Pollock: So that's why you're calling Jon Corzine a chicken on CNN? Koutoulas: Yes, where's the money, Jon?

EB's picture

Reposted from our blog at EconomicPolicyJournal.com

Today's Senate hearings into the MF Global debacle demonstrate that conflicted Chairman (and ex-Goldman Sachs CEO) Gary Gensler is unwilling to provide anything more than mere lip service to the beleaguered customers whose funds remain inaccessible more than one month from the bankruptcy filing.  Further, the issue of just why exactly SIPC, a securities resolution agency, is "managing" a futures commission merchant liquidation is among the more salient issues being completely ignored--except by various customer advocacy sites, such as MFGFacts and MyInvestorsPlace.

However, MF Global customers can take a bit of solace knowing they have a voice in front of Judge Glenn in the liquidation proceedings in the form of the Commodity Customer Coalition (#CCC) and its team of hard working attorneys (working largely pro bono, we might add).  The synoganists remain Trustee James W. Giddens, earning $891 per hour and seemingly doing his best to drag out the proceedings, along with JP Morgan's attorneys, who are "dictating the agenda", according to CCC attorney James Koutoulas. [Update: for an expose of the conflicts of interest arising from Giddens' firm, Hughes Hubbard, vis a vis JP Morgan Chase, MF Global's largest creditor, see this excellent piece by MFGFacts.]

Is it too little too late? We hope not, as continuance after continuance increases the odds that looting of customer funds continues to this day.  In a brief but compelling video (below), Warren E. Pollock of Inflection Points goes head to head with a few journalists outside the bankruptcy court in lower Manhattan, then conducts a candid, must-watch interview with Mr. Koutoulas [if you don't see the video embedded, click the link to the left]:


A few choice excerpts:


at 3:30 in:

Koutoulas: We were the first group to object to JP Morgan's use of the cash collateral.  I think over the weekend, three or four other parties have joined our objection.  And they keep continuing it...I'm going to get up and say, "Judge, there are some issues we have to talk about. We can't just keep continuing this ad infinitum."  One of those is--you probably saw on ZeroHedge--the way that Order is written, it makes it possible...if these [repo-to-maturity] trades are still on, we have to know about it.

Pollock: You don't know if the trades are on right now--normally they'd have to wind down positions.  But they could still be tapping into customer money at this very moment and there's no way to...recognize that.

Koutoulas: And if they did do that...that is the ultimate epitome of enabling someone to fall in love with their trade....These trades bankrupted MF Global, and the fact that there's even a possibility that they could still be on and still be using customer money to back them, it's beyond the pale.



at 5:25 in:

Koutoulas: The problem here is JP Morgan's lawyers are running the show...and they're running the agenda...Judge, the fox is in the hen house.  JP Morgan cannot be dictating the agenda.



at 5:50 in:

Pollock: So that's why you're calling Jon Corzine a chicken on CNN?

Koutoulas: Yes...stand up...where's the money, Jon?


The Outcome:

In the course of the hearing that followed, the Judge asked the CCC to file a motion to formally make its case against the JP Morgan super priority status and the continued trading of customer funds.  A hearing was set for December [corrected: 9], 2011.  Let's hope there's still money left by then.

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ozzzo's picture

Based on my personal experiences, I've been saying for years that the stock market is a rigged game designed to steal money from the middle class and give it to the super-rich, and until recently everyone thought I was a nut. I've seen so many coincidences over the years; sometimes I wonder if I'm the only one. Every time I place a market order (and I mean every single time without exception) I always pay significantly more than the market price when I place the order, and sell for significantly less. Every single time. That's just one example; I've seen lots of evidence throughout the years, but they were always sneaky enough so that I had no proof. What we're seeing now is a very common psychological phenomenon. A successful theif will become more and more bold until he gets caught. Now they're stealing money in plain sight and not giving it back after they get caught. I think OWS is our only hope. If enough people realize that our "elected" government is a scam and a fraud, and stop paying taxes, maybe we can end it before they have us all in concentration camps.

Georgesblog's picture

The fact that people continue to trust brokers with their money while these legal issues are still unresolved is a testimony to gullibility. But then, gamblers still gamble, after the game goes crooked.


Bolweevil's picture

New normal for infamous banksters: hiding. East Hampton isn't as fun when you can't leave the house. Merry Christmas mother fucker.

Freddie's picture

Democrat Jon Corzine = friend of the Islamic teleprompter

WVO Biker's picture

MF Global used to charge some add on futures commissions. Instead of the $0.60 exchange fee and the $0.02 NFA fee they charged customer accounts $10.00 in addition to the commission for every round turn.


Dealkiller's picture

Koutoulas is a good guy...

walcott's picture

that fudgepacking dirtbag was about to fall over.

Hannibal's picture

MF Global customers are fucked!

Widowmaker's picture

Judge Glenn - proving abortions can wear a robe.

Justuce for hire, get your justuce decisions on sale now!  Anyone in the 1% gets a complimentary Pacific Reporter set for show.

Bastiat's picture

MFG Pleading:  Theft of custormer assets is at the very heart of our business model.  If we are not allowed to continue this activity it defeats the very concept of bankrupcy protection.  We request the US Marshals be sent to pepper spray any whiners.

TruthInSunshine's picture

I am perplexed.

In a case like this, the first thing the attorney(s) for the clients having accounts at MF Global should have done is file an emergency motion for a temporary restraining order to prevent MF Global from accessing, utilizing, removing, moving, transferring or in any other manner disturbing those accounts as they stood as of the second of the filing of the bankruptcy petition of MF Global, and a motion to show cause as to why they haven't provided details of where such monies are now residing (which entity and geographic location), who has and has had access to such accounts/monies since (and prior to) the filing of the bankruptcy petition of MF Global, along with a corollary motion to compel the MF Global bankruptcy trustee to provide a detailed accounting of information relating to these accounts (as already stated above).

No sane judge would deny this clearly necessary relief given the very real dangers of waste, commingling, assertion of priority over cash and non-cash assets (including chattel) of the now bankrupt MF Global.

If this is a matter of creditors standing in line and fighting over priority, even if one assumes that any creditor of MF Global takes precedent over retail account holders, the above listed motions could all be granted, and the TRO could also be issued, as well, while things get sorted out, irrespective of insurance issues, such as Securities Investor Protection Corporation (SPI), etc.

Orders consistent with these motions would merely ensure that the status quo ante is maintained while the proceedings regarding MF Global's bankruptcy are sorted out (aka mitigate against improprieties and risk of wasting of monies held in retail accounts), as these risks lead to irreparable harm to those owed money or whom the MF Global trustee does or will owe refunds, monies, etc.

Tom_333's picture

Very accurate description of current businesss model in the U.S. - neber invest there...rather put my money to play in Russia...

willien1derland's picture

Excellent point TiS...I too am perplexed as I cannot understand how any organization can be granted the status of Primary Dealer by the Federal Reserve on 2 February 2011 & notwithstanding the bankruptcy filing on 31 October 2011 could have its books in such disarray! It is inconceivable! I hold several securities licenses including the Series 27 & I cannot fathom such a situation occurring in the span of ten (10) months! 

MF Global had to have been audited EXTENSIVELY prior to being awarded this designation - http://www.ny.frb.org/markets/pridealers_policies.html

Although I have not been officially fitted for my Tin Foil Stetson to date with each day that passes I become more convinced that the MF Global circus must have some incredibly valuable secret to conceal & TPTB need time to ensure that the audit trail is sufficiently skewed...Moreover, that NO MF GLOBAL employee has been charged to date is baffling beyond any reason - Jon Corzine MUST have pictures, information, & videos of some very powerful people to remain free...Just speaks to the bifurcated regulatory & justice system that allows Wall St., K Street, & their handlers on Capital Hill to act with impunity & laugh in the face of EVERY AMERICAN that they are the exception to the Rule of Law.

Widowmaker's picture

Rule of law... now that's a laugh in the face!

TheMerryPrankster's picture

The grand facade will surely burn.

the blind lady justice, turns out to be deaf and dumb as well.

The rule of law turns out to be a mere suggestion

Money talks and justice lies dying in a pool of worthless securities.

This then is the 21st century, laid bare, fraud and corruption as far as the eye can see and yet the proper authorities are missing, last seen counting their bribe money.

If you're not pissed yet, you're not paying attention.

EB's picture

I hear you, but what happened with the customer funds was rather unprecedented and caught everyone off guard.  It wasn't until the second week that the CCC formed on a serendipitous and ad hoc basis.  Given the leg up that the Trustee and JPM got from day 1, things could be worse for the customers.  Unfortunately, they could be much, much better.

With Freeh at the helm and MFG management out, he can waive attorney client privilege and allow MFG trading pre and post-bk into the record.  

Clowns on Acid's picture

Hey EB-

Getting caught off guard ? You mean the friggin geniuses at the CFTC and SEC? They are always caught off gurad..thats how guys like Jon Corzine manage to Steal! Duh ?

Jon Corzine should be the 1st person deatined, questioned and arrested as all involved agree that client funds were co-mingled. Whay hasn't he been arrested? Where is he?

Just what the feck are you trying to obfuscate here?

Freddie's picture

Jon Corzine is a very prominent Democrat and friend of the muslim Oba.  He is above the law.

TheMerryPrankster's picture

Cause its all about the democrats?

Are you a troll?

You do know the sins are deep enough on both sides of the aisles to drown us all?

Bansters-in-my- feces's picture

Does the first name Jon,automatically make you a, Lying ,Idiot,that works for the Masters....?


Jon... Corzine

Jon...???_ _ _

SilverIsKing's picture

Nothing will happen until these folks begin to get their heads bashed in.

Widowmaker's picture

Yep, sipping their teeth through a straw from the curb that hit "God's workers."

Complacency for president, and Dick E. Holder for vice!

surfersd's picture

I want my money. Thirty years in the commodity markets and they my money right out from under me. F#@kers!

Raging Debate's picture

Damn... I am sorry to hear that and I mean it. After the first plunge of the Great Depression it was 34 years until my Grandmother bought equities again and they were in oil. Capone realized he was a piker compared to fractional lending, leverage.

Well, only bright side is we will learn much faster to create honest competition compared to those days. But either way, they do try a man's soul.

WVO Biker's picture

Yesterday my account (leftover from MF) was charged again. Statement reads:

NYL_Allocation_2_ADJ      $$....debited

They took away even more of my money.



Clowns on Acid's picture

Any time in the past where a Broker co-mingled client funds.....the CEO was summarily narrested !!

Justice delayed is justice denied !

Why isn't Big Media all mover this outrageous story of outright theft !!

Where is Jon Corzine, Where is Jon Corzine Where is Jon Corzine Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine, Where is Jon Corzine,

Everybodys All American's picture

Good bank and bad bank. Jon Corzine made sure MFGlobal was the bad bank. Did he step in to assume the role of bad bank to save somone's bad EU trade(GS)? It's high crimes and misdemeanors if he did and it needs to be stated he is a democrat and former Goldman Sachs ceo that has raised money for president Obama.  Some things are beyond the pale and this is white as snow pale. Comingling funds never is allowed and yet an ex Goldman Sachs ceo has been found to have done just that. Is this normal operations at Goldman Sachs to comingle? I sure hope not. Would it surprise anyone though? Anyone?

Chuck Walla's picture

Jonnie "Bags" Corzine isn't seen because he's busy advising Obama on how to make an economy work. He is building on the model state economy of New Jersey and trying to spread the miracle to all the 99%.

Bansters-in-my- feces's picture

More importantly.

Why is Jon Corzine not in jail.???

No Justice Department  in the US of A...????

Must be that "Goldman Get out of Jail Free Card" thingy...

Freddie's picture

If Corzine had been a Republican - it would be on the news 24x7x365 on every channel.   

The RINO Repubs like McLame, Lindsay Graham are almost as bad as the Dems.  Ron Paul for President

Cult of Criminality's picture

JP Morgan..... one of the largest terrorist regimes on the planet

Freddie's picture

Don't forget the Chase at the end of JP Morgan Chase.  Chase Manhattan = Rockefellers.

It's odd that when other banks were alwqays losing money - Chase always semed to make money going back to the 1960s.  They were also always big internationally.

LeBalance's picture

To the tune of "Get'em Out by Friday by Genesis"

Clean em out by Wednesday,

Its the seventh and we'll,

have no more access when the Judge,

closes the door.

So clean em out by Wednesday,

its the least we can do,

a few more mill and we'll say thanks,

to Jon at the bottom of the Hudson.

Deadpool's picture

very very bad bad  men.

WALLST8MY8BALL's picture

December 7, 2011 looks like a day that will live in Infamy! Pearl "Street" Harbour day anyone?

willien1derland's picture

+1,000 --> It would be a glorious use of our military to have them storm Wall Street & eliminate the greatest threat to American Freedom and sovereignty...Start at the NY Fed; then an all out initiative to rid the U.S. of the financial version of Al-Qaeda -->Goldman Sachs, Morgan Stanley, JP Morgan, Citibank, Bank of America & Wells Fargo...decimating America's foremost greatest enemy & true terrorists - the Financial ones...

TheMerryPrankster's picture

no need for overkill, a couple of drones into the server farms, brings it all to crescendo.