Apparently rule of law in this country no longer applies to the 1%. Jon Corzine should have been arrested by now. Where is the outrage from Obama? Where are the criminal indictments from the federal government?
Corzine is entitled to the presumption of innocence but the victims of this apparent scheme are entitled to justice. Where is it? Six months into this we now have prima-facie evidence that Corzine ordered a transfer from customer segregated funds to meet a margin call against the firm’s proprietary trading.
If there’s an argument that this sort of transfer would be lawful I’d love to see it.
More to the point, if this sort of transfer is lawful then no person in this country can ever trade anything in a brokerage again until it is rendered unlawful and assurances are available that this conduct will result in long prison sentences and personal liability.
CME Group Executive Chairman Terry Duffy testified and indicated John Corzine authorized the transfer of consumer funds to the firm’s trading accounts.
If witnesses and evidence collaborate Duffy’s testimony, Corzine should face a charge of lying before Congress and other criminal charges. Corzine has friends in high places. Maybe he will be thrown to the wolves from the Wall Street cliffs as the latest sacrifice.
CME may be trying to dump all blame on Corzine to protect themselves. How reminiscent of Mafioso ratting each other out.
$1.2 billion is still missing. How could this not be criminal? This also strikes at the heart of Wall Street. If trading accounts can be looted, then what is safe?
Ex MF Global CEO Jon Corsine did not tell Congress he didn’t break rules, just that he didn’t mean to. Which leaves him much weasel room, should it be shown he did. Yet Sarbanes-Oxley requires that CEOs sign off on financial matters. Ignorance is not an excuse, except perhaps for Corsine, who is an ex Goldman head, senator, and governor. We shall see if we still have a functioning legal system (and if it becomes clear to the majority of the populace that we don’t then we will see riots in the streets, of that, I’ve no doubt.)
Bruce Kasting has digging into the MF Global story hard, trying to determine where the $1.2 billion vanished to. Here’s his take.
MFG is sinking. Clients are demanding their money be transferred out.
MF Global orders its bank (possibly JPM) to transfer the money.
The transfers are made.
In a highly unusual procedure, the bank sends a Letter of Indemnity to all institutions receiving the money, requesting it be sent back. The LOI indemnifies the institutions against possible problems.
The transfers are sent back.
BUT, the money goes into unrestricted MFG accounts not the client accounts. IOW, it is commingled, all in the terrible fog of war as MFG is going down. Pass me a hanky, this is all so terribly tragic.
Then, poof, the money disappears.
To claw-back a wire transfer requires significant human intervention. Banks do not write LOIs without carefully considering the consequences. There’s always a signature on an LOI……