MF Global

Does anyone really believe the MF Global executives when they say the "have no idea" what happen to over $1.2 billion of customer funds? This is such a bald-faced lie that I cannot imagine our Congresspeople and investigators cannot see through this scam.

MF Global is a fraud and a criminal enterprise. They have been lying about their misappropriation of customer funds for use in their own proprietary trading schemes in every deposition and so-called "investigation". Claims of ignorance and shoddy record keeping are nothing but a smoke screen.

Logic calls out for a different interpretation. I know from vast experience of building such electronic marketplaces that all electronic trading systems are designed with a series of audit trails and logs such that every order, every action, and every trade is captured with virtually 100% accuracy. The systems know to the penny what each customer account is worth at every second of every day, within small differences only due to fluctuating prices of assets. In addition every electronic funds transfer is logged with meticulous accuracy and attention to detail. And 99% of all that information is flowing through the computer systems without ever being touch by human hands.

So the question about the “missing customer money” should be turned into a series of technical questions:

• Do you have systems to track the flow of funds?
• Do you have systems to track the orders and trades executed by customers?
• Do you have similar systems for your proprietary traders?
• How accurate are these systems?
• What percentage of assets and funds transfers must be manually reconciled at the end of each trading day?
• Do the systems ever cross each other?  In what way?
• Are you required by regulators such as FINRA and the SEC / CFTC to maintain records?

In my estimation you will see a technical picture of amazing attention to details -- with obvious places to look for the $1.2 billion dollars, which I assure you did not simply vanish into thin air!  Yet the picture that the MF Global senior management is trying paint is one of complexity, confusion, irregularities, and ignorance. 

13 Dec 2011 - MF Global Conflicted Interested Parties (Tough Questions for MF Global, Conflicted Trustee Giddens & SIPC President Harbeck): http://www.zerohedge.com/contributed/tough-questions-mf-global-conflicted-trustee-giddens-sipc-president-harbeck

13 Dec 2011 - Second Senate hearing on MF Global bankruptcy: http://www.reuters.com/article/2011/12/13/us-mfglobal-hearing-highlights-idUSTRE7BC1AV20111213 

14 Dec 2011 - MF's Corzine said to know of customer fund misuse:
http://www.reuters.com/article/2011/12/14/us-mfglobal-hearing-idUSTRE7BC1AE20111214 
 
So you can begin to understand quote like these:
 
CHAIRWOMAN DEBBIE STABENOW ON FRUSTRATION OVER LACK OF ANSWERS:



"It's now been a month and a half since the firm collapsed and customer money is still nowhere to be found. This isn't the Dark Ages. MF Global didn't keep their books with feather quills and dusty ledgers. The rules about keeping customer money segregated are pretty straightforward. That it's been over a month, and teams of lawyers and forensic accountants still can't figure out what happened, raises very troubling questions."

LOTS, LOTS MORE on MF Global is here http://barnhardt.biz/index.cfm

Let's pray for the farmers, investors, and other people who had money tied up in MF Global that justice is eventually served and the criminals are punished.  Write your congresspeople and demand that justice is served and the rule of law is upheld!

21 Dec 2011 - E-Mail Clues in Tracking MF Global Client Funds "Ms. O’Brien is considered an expert of sorts on the protection of customer money at futures firms."  yet she, a treasurer at MF Global, appears to be directly implicated in the transfer of customer money to JP Morgan. [...] "Since MF Global’s collapse, Ms. O’Brien has been working for the trustee overseeing the liquidation of the firm’s brokerage unit, helping lawyers and accountants understand the firm’s operations.".  How convenient!  Sounds like we are letting the criminals themselves investigate the crime scene.  She should be behind bars or in the witness room surrounded by forensic accountants and tape recorders.