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Title: Regulators Investigating Democrat Ex-NJ Gov Corzine's MF Global for Missing Money
Source:
NY Times
URL Source: http://dealbook.nytimes.com/2011/10 ... rs-investigating-mf-global/?hp
Published: Nov 1, 2011
Author: BEN PROTESS, MICHAEL J. DE LA MERCED & S
Post Date: 2011-11-01 08:39:18 by Happy Quanzaa
Keywords: Corzine, Corruptocratic Party
Views: 3881
Comments: 17
9:55 p.m. | Updated Federal regulators have discovered that hundreds of millions of dollars in customer money has gone missing from MF Global in recent days, prompting an investigation into the brokerage firm, which is run by Jon S. Corzine, the former New Jersey governor, several people briefed on the matter said on Monday. The recognition that money was missing scuttled at the 11th hour an agreement to sell a major part of MF Global to a rival brokerage firm. MF Global had staked its survival on completing the deal. Instead, the New York-based firm filed for bankruptcy on Monday. Regulators are examining whether MF Global diverted some customer funds to support its own trades as the firm teetered on the brink of collapse. The discovery that money could not be located might simply reflect sloppy internal controls at MF Global. It is still unclear where the money went. At first, as much as $950 million was believed to be missing, but as the firm sorted through its bankruptcy, that figure fell to less than $700 million by late Monday, the people briefed on the matter said. Additional funds are expected to trickle in over the coming days. But the investigation, which is in its earliest stages, may uncover something more intentional and troubling. In any case, what led to the unaccounted-for cash could violate a tenet of Wall Street regulation: Customers’ funds must be kept separate from company money. One of the basic duties of any brokerage firm is to keep track of customer accounts on a daily basis. Neither MF Global nor Mr. Corzine has been accused of any wrongdoing. Lawyers for MF Global did not respond to requests for comment. Now, the inquiry threatens to tarnish further the reputation of Mr. Corzine, the former Goldman Sachs executive who had sought to revive his Wall Street career last year just a few months after being defeated for re-election as New Jersey’s governor. When he arrived at MF Global — after more than a decade in politics, including serving as a Democratic United States senator from New Jersey — Mr. Corzine sought to bolster profits by increasing the number of bets the firm made using its own capital. It was a strategy born of his own experience at Goldman, where he rose through the ranks by building out the investment bank’s formidable United States government bond trading arm. One of his hallmark traits, according to the 1999 book “Goldman Sachs: The Culture of Success,” by Lisa Endlich, was his willingness to tolerate losses if the theory behind the trades was well thought out. He made a similar wager at MF Global in buying up big holdings of debt from Spain, Italy, Portugal, Belgium and Ireland at a discount. Once Europe had solved its fiscal problems, those bonds would be very profitable. But when that bet came to light in a regulatory filing, it set off alarms on Wall Street. While the bonds themselves have lost little value and mature in less than a year, MF Global was seen as having taken on an enormous amount of risk with little room for error given its size. By Friday evening, MF Global was under pressure to put up more money to support its trading positions, threatening to drain the firm’s remaining cash. The collapse of MF Global underscores the extent of investor anxiety over Europe’s debt crisis. Other financial institutions have been buffeted in recent months because of their holdings of debt issued by weak European countries. The concerns about MF Global’s exposure to Europe prompted two ratings agencies to cut their ratings on the firm to junk last week. The firm played down the effect of the ratings, saying, “We believe that it bears no implications for our clients or the strategic direction of MF Global.” Even by Sunday evening, MF Global thought it had averted its demise after a disastrous week. Over five days, the firm lost more than 67 percent of its market value and was downgraded to junk status, which prompted investor desertions and raised borrowing costs. Mr. Corzine and his advisers frantically called nearly every major Wall Street player, hoping to sell at least some of the firm in a bid for survival. On Friday, the asset manager BlackRock was hired to help MF Global wind down its balance sheet, which included efforts to sell its holdings of European debt. BlackRock was able to value the portfolio, but did not have time to find a buyer for it given the other obstacles MF Global faced, according to people close to the talks. By Saturday, Jefferies & Company became the lead bidder to buy large portions of MF Global, before backing out late in the day. On Sunday, a rival firm, Interactive Brokers, emerged as the new favorite. But the Connecticut-based firm coveted only MF Global’s futures and securities customers. While MF Global was resigned to putting its parent company into bankruptcy, Interactive Brokers was also willing to help prop up other MF Global units, including a British affiliate. By late Sunday evening, an embattled MF Global had all but signed a deal with Interactive Brokers. The acquisition would have mirrored what Lehman Brothers did in 2008, when its parent filed for bankruptcy but Barclays of Britain bought some of its assets. But in the middle of the night, as Interactive Brokers investigated MF Global’s customer accounts, the potential buyer discovered a serious obstacle: Some of the customer money was missing, according to people close to the discussions. The realization alarmed Interactive Brokers, which then abandoned the deal. Later on Monday, when explaining to regulators why the deal had fallen apart, MF Global disclosed the concerns over the missing money, according to a joint statement issued by the Commodity Futures Trading Commission and the Securities and Exchange Commission. Regulators, however, first suspected a potential shortfall days ago as they gathered at MF Global’s Midtown Manhattan headquarters, the people briefed on the matter said. It is not uncommon for some funds to be unaccounted for when a financial firm fails, but the magnitude in the case of MF Global was unnerving. For now, there is confusion surrounding the missing MF Global funds. It is likely, one person briefed on the matter said, that some of the money may be “stuck in the system” as banks holding the customer funds hesitated last week to send MF Global the money. But the firm has yet to produce evidence that all of the $600 million or $700 million outstanding is deposited with the banks, according to the people briefed on the matter. Regulators are looking into whether the customer funds were misallocated. With the deal with Interactive Brokers dashed, MF Global was hanging in limbo for several hours before it filed for bankruptcy. The Federal Reserve Bank of New York and a number of exchanges said they had suspended MF Global from doing new business with them. It was not the first time regulators expressed concerns about MF Global. MF Global confirmed on Monday that the Commodity Futures Trading Commission and the S.E.C. — had “expressed their grave concerns” about the firm’s viability. By midmorning on Monday, the firm filed for bankruptcy. Azam Ahmed contributed reporting.
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#1. To: Happy Quanzaa (#0)
Regulators Investigating Goldman Sachs Bankster Ex-NJ Gov Corzine's MF Global for Missing Money" FIFY
Another arrest. After Madoff? IF Corzine was a Hindu/Muslim he'd be in jail already....LMFAO
Wondering when Amerika 'News' thinks the Red Markets are news. When the Top.1% think they have their new hedges in place of course....;}
The Yahoo Finance section title: MF Global meltdown: Millions 'gone missing' Nothing about hundreds of millions missing in the title. They do the soft shoe on bad news all the time.
It's in seg...they'll "find" it... Maybe...
I'll believe that a corporation is a person 1 second after Texas executes one...
No. They won't. Cause like all ponzi's it's not hidden somewhere. Alot of folks are wondering where their millions are this AM. en.wikipedia.org/wiki/Man_Group "The physical commodity exchanges, where much of the world’s trading was done were also changing significantly. Increasingly, throughout the 1970s, financial instruments were traded, bringing new participants and increased volumes. Man was a broker to some of these traders, many of whom were trying to use the markets to make a return on price movements, rather than simply attempting to protect themselves against the uncertainties inherent to trading. Man became a partner in 1983 with one of these new money management firms, Mint, which was based in New Jersey. This venture prompted a move into financial services, which the company increasingly concentrated on. In 2000, the commodity trading companies went private[8] with the result that Man became exclusively a financial services company. The demerger and flotation of its brokerage business renamed as MF Global on the New York stock exchange in 2007[9] moved the company into its present form, as an investment management business, within the alternative (sometimes called “non-traditional”) fund management industry, principally hedge funds. According to Institutional Investor magazine, its hedge funds have a combined $54.2 billion in assets under management. [10]" Nothing but a Glorified Hedge Fund. And won't be the last to implode. See Sovereign Credit Default Swaps ruled Null & Void. Soon to be followed by the $600 Trillion rest of them. There's a reason that you never see the word "InsuranCe" in a CDS contract.....;}
BTW: Note the dates '2000' & '2007'. Could the Man Group have timed this any better? Like they knew something....;}
Yet our old friend GLG broadly advertises a senior Verizon manager as a key thoughtleader in the GLG network. Andrew Malis is the Director of Packet Network Engineering at Verizon Communications (I linked to his LinkedIn profile -- these days, LinkedIn looks a lot like GLG thanks to deals like this. Reid, got your lawers ready to go?). Malis also heads a key telecom industry standards determination board, as President and Chairman of the Board at IP/MPLS Forum. Now, Mr. Malis may indeed only be providing 5,000 foot commentary on the telecom landscape. But isn't it remotely possible that his insights might be colored by the fact that he is privy to secret information inside a telecom behemoth that can single-handedly swing the fortunes (and share prices) of dozens of other publicly traded companies? Or what if Mr. Malis mistakenly reveals to a GLG caller that, indeed, Verizon does have a deal planned with Apple to launch a new iPhone? What value would this be to a hedge fund manager, even if the revelation was the result of a slip? Could such tantalizing prospects in fact be the primary reason that hedge fund managers have made Mr. Malis a Top 5% selection in the GLG network? "-ZH Aug 2009 # Man Group - Wikipedia, the free encyclopedia en.wikipedia.org/wiki/Man_GroupCached - Similar You +1'd this publicly. Undo The demerger and flotation of its brokerage business renamed as MF Global on the ... GLG's top executives, Noam Gottesman, Emmanuel Roman and Pierre ... History - Madoff fraud - Business model - Mergers and acquisitions Where MF Global Went, Will Man Follow? | GPlus.com https://www.gplus.com/.../where-mf-global-went-will-man-follow-29... You +1'd this publicly. Undo Nov 17, 2008 – Basic risk controls at MF Global were found significantly wanting. ... through two distinct yet complementary offerings: GLG Research and G+. ... Afucking rat's nest....8D
I was being sarcastic. They were using seg funds as risk capital...a no-no under 1.25 and 15-c...
I'll believe that a corporation is a person 1 second after Texas executes one...
They were using seg funds as risk capital...a no-no under 1.25 and 15-c... ;} Do you know where your ETF account is? The Ex Guv of NJ, the Ex CEO of Goldman has just been accused by Phil What's his name of Comingling.... MAdoff got an extra cot? "$700 million? O here it is. The Cayman/Guernsey Islands account. You only had to ask."....8D
BNP Paribas....wonder how much bizness they did with MFGlobal. And WTF is MFGlobal doing owing CNBC $874, 000?
My guess is that they were using it to cover "cash collateral requests" better known as: MARGIN CALL, GENTLEMEN
I'll believe that a corporation is a person 1 second after Texas executes one...
Advertising... Easy one...
I'll believe that a corporation is a person 1 second after Texas executes one...
Ok. I guess MF was ubiquitous, cause I never remember seeing it. The Guv's Limo Driver does Safari per Business Week:
8D But here's what got me (& others;). CNBC is the 3rd (or 7th?) largest creditor in line? Really? "Any public discussion of the losers from MF’s meltdown is necessarily incomplete and focused on the relatively trivial (shareholders, preferred stock, Jefferies, media companies). The people facing $37 billion of uncertainly collateralized exposure are still mostly opaque. There are excellent corporate finance reasons for MF’s structure: if they could issue unsecured debt at a lightly regulated (but investment grade) public parent, while keeping their trading liabilities in regulated and private subs, they should – and did. (So does everyone else in the industry.) But the result is not only a more efficient capital structure; it’s also much greater privacy. Which is nice for MF in good times, and is nice for its counterparties now: no one has a definitive list of whose money is tied up in MF’s filing, so there’s not likely to be a near-term run on them. But if you like transparency in your capital markets, it’s less encouraging. And while MF’s demise is unlikely to do much harm to the broader markets, the disclosure of the next Lehman is going to look much the same. * There may be some parent company secured debt, too. The petition omits secured debt “unless the value of the collateral is such that the unsecured deficiency places the creditor among the holders of the 50 largest unsecured claims.” Given what markets have done to MF’s positions, it would be surprising if there are no secured creditors with more than a $10k deficiency." dealbreaker.com/2011/10/d...seventh-largest-creditor/ "And while MF’s demise is unlikely to do much harm to the broader markets" And I don't believe that MFGlobal's bk and the CAC/DAX down over 5% the next day are coinydinks...;}
After Madoff? IF Corzine was a Hindu/Muslim he'd be in jail already....LMFAO Yes, you're right.... That said, your fellow Commie/Marxists and Limousine Liberals will defend Dem Corzine TO. THE. TEETH. What say you about their terrible double-standard?
If they were using their teeth, Corzine would not have filed BK. That's the backroom manager's excuse for Commingling Customer/Corp funds. One. Or the Other....;}
Regulators Investigating Democrat Ex-NJ Gov Corzine's MF Global for Missing Money
#2. To: All (#1)
#3. To: Happy Quanzaa (#0)
#4. To: mcgowanjm (#2)
#5. To: Fred Mertz (#4)
#6. To: war (#5)
(Edited)
#7. To: All (#6)
#8. To: All (#7)
#9. To: mcgowanjm (#6)
#10. To: war (#9)
I was being sarcastic.
#11. To: war, All (#10)
#12. To: mcgowanjm (#10)
#13. To: mcgowanjm (#11)
And WTF is MFGlobal doing owing CNBC $874, 000?
#14. To: war (#13)
#15. To: war (#12)
(Edited)
#16. To: mcgowanjm (#2)
Another arrest.
#17. To: Liberator (#16)
will defend Dem Corzine TO. THE. TEETH. What say you about their terrible double-standard?
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