|
|
And it appears that investor outrage is
prompting a reaction amongst the regulators, as well it should. It is good to
see that the CFTC is taking this seriously, and it is always good to hear
from the 'can-do commissioner' Bart Chilton of the CFTC.
And it probably doesn't hurt to have SIPC on the hook for the funds as well.
Jon Corzine is a prominent Democrat who was said to
be a candidate to replace Tim Geithner as Treasury
Secretary.
Massive hide and seek ploy.
This is getting interesting.
Bloomberg
MF Global’s Missing Funds May Be
‘Massive’ Ploy: CFTC’s Chilton
By Silla
Brush
Nov 10, 2011 5:31 PM ET
The $593 million shortfall in client money at MF Global Holdings Ltd., the
broker that filed for bankruptcy on Oct. 31, appears to result from a “massive
hide- and-seek ploy,” Bart Chilton, a commissioner at the U.S.
Commodity Futures Trading Commission, said today.
The agency took the rare step of publicly announcing
its investigation, which began on Oct. 31, saying it was in the public
interest to confirm the enforcement action.
Jill E. Sommers was named as the senior
commissioner during the probe, after Gary Gensler,
the agency’s chairman, recused himself.
“This isn’t just a lost and found inquiry; it’s a
full-on effort to get to the bottom of what appears to be a massive
hide-and-seek ploy,” Chilton, a Democrat, said in an e-mail.
“It’s a distinct possibility, some would say probability, that somebody
has done something with the money, and that it’s not going to be
‘all of a sudden discovered’ with an innocent explanation,”
Chilton said. “If that’s the case, it’s patently illegal. I
don’t know yet. Our investigation will uncover that, and we’re
aggressively pursuing this.”
Gensler recused himself
from the investigation because of his history with Jon S. Corzine,
the former head of MF Global. Gensler worked with Corzine at Goldman Sachs Group Inc. and during his time
as a Senate aide, while Corzine represented New
Jersey as a U.S. senator.
‘Get to the Bottom’
“I have complete
confidence in the dedicated men and women in enforcement to carry out the
necessary investigation to get to the bottom of what happened,” Sommers, a Republican, said in a statement.
The probe of MF Global’s cash movements is
being conducted by the U.S. Justice Department, the Commodity Futures Trading
Commission, the Securities and Exchange Commission and the bankruptcy
trustee’s staff in cooperation with the Securities Investor Protection
Corp., James W. Giddens, the trustee, said on
his website.
The CFTC also began a review of futures brokers to determine if client funds
are properly segregated. The initial review will include between 10 and 12
futures brokers and the CFTC hasn’t set a deadline for the review, a
person familiar with the review said.
Diana DeSocio, a spokeswoman for MF Global,
didn’t respond to requests for comment. Steven Goldberg, a spokesman
for Corzine in New York, said he had no immediate
comment."
|
|
