The Ties That Bind
In a lawful society it’s considered bad form, dare I say criminal, to take a person’s money by force or deception for your own gain. Somehow that basic tenet has been subverted in what passes today for capitalism, but should more accurately and honestly be considered corporate gangsterism. One of the more insidious recent examples comes courtesy of MF Global Holdings:
The shortfall of commodity customer funds at MF Global Holdings Ltd (MFGLQ.PK) may be around $1.2 billion, about double initial estimates from regulators, the trustee liquidating the company said on Monday.
The news was a blow to customers still hoping to get more of their cash out of frozen broker accounts and raised new questions about why the authorities managed to locate only about 60 percent of the segregated customer funds three weeks after the parent firm’s October 31 bankruptcy.
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Regulators are investigating what happened to the money and whether MF Global may have improperly mixed customer money with its own — a major violation of industry rules. No charges have been filed.
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Leaders on Capitol Hill have entered the fray with calls for hearings and accountability.
Sen. Chuck Grassley, R-Iowa, said the CFTC [Commodity Futures Trading Commission] should “do everything possible” to get more information to customers on the status of their funds. The call comes as angry farmers and ranchers across the country begin to reconsider a livelihood in the market and how they hedge future crops and livestocks.
“Unlike the big banks, the average farmer who lost money in this fiasco can’t afford to hire an attorney and attend proceedings in a Manhattan courtroom,” Grassley said in a statement.
MF Global was run by former Goldman Sachs & Co Inc (GS.N) chief and New Jersey governor Jon Corzine before its bankruptcy. The Chapter 11 filing came after the New York-based company revealed it made a $6.3 billion bet on European sovereign debt. Corzine resigned on November 4.
Hmmm. Corzine. Where have we heard that name before? Oh, yeah, that’s right:
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