**Written by Doug Powers
It seems that MF Global has some money that is currently unaccounted for. About $700 million to be exact:
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.
Also from the Times story:
One of his [Corzine’s] 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.
There goes the next Energy Secretary.
We’ll let Tyler Durden at Zero Hedge close it out:
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.
And that, dear reader, is called unintended consequences, and how the bankruptcy of a small exchange can avalanche into a crippling Ice Nine of what is left of capital markets all over again, courtesy of crony capitalism, rampant criminality and a regulator and enforcement body that is more fascinated with midget porn than any regulating or enforcing of the very firms it hopes to get an assistant general counsel job from in a few short years.
Update: AP reports a federal official said MF Global admitted to using client money.
Update II: Flashback: Corzine’s “our Wall Street guy.”
Update III: Big 3 network news’ conveniently forget to mention Jon Corzine’s party affiliation.
**Written by Doug Powers
Twitter @ThePowersThatBeblog comments powered by Disqus
September 23, 2016 08:08 PM by Doug Powers
September 22, 2016 09:50 PM by Doug Powers
September 22, 2016 04:10 PM by Doug Powers
IRS commish’s case against his impeachment in a nutshell: It might dissuade the incompetent from entering ‘public service’
September 21, 2016 09:46 PM by Doug Powers
Of course: Hedge funders throwing millions at pro-Hillary super-PAC to help achieve her goal of getting money out of politics
September 21, 2016 04:45 PM by Doug Powers