Forum Post: Federal Regulators have Discovered that Hundreds of Millions of Dollars in Customer Money have Gone Missing from MF Global in Recent Days
Posted 5 years ago on Nov. 1, 2011, 7:10 p.m. EST by MonetizingDiscontent
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Regulators Investigating MF Global For $700 Million In Missing Client Funds - Was It Stolen By Management?
Heart Stopping News: MF Global did Not Separate Customer Accounts:
(Reuters) - MF Global Holdings Ltd, the futures broker that filed for bankruptcy protection on Monday, did not separate its customers' accounts from the firm's funds as required by law, its main exchange regulator said on Tuesday.
"CME has determined MF Global is not in compliance with Commodity Futures Trading Commission and CME customer segregation requirements," CME Group Inc Chief Executive Craig Donohue said. Futures brokers must keep customer accounts separate from each other and from the firm's own money.
Donohue said CME is looking into exactly what happened at MF Global.
-Liquidity Scramble Begins In MF Commingling Aftermath-
(ZeroHedge) When sharing our perspective last night on why the alleged MF Global crime of commingling client capital with the firm's deficiency capital we asked, "What happens next? Why customers at all other brokerages, all other exchanges, afraid that their money will suffer the same fate as MF, even if they transact with perfect solvent clearers and agents, will proceed to pull their money, as they know they have nobody to trust but their own prudent and forward looking actions. Which in turn will start the kind of liquidity drain that killed not only Lehman, but froze money markets, and with that brought the complete capital markets to a standstill, only to be thawed after the Fed pledged multiples of the US GDP to rescue Wall Street in October of 2008."
Sure enough, here it comes. "Reports of short falls of client money ... if true would be a disaster for all the smaller brokers and banks as nobody will trust them anymore," one London trader said. Reuters continues "MF Global filed for bankruptcy protection on Monday, putting a sudden end to Corzine's drive to transform the more than 200-year old MF Global into a mini Goldman by taking on more risky bets on euro zone sovereign debt. In Australia, trading in grain futures and options was suspended by bourse operator ASX Ltd , prompting concerns about the integrity of the country's agricultural futures market. "We're sitting out here with risk that we can't cover," said Jonathan Barratt, head of Sydney-based Commodity Broking Services. MF Global was one of the largest participants in the country's agricultural futures market. And it is all only going to get worse as the liquidity outflow avalanche is realized, following the market's most recent distraction with Europe.
How Former Goldman CEO And NJ Governor Jon Corzine Ran MF Global Into The Ground
-Clients scramble for money after MF Global shock-
BREAKING -MF Global Admits Using Client Money-
This is not looking good for former New Jersey Senator and Governor, and previously Goldman Sachs CEO Jon Corzine. More than $700 million of supposedly safeguarded client funds were stolen by MF Global to support besieged trading positions. Jon Corzine should go to prison. If Corzine escapes without a Federal ID number and associated orange jumpsuit due to fundraising ties with Obama and Eric Holder, then the game is over.
-Regulators Investigating MF Global for Missing Money-
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.