In a related settlement, Edith O'Brien, MF Global's former assistant treasurer, agreed to pay a $500,000 civil fine and accept an 18-month industry ban to resolve claims that she "aided and abetted" the misuse of customer funds.
O'Brien's lawyer, Christopher Barber, declined to comment.

The CFTC said MF Global improperly used nearly $1 billion of customer funds to shore up liquidity during the last week of October 2011, rather than keep the funds separate.

This commingling occurred as margin calls, credit rating downgrades and Corzine's big wager on European sovereign debt left customers and investors increasingly worried about the New York-based company's survival.

The CFTC said Corzine failed to properly supervise employees handling customer funds, while O'Brien authorized the illegal transfer of customer funds to MF Global accounts as the specter of bankruptcy loomed.

Customers were fully repaid in 2014.

Corzine and other former MF Global executives last year reached a $132 million settlement with a trustee liquidating the company on behalf of creditors.

A year earlier, executives reached a $64.5 million settlement of separate investor litigation.
Portions of the earlier payouts were covered by insurance.

Corzine, a Democrat, is also a former U.S. senator, and now manages his own money.

He said he plans to focus on "issues that have always been important in my life: my family, community and philanthropic causes, and markets."


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## solidassears (Jan 8, 2017)

Gregzs said:


> Corzine in $5 million settlement with US CFTC over MF Global collapse
> 
> http://www.reuters.com/article/us-mfglobal-corzine-idUSKBN14P251
> 
> ...



Bull Shit! Customers were not fully repaid. I lost $180k from that assholes actions. I had a bunch of oil futures and they were ripe to sell, I would have made a bundle, but when I tried to sell my account was frozen and I lost my ass as the futures price fell. When my account was re-opened I got the principal I had not lost back  and I had lost $180k of principal.


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## SheriV (Jan 9, 2017)

solidassears said:


> Bull Shit! Customers were not fully repaid. I lost $180k from that assholes actions. I had a bunch of oil futures and they were ripe to sell, I would have made a bundle, but when I tried to sell my account was frozen and I lost my ass as the futures price fell. When my account was re-opened I got the principal I had not lost back  and I had lost $180k of principal.




.
That's horrible


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## Gregzs (Mar 24, 2017)

PwC settles with MF Global over Corzine brokerage's collapse

http://www.reuters.com/article/us-mf-global-hldg-pricewaterhouse-idUSKBN16U1QZ

PricewaterhouseCoopers LLP has settled a $3 billion negligence lawsuit over the October 2011 collapse of MF Global Holdings Ltd, the futures and commodities brokerage once run by former New Jersey governor Jon Corzine.
Terms were not disclosed, but the malpractice case was "settled to the mutual satisfaction of the parties," representatives for PwC and MF Global's bankruptcy administrator said in separate statements on Thursday.

The accord ends the last major piece of litigation that the administrator, hedge fund founder Nader Tavakoli, has been pursuing on behalf of MF Global creditors.

It also ends a trial that began on March 7 in the U.S. District Court in Manhattan, where several witnesses including Corzine had already testified.
PwC has denied wrongdoing. It blamed Corzine's business strategy and the market's reaction to it for MF Global's demise.

In April 2015, PwC reached a separate $65 million settlement with MF Global investors, but denied wrongdoing there too.
Lawyers for both sides on Thursday declined to comment or were not immediately available for comment.

MF Global filed for Chapter 11 protection on Oct. 31, 2011 as news about Corzine's $6.3 billion wager on European sovereign debt, a surprise tax writedown, and credit rating downgrades fueled worries about its survival.
Investors became upset when MF Global moved the European debt onto its balance sheet on Oct. 25, 2011, after previously discussing it more generally in regulatory filings.

The administrator faulted PwC over the accounting for "repurchase-to-maturity" transactions through which Corzine bet on the European debt, and for changing its advice on deferred tax assets, causing the writedown.

Corzine, also a former New Jersey senator and Goldman Sachs (GS.N) co-chairman, testified that he had trusted PwC because of its strong reputation. He also called the European debt a low-risk investment that ultimately paid in full.

In January, Corzine agreed to pay $5 million and accept a lifetime U.S. Commodity Futures Trading Commission ban to settle claims by that agency.
Corzine, 70, now runs an office focused on charitable giving and his family's investments, and has taught at Fairleigh Dickinson University.


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