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Bloomberg and others are reporting that Corzine ordered customer funds transferred

This is being widely mentioned on financial blogs and even the local 11pm news here in NYC but here....crickets.

I was astounded at the lack of questioning (and excuses) here when the MF Global story first broke.  For all the promises of change we have seen very little when it comes to the financial sector - in fact wer have seen LESS prosecutions of financial crimes under Obama than under his predecessors (including W).

I am hard pressed to explain the lack of effort in investigating an prosecuting financial crimes (and the paltry settlements reached in the cases brought).  

Like it or not the perception (and from my pov, the reality) is that it matters little who is the President - or which party is in power.  Both serve the same masters - and it is not 'the people' but the plutocracy.

Even the Huffington Post is giving this substantial coverage- albeit under 'busioness'

Whatever the 'reality' at work when it comes to MF Global, a fundamental crime was committed - customer funds were not kept segregated and used to cover firm liabilities.  The bankruptcy filing compounded the crime with FULLY PAID customer accounts not getting full reimbursement and accounts being frozen - while trading continued on exchanges - leading to significant losses by account holders.  Both MF Global AND its overseers failed customers.

It is not difficult for people to perceive of this situation as being one where people - politically connected people - have been given preferential treatment.  Corzine pressured the CFTC NOT to implement additional  oversight in the months before the meltdown and - to date - nobody has been arrested for anything - with one senior official being willing to testify before Congress ONLY if given immunity.

How would the DK community react if this were occurring under George W. Bush's administration - with a major Republican contributor and former elected official - the head of a firm where over a billion dollars of customer funds have gone 'missing'.... and how is that possible when funds cannot be transferred without leaving a clear and detailed trail?   It would be very easy to see WHERE any and all funds coming from MF Global went - funny how JPM has a role in that bankruptcy when it received hundreds of millions FROM MF ZGlobal shortly before the bankruptcy.......

'More and better Democrats' is not going to have any impact in a political system where the rule of law is ignored with little fear of retribution...   We have relatively minor prosecutions for insider trading' where the profits are a rounding error on the amounts involved in far larger crimes.

Where's REAL accountability and the rule of law?

If the Republicans were smart they could make a VERY large issue of this.......  

Originally posted to xrepub on Fri Mar 23, 2012 at 09:13 PM PDT.

Also republished by ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement.

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Comment Preferences

  •  I see Timeaus beat me (barely) (7+ / 0-)

    though one has to wonder why a story that brome some time earlier today had no earlier mention......

    Life isn't fair but you should try to leave it fairer than you found it.

    by xrepub on Fri Mar 23, 2012 at 09:16:27 PM PDT

    •  By 7 minutes! You spent more time writing. (3+ / 0-)
      Recommended by:
      Horace Boothroyd III, WisePiper, Smoh

      But we both appreciated the importance of the story immediately.

      As used to be the custom, I respectfully request that you delete this diary and post most of your text as a comment in mine. But whatever you wish.

      •  I'm no financial analyst either nor a fan of (2+ / 0-)
        Recommended by:
        johnny wurster, PsychoSavannah

        Corzine, but it looks to me that both of your diaries are a little quick on the draw and possibly overstated the case against Corzine, as did the Bloomberg headline writer. In fact, the memo in question was NOT written by Jon Corzine but rather by Edith O’Brien, a treasurer for the firm, and referenced only the initials JC, not the full name.

        Further, Bloomberg reported

        JPMorgan drafted a letter to be signed by O’Brien to ensure that MF Global was complying with rules requiring customers’ collateral to be segregated. The letter was not returned to JPMorgan, the memo said.

        The money transferred came from a segregated customer account, according to congressional investigators. Segregated accounts can include customer money and excess company funds.

        While I'd like to see all the financial bums responsible for nearly crashing the whole world's economy in prison, clearly, Corzine has a lot of wiggle room here. At this point, there is no smoking gun.

        Sorry, but I have to ask: are you sure you want to quibble over who was first to post incomplete and possibly misleading information?

        Eliminate tax breaks that stimulate the offshoring of jobs.

        by RJDixon74135 on Sat Mar 24, 2012 at 04:18:10 AM PDT

        [ Parent ]

      •  My thought exactly. (don't mean to be mean). But (0+ / 0-)

        I understand the situation much better with the repetition.  :-)

        Cats are better than therapy, and I'm a therapist.

        by Smoh on Sat Mar 24, 2012 at 07:14:15 AM PDT

        [ Parent ]

  •  If The Occupants Mattered, Then if Republicans Mad (5+ / 0-)

    a large issue of it, they would be smart.

    But in our democratic plutocracy, making a large issue of it would be political suicide long before the occupants ever got to have a say in it.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Fri Mar 23, 2012 at 09:17:24 PM PDT

  •  Well, I guess the Honorable John Corzine (1+ / 0-)
    Recommended by:
    Mr Robert

    should pay something less than 4% (the going rate I think) in penalties for any monies he himself made while doing this; get to be head of a big banking firm or position in government; but definitely, definitely, he should get a medal and many industry awards.

    Today, if you exist... that's already suspicious.

    by Jim P on Fri Mar 23, 2012 at 10:30:59 PM PDT

  •  I will ask a simple question. (0+ / 0-)

    The reports stem from "a memo written by congressional investigators". Those investigators are working for House Republicans who will twist anything to make the administration look bad.

    Remember the "Global Warming is a Hoax" e-mails.

    Do you trust this considering the fact that the report is based on a leak from "congressional investigators"?

    •  That's possible I suppose (2+ / 0-)
      Recommended by:
      Timaeus, Tomtech

      but why would anyone claim something that would be so easily debunked months before the election? Either the e-mail exists or it doesn't and next week the person that wrote the e-mail will testify before Congress. Either way, Corzine is guilty of Sarbox-Oxley violations. Obviously, the risk controls that Corzine signed off on were basically nonexistent if up to 1.6 billion dollars of customer money could be stolen by his firm.

    •  Of course Corzine ordered it (2+ / 0-)
      Recommended by:
      Timaeus, Tomtech

      A narrative in which someone below him ordered it without his knowledge makes no sense.

      But nobody's buying flowers from the flower lady.

      by Rich in PA on Sat Mar 24, 2012 at 05:11:54 AM PDT

      [ Parent ]

  •  Too bad for Corzine (1+ / 0-)
    Recommended by:
    johnny wurster

    that he wasn't in the habit of hiring religious zealots.  Then he might be able to claim that "per JC's direct instructions" wasn't referring to him.

  •  huge story. (1+ / 0-)
    Recommended by:
    Rich in PA

    I think we'll ultimately see see a conviction here.  Hopefully its a decent sentence for either JC or his unfeeling that wrote the email.

  •  One quibble (3+ / 0-)
    Recommended by:
    johnny wurster, Smoh, Timaeus

    I don't really recall anyone making excuses for Corzine here. We all pretty much assumed that he was a fraudster in all this. What many of us did say was that it was too bad, since he was an OK governor.

    But nobody's buying flowers from the flower lady.

    by Rich in PA on Sat Mar 24, 2012 at 05:10:49 AM PDT

  •  Sounds like an attempt at Whitewater here (1+ / 0-)
    Recommended by:

    to find some tenuous link between the President and a financial scandal.

    First, all we have is the testimony of one person sayin that "JK" ordered the money moved.

    That person had both a fiduciary and legal obligation not to move cust seg funds on the orders of the CEO. MF Global was not sole proprietership.

    A bank president simply can't teller to take $50,000 from customer A to the bank president's brokerage account to cover a margin call. If the teller does that, the defense "I was told to do it" surely won't hold up in court.

    JPM and the CME both had obligations to verify the source of the funds. Calling the CEO or taking the word of MF staff would not qualify as executing proper due diligence.

    The GOOPER feeding frenzy will start. I'm sure the 2012 versions of Jeff Gerth and Steno Sue will produce leaked reports showing how Michelle Obama had lunch at JK's house several weeks before.

    •  An enormous amount of funds are stolen (3+ / 0-)
      Recommended by:
      Smoh, Mr Robert, Timaeus

      from a brokerage to cover a fucked up trade that tanks the firm.  There's nothing tenuous about the link between that and the CEO that oversaw the whole thing.

      •  Not at an FCM (0+ / 0-)

        Customer seg funds are just that -- segreated funds. They are regulated by the CFTC.  There are also obligations on financial institutions taking on cust seg funds.

        The CEO has no control over customer seg funds.  

        Any FCM has to have controls that prevent the senior management from taking control of that money. They have to show on a daily basis that the link between senior management and customer seg funds is tenuous.

        This is the kind of nonsense that was spewed during Whitewater.  The governor of a state can tell a federally insured S&L how to lend money.

        We now have 'the CEO of an FCM can order customer seg funds moved'.  And he did it to benefit the Kenyan Muslim Terrorist.

    •  JK? (0+ / 0-)

      Cats are better than therapy, and I'm a therapist.

      by Smoh on Sat Mar 24, 2012 at 07:20:42 AM PDT

      [ Parent ]

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