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Was MF Global Worth More as a Carcass?
Submitted by Go2ManagedFutures.com
Attempts are being made to sweep MF Global under the media rug in hopes that investors simply forget the eighth largest bankruptcy in US history despite clear allegations of documented fraud surrounding the firm and its politically connected former president, Jon Corzine. The problem is, astute financial observers are aware of the corruptive behavior of Mr. Corzine, certain regulators and the US justice system. Some are calling into question the security of the entire US financial system, not just the commodity industry.
At the center of questionable activities is the bankruptcy process itself, loaded with recognizable personalities. Among them, Louis Freeh, the former director of the Federal Bureau of Investigation (FBI), who has been accused of dragging his feet on a fraud investigation of top MF Global executives [update: and is under investigation by the Treasury Department for allegedly taking money from a designated Iranian terrorist group]. A trustee for the creditors in the Chapter 11 bankruptcy case, JP Morgan Chase, MF Global’s largest creditor, was said to have actively recruited Mr. Freeh for the trustee position, despite his law firm having but a handful of lawyers and no commodity industry or bankruptcy experience. However, because this is a Chapter 11 bankruptcy, the process can drag out and Mr. Freeh and his related business endeavors could stand to pull in over $100 million in fees on the “plum case.”
Some say Mr. Freeh is rewarding JP Morgan by soft-peddling a fraud investigation despite his role as a federally appointed trustee and the apparent nod by the Department of Justice (DOJ) that anointed Mr. Freeh status as the DOJ’s eyes and ears on the case. Falsification of documents given by MF Global to regulators in the final days of the firm’s survival was alleged in Congressional Testimony by CMEGroup Chairman Terry Duffy, and knowledgeable industry sources speculate a web of fraudulent activity lies underneath the surface. The key to uncovering this evidence could be the MF Global back office, members of which are currently requesting immunity from prosecution in exchange for their testimony.
Strategically leaked press reports have cited investigators as saying the “case has gone cold,” and speculation widely exists that Mr. Corzine will not be convicted. These “cold case” claims are being made despite the fact that press reports claim the MF Global back office has not been interviewed and neither have top MF Global executives, who are still working for the firm (and apparently set to collect bonuses).
This is the case that is currently threatening the stability of the entire US financial system, establishing the template for future potential looting by the TBTF banks with the help of complicit and captured revolving door regulators and ex-government officials. It is the case that many speculate is being swept under the rug of media attention.
To see a recent media interview on Capital Account, where Mr. Freeh’s role is examined along with other significant questions, click here, or view the embedded video below.
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Being a customer, these days, sure doesn't mean what it used to mean anymore...
MF Global is the template for the transfer of wealth from financial system depositors to the holders of derivative obligations, who will actually have legal precidence over depositors. Greece writing down selected bonds is the template for giving certain entities precidence over general bond holders. Reflecting upon these precidents, it should be clear that all assets in the system will very likely "vaporize" at some point in time.
The name of the game is "shame".
or just plain old financial robbery
protected by the State, itself a parasite on society
anyone arrested at MFG yet?!!
The lesson has still not been learned by the sheeple. Who in their right mind would buy sovereign debt after the Greek default theater of the absurd? And who in their right mind will continue to hold "paper" assets under the risk of hypothecation and re-hypothecation?
The stock market gained 500% in 5 years following the lows during the Great Depression, the largest % increase in any 5-year time period. IMO, MF Global cleared out the private investors in the commodities and stock markets making it much easier/less expensive for the manipulators to do what they do best. To me, the MF Global BK did exactly what it was designed to do, clear the markets of private investors and allow the rich to get richer through their own manipulative tactics.
I think I have a lot of US sovereign debt sitting around in my 401K because I don't trust the stock market. I am asking to be robbed, aren't I?
"The call is coming from INSIDE the house, GET OUT!"
Figger a way to get those 401K funds into yer OWN hot, little hands!
Client=target=muppet=mutated capitalizm=U.S.A.=end of freedom
who in their right mind would do business in, or with, New York
these guys are crooks, including the legal system, and stinking the place out ..and London is no better
Not sure how widespread, but have read a few articles indicating that some farmers, burned by MFG, are entering into contracts directly with end buyers, versus hedging through futures contracts. Ditto for mining companies - except that some sources indicate that end buyers are approaching them directly. This was a wakeup call for many [sentient] commodities producers who viewed the futures markets as a way to hedge their price risk. Expect that more will continue take other avenues, and open price discovery will become more difficult, or there will be growing divergences between Comex and "real world" prices.
the CME Group has been running ads' on CNBC for a long while how they "help farmers" etc hedge, the impression given is what a helpful integral part of the wholesome community of the US of A (cough)