Anyone who is familiar with the markets and has a shred of decency is absolutely appalled by this outrageous theft from customer accounts and breach of fiduciary trust. And the wall of silence from the financial system and the Obama Administration is deafening.
If this stands, then there will be more abuse of funds and selective defaults to come, especially for any non-US citizens with assets in the US financial system that involve commodities and precious metals.
Title and ownership mean nothing in an unfolding kleptocracy. If one does ill and profits, then so shall they all.
The Economic Times of India
MF Global activity 'suspicious': CFTC official
15 Nov, 2011, 10.15PM IST, Reuters
A US futures regulator said on Tuesday that activity leading up to the bankruptcy of brokerage MF Global appears to be "either nefarious or illegal."
Bart Chilton, a Democratic commissioner at the US Commodity Futures Trading Commission, said on CNBC that he could not comment specifically on the agency's investigation, but that the activity "looks suspicious as heck."
"It's either nefarious or illegal in my personal opinion," he said.
An MF Global representative was not immediately available for comment.
Neither MF Global nor its former head Jon Corzine has been charged with any wrongdoing.
MF Global filed for bankruptcy protection on Oct. 31 after concerns over risky bets on European sovereign debt sped its collapse. The CFTC and other regulators are still searching for roughly $600 million in customer account funds.
When asked about whether customers will get their money back, Chilton said: "It depends on what is there."
Meanwhile, it was reported that MF Global Holdings Ltd may have faced a shortfall in customer funds even as far back as Oct. 27, four days before the US futures brokerage filed for bankruptcy protection.
Just hours before the bankruptcy filing, MF Global executives told regulators they believed a shortfall had somehow occurred, possibly starting on Oct. 27 or Oct. 28, it was reported.
Customer funds were found to be short by about $200 million on Oct. 27.
The CFTC is also examining whether hundreds of millions of dollars in customer accounts were transferred at MF Global during the week that began Oct. 24, the paper said.
According to CFTC, the transfers were not recorded in the firm's general ledger reviewed by exchange officials, the paper said.
MF Global filed for bankruptcy after its bets on European sovereign debt unnerved investors, credit agencies, customers and counterparties, causing liquidity to disappear.
Thereafter, regulators are seeking to find some $600 million missing from the company's customer accounts.
A spokesman for MF Global said last week that the firm is cooperating with regulators and the bankruptcy trustee trying to find the missing money, according to the Journal.
MF Global could not immediately be reached for comment by Reuters outside regular US business hours.
