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MF Global Legally Used Customer Funds

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eastmn
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MF Global Legally Used Customer Funds  Reply with quote  

The news seemed to be saying that MF Global's use of customer funds
was illegal, but then I found this SeekingAlpha article.

Edit: Be sure to read the Forbes Article mentioned in the link.

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Last edited by eastmn on Wed Nov 23, 2011 2:34 am; edited 3 times in total
Post Tue Nov 22, 2011 1:37 pm
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ting231
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Is it true?
Post Tue Nov 22, 2011 2:46 pm
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eastmn
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Gerald Celente claims to have lost millions in this mess. He's
mad as hell, and the law is warning him about his threats.
2 Part Youtube Video

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Post Wed Nov 23, 2011 1:51 am
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coaster
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Re: MF Global Legally Used Customer Funds  Reply with quote  

quote:
Originally posted by eastmn
The news seemed to be saying that MF Global's use of customer funds was illegal,

Rick Santelli had some interesting observations several days ago. It seems some of the financial "reforms" of recent years made it legally possible for MF Global to iinvest seg funds in risky investments that had not previously been allowed for that purpose. His observation is that it's regulation that made possible this disaster and other previous disasters, and he's right on target. It's not more regulation we need; we see the consequences; we need intelligent regulation and enlightened oversight; neither of which is likely so long as politics is the driving force.

~Tim~
Post Wed Nov 23, 2011 8:09 am
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coaster
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quote:
Originally posted by eastmn
Gerald Celente claims to have lost millions in this mess.

Poor baby. With the trustee billing $800 per hour, the more legal hassles he has to deal with, the less will be left over.

~Tim~
Post Wed Nov 23, 2011 8:11 am
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eastmn
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CME Group media disclosure (Nov 15th) explains the guarantee and infers that MF Global did misuse segregated customer funds.

Quote:
"The CME Trust was established in 1969 to provide financial protection to customers in the event a CME Group member firm was unable to meet its obligations to customers. CME Trust is providing virtually all of its capital, $50 million, to CME Group market participants suffering losses as a result of MF Globalís improper handling of customer funds at the firm level."
From: http://www.cmegroup.com/clearing/files/Nov15QAGuaranteepost.pdf

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Last edited by eastmn on Thu Nov 24, 2011 12:37 pm; edited 1 time in total
Post Wed Nov 23, 2011 1:25 pm
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coaster
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Hah. $50 mil is a drop in a very large bucket. And furthermore, I think the CME to some extent is trying to deflect their part as MFG's oversight authority. I suspect they're in a certain amount of hot water as well.

I have no doubt seg funds were misused. What laws were broken is going to be a matter of a very long and very nasty court battle most likely. If it was legal for MFG to invest seg funds in risky investments it was most certainly a few other things:

1) abrogation of fiduciary responsibility

2) fraud (for reporting a strong financial position)

And that's just the start because if they used seg funds as collateral as well for their proprietary trading THAT is most certainly against the law and there in addition to fraud you get into stuff like conversion at least, if not outright theft.

And even that's just the start, because one reason the trustee has had such a problem trying to determine how big the risk of loss might be is that there were a number of large cash movements, wire transfers, possibly involving offshore accounts or at least transfers between US and overseas affiliates/divisions, which were either poorly documented or just plain outright covered up.

Oh, I have no doubt criminal activity was involved, and Corzine was known as a "hands-on" manager, so reach your own conclusions.

I downloaded my claim forms today from the trustee's site but haven't had a chance to take a look yet.

~Tim~
Post Thu Nov 24, 2011 7:34 am
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eastmn
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There was another move in court where trustee (conflict of interest)
is rumored to be trying to limit victim's rights as far as clawback.
http://www.youtube.com/watch?v=LaobXsB1fnA
Also: MFGfacts.com

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Post Thu Nov 24, 2011 12:54 pm
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eastmn
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Derivatives Attorney Jim Falvey speaks about the MF Global bankruptcy, the Volcker Rule, protection of segregated funds, conflicts of interest, and other compliance issues related to the Dodd-Frank Act.
http://www.youtube.com/watch?v=bbrws3K-cXA

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Post Sat Nov 26, 2011 5:58 pm
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eastmn
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Cooked the books...

Update:
Analysis: MF Global proves Enron-era accounting lives on
http://www.reuters.com/article/2011/12/01/us-mfglobal-accounting-idUSTRE7B02PS20111201

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Post Fri Dec 02, 2011 12:31 am
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coaster
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Well, I got an account statement from some FCM I never heard of showing a credit of exactly 60% of my MFG account. Must be that last "bulk transfer." I just have to keep shaking my head and rolling my eyes. I don't think the whole story's out. And dang it all, I missed Corzine's testimony today.

~Tim~
Post Fri Dec 02, 2011 7:26 am
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eastmn
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Sorry that you got burned in this mess. Hopefully, the clients' lawyers can find where he may have crossed the line (technicality, clawback).

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Post Fri Dec 02, 2011 8:02 am
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coaster
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Well, I don't feel particularly burned. The approach I took when I opened a futures trading account some, oh, I think 17 years ago? was that I kissed those funds good-bye forever, so I wasn't emotionally tied to that money, nor was it money I needed to survive. Since then, I've brought home about 2/3 of the original capital, and so if all I ever get back is 60%, I'm still well ahead. No, it's not about the money for me; it's more about "who the heck can you trust"

~Tim~
Post Sat Dec 03, 2011 7:51 am
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eastmn
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The Telegraph (Nov 8th):
MF Global paid bonuses just hours before bankruptcy

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Post Sat Dec 03, 2011 8:03 pm
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eastmn
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Ann Barnhardt was one of the first MFG headlines.
===================================
30 min Nov 30th Interview on why she closed brokerage:
http://www.youtube.com/watch?v=nisNDsRLOH8

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Post Sun Dec 04, 2011 11:18 pm
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