14 December 2011

CFTC's Sommers: "We Know Where the Customer Money Went"

Ok, Jill, spill.  Don't bogart the 411 and go all Federal Reserve on us.

Where did it go, and when do the customers get it back?

Or do we have to wait until the dirty laundry comes out of the spin cycle?

And how come Bart Chilton says you DON'T know where all the money went?

Oh and if you find that missing money, can you also check and see where the investigation into manipulation in the silver market went? It seems especially timely this week.

Here is my guess.

Reuters India
Regulators know where MF Global funds went
By Christopher Doering
Thu Dec 15, 2011 7:05am IST

(Reuters) - U.S. regulators now have a more complete picture of money transfers in the final days of bankrupt brokerage MF Global, but must sort out which transactions were legitimate before more money can be released to customers, a top official told Reuters on Wednesday.

Jill Sommers, who is heading the Commodity Futures Trading Commission's review of MF Global, said regulators "are far enough along the trail" that they know where the money went.

"Now it's just finding out which ones of those transactions are legitimate and which ones of them are illegitimate," Sommers said.

The CFTC and the trustee liquidating the firm are under intense pressure from lawmakers and customers to provide answers about what happened to hundreds of millions of dollars in customer money that went missing as the firm collapsed.

MF Global officials, including former Chief Executive Jon Corzine, have told lawmakers they simply do not know where the money is, and deny authorizing any misuse of customer money.

"We certainly don't want to lead anyone to believe we don't know what happened. We do know, and we see where all the transactions went," said Sommers, a Republican commissioner, in an interview on Wednesday.

She declined to reveal details on the fund transfers until investigators have determined the purpose of all the transactions. Sommers could not estimate when regulators will complete their investigation, but said "really good progress" is being made.

Fellow CFTC Commissioner Bart Chilton, a Democrat, tempered expectations. Chilton said in a statement after Sommers' remarks were published that a thorough accounting of all customer funds remains a work in progress.

"Based upon the most up-to-date information available, I do not have confidence that we know where all the money went," Chilton said.   (Hello?  Are these guys playing for the same team? Did Bart forget to pay for a premium subscription to intra-office memos? - Jesse)

MF Global filed for bankruptcy on October 31 after it was forced to reveal that it had made a $6.3 billion bet on European sovereign debt, spooking investors and customers.

The ensuing search for missing money has sent reverberations through the farm belt and trading floors, and has attracted the attention of the FBI and federal prosecutors.

A trustee liquidating the firm has estimated the shortfall could be as high as $1.2 billion...

Chicago Sun-Times
Regulator: We know where MF Global cash went
By David Roeder
December 14, 2011 6:18PM

The investigation into the collapse of MF Global and its estimated $1.2 billion shortfall has narrowed to a key question: Were any transfers of customer money the firm conducted in its waning days legitimate?

The main U.S. regulator of the brokerage knows where the missing money went and now is trying to determine if the transfers were proper, a top official told the Reuters news agency Wednesday.

Jill Sommers, a member of the Commodity Futures Trading Commission who is heading the agency’s probe, told Reuters, “We are far enough along the trail that we know where all the money went.”

She also was reported to say, “We certainly don’t want anyone to believe that we don’t know what happened. We do know, and we see where all the transactions went.”

Her comments came one day after surprise testimony from the executive chairman of CME Group Inc. provided evidence that Jon Corzine, former MF Global chairman, knew about the transfers from customer accounts. In his own testimony, Corzine has denied ordering anyone to “misuse” customer money....