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Tuesday, November 01, 2011

Who Would Have Thought that John Corzine's MF'n Firm Would Misplace a Few Hundred Million of Client Money?

"Are You Fired Up?"

Former Gov. Corzine's Wall Street firm under investigation; hundreds of millions of dollars in question

Published: Monday, October 31, 2011, 9:52 PM     Updated: Tuesday, November 01, 2011, 5:41 AM

NJ com.

Regulators are investigating whether hundreds of millions of dollars are missing from client accounts at a Wall Street firm run by former Gov. Jon Corzine, a federal official said tonight.

MF Global Holdings, a large commodities brokerage firm Corzine took over last year, filed for bankruptcy protection yesterday. In federal court papers, company officials said the European debt crisis had put the firm billions of dollars in debt.

Federal regulators learned of the discrepencies in MF Global’s client accounts while monitoring the firm’s books as the company spiraled into bankruptcy. Those accounting discrepencies helped doom a last-minute deal to sell part of MF Global to another company.

U.S. officials want to know if the missing money is a bookkeeping error or if MF Global improperly shifted client funds.

"We’re trying to figure out what happened and where that money was diverted to, if it was diverted at all," the federal official said. "We are looking into it intensely. We’re trying to figure out what happened to those customers’ funds."
The official declined to be named because he was not authorized to speak publicly about the probe.

The New York Times, Bloomberg news service and other media outlets first reported the MF Global investigation last night.

A spokesman for Corzine declined to comment on the reports. Corzine could not be reached for comment.
A MF Global spokesman also declined to speak about the federal investigation. But a source at the firm said the situation is likely the result of financial miscalculations.

MF Global executives were racing over the weekend to get their books in order to sell part of the struggling company to another firm, the company source said. The speed of the process coupled with a number of clients pulling their money out of the company may have led to accounting errors. The MF Global source asked not to be named because he was not authorized to speak about the situation.

The possible sale to Interactive Brokers in Connecticut fell through and MF Global declared bankruptcy.

MF Global went to federal regulators today to say the deal was off and report a possible problem with its customer accounts, according to a joint statement by the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission.

"Early this morning, MF Global informed the regulators that the transaction had not been agreed to and reported possible deficiencies in customer futures segregated accounts held at the firm," the statement said.

The company will be liquidated, according to the joint statement. The federal Securities Investor Protection Corp. will oversee a bankruptcy proceeding that will "be the safest and most prudent course of action to protect customer accounts and assets," the statement said.

The bankruptcy is a blow to Corzine’s reputation as the former governor tries to restart his Wall Street career after a stint in politics. Corzine, 64, took over as chairman and chief executive officer of MF Global after he lost re-election to Gov. Chris Christie in 2009.

Before entering politics, Corzine was chairman and CEO of Goldman Sachs, the giant Wall Street firm he helped go public. That decision made him and other executives at Goldman Sachs wealthy. But Corzine was forced out of the company in 1999 after an internal power struggle.

He was later elected as a U.S. senator for New Jersey. The Democrat ran for governor in 2005, serving for one term before losing to Christie.

At MF Global, Corzine led the company into the European debt crisis by gambling on investments in Italy, Spain, Portugal and other debt-ridden countries, according to the Associated Press. Corzine had hoped to build the firm into a major investment bank.

Last week, credit rating agencies downgraded MF Global and its stock fell 66 percent. Investors started to pull money out of the company and the firm fell into deep debt.

Some Wall Street pundits said MF Global’s bankruptcy could affect credit markets and make financial companies reluctant to lend to each other.

"It appears their exposure to risk was particularly acute," but the impact on markets will likely be muted, Karen Shaw Petrou of Federal Financial Analytics told the AP.


  1. John McClane: Why'd you have to nuke the whole building, Hans?

    Hans Gruber: Well, when you steal $600, you can just disappear. When you steal 600 million, they will find you, unless they think you're already dead.

  2. Mega-banks are all MF'n banks. Break these bastards up.

  3. If this is true, Corzine should go to jail. Are you fired up? The Greeks are going to fire up the Germans.

  4. 10-year Italian government bonds jumped 20 basis points to 6.18%,

  5. Deuce: The mob may be sloppy but they know who and where the real shit birds are.

    You're welcome to 'em, Deuce. The Vatican stands with the OWS slop.

    The Catholic Church demands that the fiscal and monetary authorities of all nations of the world, as well as that of all financial institutions both public and private, are to be gradually subjugated under a supranational public authority with universal jurisdiction.

    This is to be financed by a global central bank empowered to collect a tax on all financial transactions. This bank would regulate all monetary exchange while also having the authority to promote global development and sustainability according to the principles of social justice and solidarity.

    It could also contribute to the creation of a world reserve fund to support the economies of countries hit by crisis.

    This reform process is to be managed by the United Nations, whose mandate will be to act on behalf of the common good.

  6. The United States will not pay $60 million to a U.N. cultural and educational agency after it voted Monday to accept the Palestinian mission as a full member . . .Washington is required by law to cut off funding to any U.N. agency if the Palestinian Liberation Organization is granted membership in any group at the international body.


  7. Bibi Netanyahou interests me more than the Pope (at least he has nuclear weapons.)

  8. Thieves that know they won't go to jail.

  9. The European bureaucrat-oligarchs are shocked and dismayed that democracy has reared its ugly head again. Things would go so much better if the Greek subjects (er...citizens) just obeyed their superiors.

    Greek Prime Minister George Papandreou called a referendum and a parliamentary confidence vote, raising the prospect of derailing Europe’s bailout effort and pushing Greece into default. Stocks and the euro tumbled.

  10. Let's put the world's future in the care of hubristic, magalomaniac, sociopaths that know they are immune from prosecution.

    What could possibly go wrong?

  11. 37. stoicheion A misogynist society such as Islam cannot survive the loss of it’s males.

    Pharaoh made this same error when he ordered all the Hebrew male children put to death, but left the girl children alone. Us'uns womenfolk are the real bottleneck. Ten minutes in a bathroom with a Hustler magazine, and a single Caliph has enough male genetic code for 400 million faithful Muslim soldiers, so long as his harem is big enough.

  12. Weekly Retail Sales recaptured most of last week's decline. +0.7%.

  13. ISM Manufacturing just barely above even at 50.8.

  14. Italy 10-year government bond yield soars to 6.30%

  15. It might be gone now, but Italy would make it official.

  16. The Euro was an idiotic idea from the start. To tie Greece, Italy, and Spain into the same currency as Germany is inanity to the nth.

    It's going to end up "breaking" them all. It's not going to do us "much good," either.

    It'll be a mess.

  17. One more time the Americans screwed around and got it right.

    The system of Bi-Lateral, Free-Trade Agreements between Democracies with Free-Floating, Sovereign Currencies will look like true genius.


  18. If Mr. Papandreou’s government falls, it would not be the first one in Europe to be toppled by the austerity demanded by European debt relief. In Ireland and Portugal governments that accepted bailouts from the European Union and the International Monetary Fund fell, and last month the Slovakian government fell over whether to participate in the European Union’s rescue package.

  19. Bloomberg reports:

    In the event of a referendum result rejecting the package agreed to at the European summit, “Greece will have to deal with the consequences -- no new aid measures,” Michael Meister, parliamentary finance spokesman for Merkel’s Christian Democrats, said in an e-mailed statement. The enhanced rescue fund means “the euro area is prepared.”

    “Greece is a democracy and we have to accept this,” he said.

  20. .

    The Catholic Church demands...

    You know, "demands", as in

    "With due respect for the competent civil and political authorities, the Council hereby offers and shares its reflection:



  21. .

    Good one on the stroke theme Ruf.


  22. Don't you just love it when a typical EU plan goes off the rails, and boy do they go off the rails in spectacular fashion.

    The idea of a european superstate with central planning? It just wont work no matter how many times the leaders get together and agree to a course of action. Papandreau just threw a huge wrench into the works. You could not make it up.

    No wonder the euros feel so threatened by the US. You yanks can at least get your crap together eventually. The US deficit can be solved reasonably quickly by just cutting some of your massively vain US projects in the military and of course as you write on incessantly, becoming energy independent.

    Anyone who wrote the US dollar off is going to be seriously sorry because in comparison to the euro it does smell like a reserve currency, the euro just smells like a poor quality french cheese.

  23. One hell of a pilot here. Polish LOT flight landing with no landing gear. Damn baby!

  24. Deuce said...

    Italy 10-year government bond yield soars to 6.30%

    That's nothing. The yield on Greek two-year government notes surged to a record 87 percent today. They don't even bother with the crap after the decimal point.

  25. Be afraid. Be very afraid.

    Italian bond spreads have jumped to 450 basis points.

    Unless the European Central Bank step in very soon and on a massive scale to shore up Italy, the game is up. We will have a spectacular smash-up.

    If handled badly, the disorderly insolvency of the world’s third largest debtor with €1.9 trillion in public debt and nearer €3.5 trillion in total debt would be a much greater event than the fall of Credit Anstalt in 1931. (Let me add that Italy is not fundamentally insolvent. It is only in these straits because it does not have a lender of last resort, a sovereign central bank, or a sovereign currency. The euro structure itself has turned a solvent state into an insolvent state. It is reverse alchemy.)

    The Anstalt debacle triggered the European banking collapse, set off tremors in London and New York, and turned recession into depression. Within four months the global financial order had essentially disintegrated.


  26. The one thing, the only thing, that can save us from a recession in the first-quarter of 2012 is the great bearded one. No, not Santa Claus. Santa Bernanke.

    Schoenberger says if the Federal Reserve institutes a third round of quantitative easing we'll be in the clear, at least for a while. Ironically the strong GDP print is going to keep the "reactive, not proactive" Fed from acting, rendering next week's two-day FOMC meeting a non-event and virtually ensuring Schoenberger's call for a recession.

    Given the utterly stagnant economic growth of the last few years, there's a case to be made a recession wouldn't be much different than, say, a 1% GDP rate. Schoenberger snuffs that flicker of optimism as well. Historically recessions result in a 2-3% rise in unemployment and a 15% drop in the stock market.

    With over 9% unemployment and markets that have gone nowhere for over 10 years, the prospect of more pain is grimmer than any ghost story you're going to hear this Halloween.

    The Only Way to Avoid Another U.S. Recession

    The President is not dependent upon Santa, to inject liquidity into the economy.

    He just has to take decisive action.

  27. Arizona and Alabama are now joined by South Carolina in the ranks of those sued by Eric Holder to prevent the implementation of the state’s new immigration law, signed by Gov. Nikki Haley in June.

  28. “…a ground offensive would be ordered only after massive rocket fire…

    The Islamic Jihad faction was behind the initial rocket attacks. On Sunday the militant faction agreed to stop the violence if Israel also did. Rocket fire that drew retaliatory Israeli airstrikes persisted afterward, but it was claimed by a different militant group, the Popular Front for the Liberation of Palestine.
    Gaza's ruling Hamas group, which has killed hundreds of Israelis in past violence, has not directly been involved in the attacks. Israel holds Hamas responsible for all violence from the territory…”

    “Wee Willy Winkie ran through the town”


    Meanwhile, the Obama administration would have us believe that it seriously believes the Russians will sanction themselves by sanctioning their nuclear client, Iran.

    “Upstairs and downstairs in his nightgown”


  29. A fistful of pesos

    Top five exporting states to Mexico

    Full year 2010

    Texas, $163 billion

    California, $21 billion

    Michigan, $7 billion

    Arizona, $5 billion

    Illinois, $4 billion


  30. From 2000 to 2010, Arizona grew the fourth-slowest of all states in international trade, at a sluggish 9.1 percent clip.

    Forty states grew by more than 50 percent over the decade, and the national average was 64 percent.

  31. Rufus II said...
    They. Are. All. Thieves.


    Yeah, but they are not all incompetent clubfoots.

    Cain and "crew" knew this was coming for TEN days.

    WTF ?

    Hard to believe.
    I could lie better than that.

  32. Mr Cain, Doug, just another fella with feet of clay.

    The choice for the GOP will boil down to Mr Romney or Mr Perry.

    Pick your poison.

  33. Yeah, another thrill.

    But I'll go crazy listening to Perry repeat the Compassionate One's lies on the border and immigration.

    So here's to shit:

    Go Mitt!

  34. The comments on that Schoenberger thread are better than average.

  35. Sorry to be so long responding but life is tough what with South Carolina golf to play.

    I got a moment to search about on the fractional reserve banking thing. Wiki has a nice piece where they point out how no real money is created yet what the author refers to as 'commercial bank money' is created.

    Individual Bank Amount Deposited Lent Out Reserves
    A 100 80 20
    B 80 64 16
    C 64 51.20 12.80
    D 51.20 40.96 10.24
    E 40.96 32.77 8.19
    F 32.77 26.21 6.55
    G 26.21 20.97 5.24
    H 20.97 16.78 4.19
    I 16.78 13.42 3.36
    J 13.42 10.74 2.68
    K 10.74

    Total Reserves:


    Total Amount of Deposits: Total Amount Lent Out: Total Reserves + Last Amount Deposited:

    457.05 357.05 100

    not sure how the formatting will come out here but it basically traces 100 bucks.

    You can find it here:


  36. Cain better hope that there are no more offended women in the wood pile.

  37. The administration also announced "solar energy zones" set up by the Bureau of Land Management in 20 millions acres of the Mojave Desert and other areas of the west, intended to encourage development in areas without environmental or cultural conflicts, the Los Angeles Times reported Friday.

    The zones are areas that have already met environmental requirements and therefore promise expedited permitting of solar energy projects, U.S. Interior Secretary Ken Salazar said.

    Solar Energy Zones

    Bless his heart; he's trying.

  38. We’ve discussed the pros and cons of a proposed US Renewable Energy Standard of 15% by 2021 a bit here on Cleantechnica lately. While we struggle for that bare minimum, though, European nations are steaming ahead in their renewable energy targets.

    Northern Ireland announced this week that it plans to hit 40% renewable energy by 2020. Germany announced that it intends to have 60% of its power come from renewable energy by 2050 (but could even hit 100% by that time). And Scotland is aiming for “at least” 100% by 2025 it said in yet another big, clean-energy announcement this week.

    Earlier this year, a study found that Europe as a whole is well on its way to exceeding its renewable energy target of 20% by 2020.

    Source: Clean Technica (http://s.tt/12vbR)

    Forging Ahead

  39. Allen: Rocket fire that drew retaliatory Israeli airstrikes persisted afterward, but it was claimed by a different militant group, the Popular Front for the Liberation of Palestine.

    Brian: Are you the Palestinian People's Front?
    Reg: Fuck off.
    Brian: What?
    Reg: Palestinian People's Front. We're the People's Front of Palestine.
    Brian: Can I join your group?
    Reg: No. Piss off.
    Brian: I didn't want to sell this stuff. It's only a job. I hate the Jews as much as anybody.
    PFJ: Sssh. Ssssh, sssh, sssh, ssssh
    Judith: Are you sure?
    Brian: Oh. Dead sure... I hate the Jews already.
    Reg: Listen. If you really wanted to join the PFP, you'd have to really hate the Jews.
    Brian: I do.
    Reg: Oh yeah? How much?
    Brian: A lot!
    Reg: Right. You're in. Listen. The only people we hate more than the Jews are the fucking Palestinian People's Front.
    PFJ: Yeah
    Judith: Splitters.
    Francis: And the Palestinian Popular Peoples Front.
    PFJ: Oh yeah. Splitters.
    Loretta And the peoples Front of Palestine.
    PFJ: Splitters.
    Reg: What?
    Loretta The Peoples front of Palestine. Splitters.
    Reg: We're the Peoples front of Palestine.
    Loretta Oh. I thought we were the Popular Front.
    Reg: Peoples Front.
    Francis: Whatever happened to the Popular Front, Reg?
    Reg: He's over there.

  40. 15. Mongoose: “The Islamic right”? Just who or what would that be?

    The ones who throw acid in schoolgirl's faces because they're not supposed to be learning anything. The Islamic Left would someone like Benazir Bhutto. Admittedly not a long life expectancy in the Islamic Left.

    "Yet the rift was quickly patched, thanks to a frenzied but largely unseen lobbying effort that kept the coalition from unraveling in its opening hours."

    So not only did the Europeans rely on US strike sorties to save their Libyan oil fields for them, they had to rely on the Hildebeast to keep their illusion of a "coalition" together so it at least looked like NATO still had teeth. Well, hey, maybe when the Europeans mobilize for World War Three like Merkel says might happen after a Greek default, they'll ask Hillary to remind them again why they're doing it and maybe keep their axis from falling to pieces.

  41. Allen: Tell me again: Why were these people ever allowed into the EU? This sounds like Turkey!

    The Greeks are good Christian socialists with all the good beaches where the Euros like to bake in August. The Turks are Muslim capitalists who throw druggies into prison and pat their feet.

  42. Neat little business model Papandreou has. He needed 8 billion Euros to pay the interest on Greek debt through October and promised austerity to get the bailout, and they rolled over. Now he'll put the austerity plan before the people in a referendum in three or four months. Meanwhile, he's going to need Germany to put Greek interest payments on the "tab" for November, December, January, and maybe February. At some point, the German taxpayer is going to balk, and the deal will be off. Then Papandreou will need 9 billion Euros to pay the interest on Greek debt through March and promise austerity to get the bailout. And Sarkozy will twist Merkel's arms again, because French banks are hocked to the gills. Lather, rinse, repeat... This is like Atlas Shrugged II: European Vacation.

  43. .

    And this is what we pay these dicks for.

    “H.Con.Res 13 — Reaffirming ‘In God We Trust’ as the official motto of the United States.”

    The grace of this legislation, taken up on the House floor, was not immediately revealed to all. “In God We Trust” has been the nation’s official motto for 55 years, engraved on the currency and public buildings. There is no emerging movement to change that. But House Republicans chose to look beyond the absence of immediate threats and instead protect the motto against yet-unimagined threats in the future...

    A Sure Winner. Who is Going to Vote Against God?


  44. "When we killed bin Laden, we saw oil tanker designs on his work desk," Gen. James Conway, the former Marine Corps commandant, said in a report released late Tuesday.

    Conway was part of a group of 11 recently retired three- and four-star generals and admirals who prepared a report on American energy dependence as a national security threat.

    In the report, Conway said that an oil tanker attack might now be beyond al Qaeda's capabilities, but the intent was clear.

    He and the other military leaders said oil imports are directly linked to security, and that political compromise and resolve are necessary to slash demand by 30% within 10 years. Present circumstances give other countries or terrorists too much power to choke off oil supplies and cripple the U.S. economy, they say.

    "Weaning America from oil in substantive ways will make us safer as a nation," the report says. "The pace and consistency of our country's movement along the path to energy security is a vital national security challenge."