MF Global.......

[Slimprofits]

Re: MF Global.......

http://dealbook.nytimes.com/2011/11/...ler-employees/

The court-appointed trustee overseeing the liquidation of MF Global’s broker-dealer unit laid off 1,066 employees on Friday, keeping only a skeleton staff to assist in the dissolution of the business.

The trustee, James W. Giddens, will rehire 150 to 200 employees to help wind down the broker-dealer and process bankruptcy claims. Not all of these people will be among the staff members who were laid off on Friday, a person briefed on the matter told DealBook.

Some of those who will be hired had left the firm weeks ago, said this person, who spoke on condition of anonymity.

[don]

Re: MF Global.......

Unlike mushrooms, suspicions are growing but slowly . . .

By BEN PROTESS and AZAM AHMED

John Zich/Bloomberg NewsScott O’Malia of the federal commodity futures regulator.
Nearly three weeks after $600 million in customer money went missing from MF Global, the search for the cash has been hampered by the bankrupt brokerage firm’s sloppy record-keeping, an increasingly worrisome situation that has left regulators frustrated and customers in the lurch.

The round-the-clock effort has consumed an alphabet soup of federal regulators and criminal investigators, with lawyers sleeping at open desks and each agency commandeering a different conference room at the firm’s offices. But as authorities comb through some 38,000 customer accounts, they are growing more suspicious about what went wrong at MF Global, the commodities powerhouse once run by Jon S. Corzine, the former Democratic governor of New Jersey.

“The lost money is sort of like a lost child,” said Bart Chilton, a Democratic member of the Commodity Futures Trading Commission. “Every day that passes is more and more concerning, and there’s less and less hope.”

At a bankruptcy hearing on Wednesday, a lawyer for the trustee overseeing the liquidation of the brokerage house would not speculate on the matter, acknowledging simply that the money was still missing.

John Zich/Bloomberg NewsScott O’Malia of the federal commodity futures regulator.
After MF Global filed for bankruptcy in late October, hundreds of examiners descended on the firm’s New York and Chicago offices. Since then, they have been poring over records, verifying customer accounts and interrogating the skeleton staff that remains.

The futures commission is heading the search in the futures business for the missing $600 million, armed with at least 15 accounting and enforcement staff members on site in New York. The Securities and Exchange Commission is focusing on a separate MF Global unit, as workers report back to bosses in Washington in twice-daily conference calls. Federal prosecutors in New York and Chicago have issued subpoenas, according to one person with knowledge of the matter who spoke on the condition of anonymity.

As part of the effort, the Federal Bureau of Investigation has taken the lead in the interviews of former employees who can explain MF Global’s inner workings. The federal authorities have also taken control of an off-site emergency recovery system, where e-mail and phone records from MF Global were stored, said two people who also spoke on condition of anonymity.

Authorities are particularly focused on the final days of MF Global. In the run-up to the bankruptcy filing, clients withdrew their assets, trading partners closed out trades and others demanded more collateral.

Amid the flurry of activity, MF Global failed to register all the transactions in its books. Regulators must now reconstruct the ledger, dollar by dollar.

“The volume and pace of trading activity that occurs at a brokerage firm undergoing a crisis of confidence makes it almost impossible to keep up,” said David Pauker, managing director at Goldin Associates, who oversaw the restructuring of Refco, another failed brokerage. “A large backlog inevitably results.”

As regulators carve out distinct parts of the investigation, James Giddens, the trustee, is taking a broader perspective. Called in shortly after the firm filed for bankruptcy, Mr. Giddens, who is charged with returning customers’ funds, quickly hired the accounting firm Deloitte to create a claims process for customers and Ernst & Young to scour the firm’s books. All told, the trustee has amassed a team of more than 200 to unwind the firm, in addition to the roughly 200 MF Global employees who were kept on the job.

The team is trying to understand how the firm operated, which entails interviewing staff members and reviewing of thousands of transactions.

It has been grueling. One lawyer for the trustee returned from his honeymoon and worked a 21-hour day. Another lawyer held a conference call from the emergency room of a hospital where a close relative was undergoing an operation. A group dispatched to Chicago had no time to pack, buying clothes when they arrived.

So far, the trustee has transferred the holdings of about 15,000 MF Global customers to new brokers, along with some of the collateral backing their trades. On Tuesday, Mr. Giddens said he was seeking approval to return 60 percent of the money sitting in separate cash accounts, a move the Commodity Futures Trading Commission supports. A New York bankruptcy court judge is to hear the request Thursday morning.

But many customers are still in the dark about their money. Since the firm’s collapse, customers like farmers and small-business owners are struggling to meet their financial obligations.

“The inability of MF Global customers as a whole to access their funds has affected trading in futures markets, and has shaken public confidence in our customer protection regime,” Scott D. O’Malia, a Republican member of the futures commission, said in a statement on Wednesday. “To assure the public that MF Global is an isolated incident, the commission should immediately take action.” He said the agency should enact new transparency measures and keep a closer eye on futures firms.

At the bankruptcy hearing on Wednesday at a federal court in Lower Manhattan, there were more questions than answers. Judge Martin Glenn asked a lawyer for the trustee if he knew whether customer money had been mingled with company cash, a major violation of Wall Street rules and a potential explanation for the shortfall.

The trustee’s lawyer, James Kobak of Hughes Hubbard & Reed, replied: “I don’t think anybody knows the answer.”

http://dealbook.nytimes.com/2011/11/...%20Lost&st=cse

[doom&gloom]

Re: MF Global.......

and where the F is Corzine in all this? His firm, where is his cell?

[don]

Re: MF Global.......

math that's not too hard to figure . . .

NEW YORK (Reuters) - Three weeks after MF Global's collapsed, furious former customers are still fighting for access to billions of dollars as they question why as much as two-thirds of their money is still stuck.

While authorities have touted the fact that they are returning 60 percent of the collateral and cash that had been frozen in the wake of the broker's October 31 bankruptcy, a closer look shows that in fact only about 40 percent of customers' total funds have been authorized for release so far.

The remainder, more than $3 billion, ostensibly remains on hand to cover a shortfall originally estimated by MF Global to regulators at just $600 million.

Courting Disaster?

While customers were initially outraged at the thought that MF Global had tapped into their segregated funds, that rage has increasingly been targeted at the trustee and the bankruptcy court for the handling of an unprecedented collapse.

"The (bankruptcy) Trustee is creating new protected classes within a pool of segregated customer assets," said John Roe, a spokesman for the Commodity Customer Coalition, a group lobbying for the speedy release of funds representing 7,000 former MF Global customers.

"(This) has dangerous implications in future Future Commission Merchant (FCM) bankruptcies. How is this in the interests of customers, FCMs, bankruptcy creditors or the system as a whole?"

http://ca.news.yahoo.com/insight-ang...190836206.html

[doom&gloom]

Re: MF Global.......

math that's not too hard to figure . . .

NEW YORK (Reuters) - Three weeks after MF Global's collapsed, furious former customers are still fighting for access to billions of dollars as they question why as much as two-thirds of their money is still stuck.

While authorities have touted the fact that they are returning 60 percent of the collateral and cash that had been frozen in the wake of the broker's October 31 bankruptcy, a closer look shows that in fact only about 40 percent of customers' total funds have been authorized for release so far.

The remainder, more than $3 billion, ostensibly remains on hand to cover a shortfall originally estimated by MF Global to regulators at just $600 million.

Courting Disaster?

While customers were initially outraged at the thought that MF Global had tapped into their segregated funds, that rage has increasingly been targeted at the trustee and the bankruptcy court for the handling of an unprecedented collapse.

"The (bankruptcy) Trustee is creating new protected classes within a pool of segregated customer assets," said John Roe, a spokesman for the Commodity Customer Coalition, a group lobbying for the speedy release of funds representing 7,000 former MF Global customers.

"(This) has dangerous implications in future Future Commission Merchant (FCM) bankruptcies. How is this in the interests of customers, FCMs, bankruptcy creditors or the system as a whole?"

http://ca.news.yahoo.com/insight-ang...190836206.html

first the investors get MF'd by the firm, now the trustee wants to MF them as well.

But WAIT, there's MORE...

http://www.reuters.com/article/2011/...7AK0RJ20111121

NEW YORK, Nov 21 (Reuters) - The apparent shortfall of customer funds at MF
Global Holdings Ltd's broker-dealer unit may be around $1.2 billion, about
double initial estimates from regulators, the trustee liquidating the company
said on Monday.

The amount of money MF Global should have segregated for customers may be
short by "$1.2 billion or more," trustee James Giddens said in a statement. He
added that the figure could still change.

Obummer let all the banksters skate, what are the odds Corzine skates as well?

[lektrode]

Re: MF Global.......

...Obummer let all the banksters skate, what are the odds Corzine skates as well?

i'd say its lookin 50/50: heads he wins and tails We Lose.

but hey, apparently the bookies have already picked the favorite:

http://www.1800-sports.com/democrati...ing-odds.shtml

Winning Candidate			Moneyline
Barack Obama			1/25
Hillary Clinton			12/1
Joseph Biden			25/1
Al Gore			50/1
Mark Warner			50/1

http://www.1800-sports.com/republica...ing-odds.shtml

Republican Nominee			Moneyline
Rick Perry			7/5
Mitt Romney			2/1
Michelle Bachmann			7/1
Jon Hunstman			10/1
Sarah Palin			10/1
Ron Paul			20/1
Rudy Giuliani			30/1
Herman Cain			40/1
Newt Gingrich			40/1
Gary Johnson			50/1
Rick Santorum			50/1

Winning Party			Moneyline
Democratic Party			-150
Republican Party			+120

[don]

Re: MF Global.......

no surprises here . . .

William J. Clinton (left) and Jon S. Corzine

A former MF Global employee accused former president William J. Clinton of collecting $50,000 per month through his Teneo advisory firm in the months before the brokerage careened towards its Halloween filing for Chapter 11 bankruptcy.

Teneo was hired by MF Global’s former CEO Jon S. Corzine to improve his image and to enhance his connections with Clinton’s political family, said the employee, who asked that his name be withheld because he feared retribution.


Teneo is a dual-track company with one side devoted to merchant and investment banking and the other side set up to provide image and strategy consulting services.

Clinton is the chairman of the company’s advisory board. His duties and compensation have not been released. The other member of the board is former British prime minister Tony Blair.

http://www.humanevents.com/article.php?id=47938

[sunskyfan]

Re: MF Global.......

I would say that you are looking at this the wrong way. IMHO .... MF is an indication of a more systemic failure happening. Europe can't get its sh*t together. The Fed et al steps in last week to bail out somebody "over there" it appears. MF is perhaps the "Bear-Stearns" of this progression. MF will not be the cause but it is a warning sign.

[doom&gloom]

Re: MF Global.......

just part of the grand MF'ing fascist kleptocracy DC has become...

[don]

Re: MF Global.......

in related news . . .

Much like Bill, Tony has been a fiscal phenomenon since leaving Downing Street -
how do they do it . . .

TONY Blair has formed his own finance boutique in London to offer investment services to global funds and the super-rich.

His Mayfair-based company has recruited senior financiers and has been authorised by the Financial Services Authority. It will effectively be a fledgling investment bank.

News of the former British prime minister's diversification into finance will help to explain how he can afford to give away the estimated 5 million pounds proceeds of his memoirs, A Journey, to the Royal British Legion. His predecessors in Downing Street have relied on their books to provide for their retirement.

Since leaving office in 2007, Blair has amassed a fortune estimated to be in excess of 20 million pounds. He has combined his role as a roving statesman with charitable work and paid advisory roles.

When he first launched the Tony Blair Associates consultancy, he said it would provide "strategic advice on both a commercial and pro-bono basis, on political and economic trends and government reforms". It has provided advice to the Kuwait government and to Mubadala, a sovereign investment fund in the United Arab Emirates.

It is now able to offer a range of financial services to clients. His investment firm is just one of a string of companies -each called either Windrush or Firerush - that he created after leaving No 10.

One of these companies, Firerush Ventures No 3, was registered with the FSA in January this year. There was speculation that the company would manage his own private portfolio, but documents seen by The Sunday Times show that it can offer financial services to clients and will trade as TBA.

The FSA documents state that TBA can "arrange deals in investments" for clients, including shares, unit trusts and government securities. It can provide services to professional customers, including institutional investors or high-wealth individuals with detailed knowledge of investment risks.

Some of Blair's key staff have registered with the FSA, so they are authorised to manage a financial firm or offer services to clients. They include Catherine Rimmer, who worked in the research unit at Downing Street, and Jo Gibbons, a former government adviser who is now Blair's director of corporate affairs. Jonathan Powell, Blair's former chief of staff, who is a managing director at Morgan Stanley, is registered at the FSA for Firerush.

Blair's office also recruited Mark Labovitch last month to be chief operating officer at Firerush. He previously worked at Dresdner Kleinwort, an investment bank, at LongAcre Partners, the corporate finance adviser, and most recently at Mesa Global, the investment banking boutique. He also worked as a director at Independent News & Media, publisher of The Independent.

According to the FSA documents, another recruit is Varun Chandra. He previously worked in mergers and acquisitions for Lehman Brothers, the Wall Street bank which was the biggest victim of the financial crisis when it collapsed in September 2008.

Firerush is authorised to trade across Europe, including the tax havens of Luxembourg, Liechtenstein and Gibraltar. Blair's office declined to comment on whether he would be offering services to clients investing funds offshore.

Blair appeared to have become enamoured with the lifestyle of the rich while in office. He stayed at the homes of Sir Cliff Richard and Robin Gibb, the pop stars, and was a holiday guest of Silvio Berlusconi, the Italian prime minister and tycoon.

Once free of the shackles of being a Labour prime minister, he was able to indulge his tastes. In 2008 the Blairs holidayed with Tom Hanks and Steve Martin in Greece, after an introduction by their mutual friend David Geffen, the Hollywood mogul.

Last summer Blair spent part of a Mediterranean holiday on the yacht of Larry Ellison, the founder of Oracle, the computer giant. He also stayed at a private game reserve in South Africa owned by Sir Richard Branson.

Even before he left office Blair started amassing an extravagant property portfolio. He bought a 3.65 million pound townhouse in Connaught Square in west London and spent 5.6 million pounds on a country house in Buckinghamshire once owned by the actor Sir John Gielgud.

His wife, Cherie, spent more than 250,000 pounds on Georgian and Regency furniture for the 18th-century property.

They also acquired an 800,000 pound mews house next to the Connaught Square property and were able to pay cash for a 1.13 million pound mews house in London for their second son, Nicky.

As well as his private sector work, Blair receives a taxpayer-funded pension of 63,468 pounds a year and an annual 84,000 pounds allowance to run a private office. Last month an embarassing leak disclosed that it costs the taxpayer 6 million pounds a year to pay for Blair's five-strong team of protection officers from Scotland Yard. Their expenses alone added up to more than 250,000 pounds a year as they accompanied him around the world.

Blair's private sector work to date has mainly been in the financial sector, including advisory roles with JP Morgan and Zurich Financial Services. TBA is likely to promote its investment services to funds and wealthy investors. Earlier this year it formed a partnership with Khosla Ventures, the green technology fund owned by Vinod Khosa, the Indian-American venture capitalist.

Accountants say some of the eight Windrush and Firerush companies created by Blair's office enjoy the advantages of corporate tax rates without having to file conventional accounts. The limited partnerships in the network, which include Firerush Ventures No 3, are not obliged to publish accounts .

A spokesman for Blair said TBA had registered with the FSA because its work could potentially come under its remit: "FSA registration is standard procedure for a firm of this type." He added that there was no tax advantage in the structure of Firerush Ventures No 3 and related companies.

http://www.theaustralian.com.au/news...-1225908461998

[don]

Re: MF Global.......

Is this guy credible?

“Comex was ready to default on gold and silver in November, and rather than honor the notices for delivery, JP Morgan stole the funds in the accounts that were calling for delivery…notices for delivery were replaced by stolen accounts.”

The evidence of this according to Jim is that, “JPM increased the amount of silver in their registered vaults by precisely the amount that was suppose to be delivered…JPM effectively averted both a Comex default and a European Sovereign Debt implosion.”

Before closing Jim provided a stark warning, saying, “Several million private accounts may vanish–Brokerage accounts, Pension funds, Mutual funds, they’re all at risk. We are getting into the middle stages of implosion, where I believe the public will not wake up until at least one million private accounts are stolen, and completely vanish.“

Jim Willie

http://bullmarketthinking.com/exclus...ts-are-stolen/

[jiimbergin]

Re: MF Global.......

Is this guy credible?

“Comex was ready to default on gold and silver in November, and rather than honor the notices for delivery, JP Morgan stole the funds in the accounts that were calling for delivery…notices for delivery were replaced by stolen accounts.”

The evidence of this according to Jim is that, “JPM increased the amount of silver in their registered vaults by precisely the amount that was suppose to be delivered…JPM effectively averted both a Comex default and a European Sovereign Debt implosion.”

Before closing Jim provided a stark warning, saying, “Several million private accounts may vanish–Brokerage accounts, Pension funds, Mutual funds, they’re all at risk. We are getting into the middle stages of implosion, where I believe the public will not wake up until at least one million private accounts are stolen, and completely vanish.“

Jim Willie

http://bullmarketthinking.com/exclus...ts-are-stolen/

Jim tends to be a little out there, but he does publish some interesting articles. He had to retract one in the past few months that was obviously taken from an email that was going around. That said, I still do read him.

[charliebrown]

Re: MF Global.......

Can someone who really knows advise us about the safety of brokerage firms.
What can and can't a brokerage do with the cash and securities in a customer's account?
Are there more reputable firms than others?
Is there a difference between owning a money market fund, and having a cash account?

As we reach the end game, I think what has passed for legalese is going to me more and more important.

I have shares of GTU at my brokerage. Are they safe? are they being loaned out behind my back so if a counterparty
fails, they won't be put back. If this is the case should I take physical possesion of the stock certificates and
put them in a safe deposit box? Do physical certs even exist anymore?

[kbird]

Re: MF Global.......

Just to be prudent, I would think it make sense to convert any margin accounts to cash accounts with your brokerage. If it's a margin account, brokerages can use your cash as collateral to fund their business using some scheme called hypothecation. Also, they can lend out your securities. In a non-margin account, they can't do any of this.

There is a difference between owning a money market fund and having a cash account. My understanding is that if you sell your money market fund and go to cash, then the cash is deposited by the brokerage in various money center banks, like Goldman, HSBC, etc.

[don]

Re: MF Global.......

here or under Paulson . . . so many crooks, so few threads . . .

Matt Taibbi





Jon Corzine and Gary Gensler



On the road this week, so apologies for the brief post. (Have a longer thing coming out later this week.) Getting a lot of calls about Jon Corzine and his relationship with Commodity Futures Trading Commission (CFTC) chairman Gary Gensler.

Both Corzine and Gensler worked at Goldman back in the day, and the word is that Corzine personally lobbied Gensler to delay the implementation of new rules that would have helped prevent Corzine from raiding his own clients' funds.

This whole issue smacks of the improper communications between other former Wall Street co-workers like Hank Paulson and Lloyd Blankfein. More and more, it appears that, as a matter of routine, federal regulators like Paulson (in 2008) and, later, Gensler reach out to old friends on Wall Street to negotiate/discuss the timing and the form of various policy changes, bailouts, and other regulatory matters. Inside information seemingly is traded with remarkable casualness.

This is one of those issues where there's no point in calling for more regulations. No matter what laws we have, we can't have regulatory heads breezily chatting about their enforcement plans with former co-workers who have huge financial interests resting upon their decisions. The Paulson case, in which information about the rescue of Fannie and Freddie was casually disclosed to a group of hedge fund chiefs before the public knew about it, was a far worse thing than what Gensler is accused of. Gensler, despite his Goldman pedigree, has generally gotten good reviews from Wall Street reform types, and has demonstrated a willingness to help tighten up abuses in the derivatives and commodities markets (including walking back deregulatory actions in the derivatives world that he himself had a role in creating back in the Clinton days). But this business with Corzine will likely be a black eye for him, and rightly so.

But the overall problem, of regulators keeping up their chummy, chatty relationships with Wall Street guys as they make market-altering regulatory decisions, appears to be epidemic. Again, this is an issue where new regulations won't help – we just need different people in charge, people with at least some grasp of the whole propriety thing, who understand that financial friendships have to take a pause when you go to work behind the police tape.


http://www.rollingstone.com/politics...#ixzz1ftG0pKII