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Santelli to Chilton: Will the SEC Serve Itself a Wells Notice Regarding an MF Global Bond Offering?

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Submitted by MFGFacts.com

Last week on February 12th we witnessed a short, but really testy exchange between CNBC floor reporter, Rick Santelli and CFTC Commissioner Bart Chilton.  In the usual blitz fashion, Santelli asked Chilton where was the CFTC on Halloween and why the agency allowed the SEC to dictate policy over the it’s own regulatory mandate?  We wrote about that development on MFG Facts just a few weeks ago.  Chilton demurred and  professed that was not his “understanding of what was going on.”  But he did not answer what did happen.

You can watch it here.

Let’s highlight two important points  that came out of this lightning interview:  Questions on evidence of material documents withheld from the public, which we might hear more about in the next weeks and months. (This was first reported by Bob English on the blog, EconomicPolicyJournal.com, and expanded upon by Mark Melin of Opalesque here.) And that the SEC should send itself a “Wells letter.”

Santelli states in the interview that two Wells notices just went out to bond dealers.  A Wells notice is when the SEC informs an entity that is to be the subject of investigation. It is just a heads up there might be an investigation. These are generally sent when a firm did not make timely or complete material required public disclosures.

Santelli asks, “I noticed this morning that the wells notices went out, and that’s because the SEC said they didn’t give enough information on some bond deals. My next question is if the SEC knew in August which many documents seem to show that the $6.3 billion position existed in MF, a primary dealer, no less! Why did the August issuance of $300 million in new paper from that company not disclose that? And why doesn’t the SEC send themselves to Wells notice?"

Here Santelli is asking why absolutely material information was not disclosed in the offering, and at the same time alluding to the revelations published here on MFG Facts.com and Opalesque that SEC had this information in hand before the bond offering.  So if the SEC knew of the information and knew that it withheld in the offering disclosures, why didn’t MF Global receive a Wells noticed right after the offering?  Or as the SEC also withheld this information, why isn’t the SEC sending itself a Wells notice?

Chilton defers saying he cannot speak for the SEC but agrees that this must be investigated.  In the same breath, he then quickly and defensively brushes Santelli off, stating that this is not how investigations are done.  But Santelli asked about a Wells notice, not an investigation.

Chilton answered: "Two things. first of all, and this little bit is going to sound like a bureaucrat. the sec is the sec. I’m not the Sec. I can’t speak to them. second, these are all issues that need to be looked into. I don’t disagree with you at all. But the way that these things are done, you have an investigation. You develop a case, and then you go forward as you see appropriate."

Why was this exchange important? For the first time we have a Commissioner of a Federal Regulatory Agency stated that because the SEC withheld material information from the public before a bond offering, it must be at least “looked at.”  (He does not go so far as to say investigated.)

Why is this important here?

1.)  Three short months after those bonds were cast into the market, they were worthless and investors lost everything.  If that information was out there, MF Global may not have been able to raise the money they did not deserve from public investors such as state run retirement funds and endowments.

2.) It is yet another demonstration of “regulator capture” where the regulated catch the regulators.

* * *

 

 

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Sat, 02/18/2012 - 22:02 | 2174106 Fozzy Slippers
Fozzy Slippers's picture

I'm tellin ya. It's going to take getting out in the streets and making citizens arrest of these corrupt pos.

Sat, 02/18/2012 - 21:51 | 2174085 BlackholeDivestment
BlackholeDivestment's picture

...the regulators are a complete mockery.

Sun, 02/19/2012 - 01:17 | 2174369 SilverDoctors
SilverDoctors's picture

You've got that right BHD.  Bart Chilton told me today that the CFTC has delayed their meeting to define the word Swap again until April now...and he gives no guarantee that they'll actually meet in April. 
But he's working on it. 
Riiiiiight.
http://silverdoctors.blogspot.com/2012/02/bart-chilton-responds-to-doc-regarding.html

-Doc

Mon, 02/20/2012 - 18:12 | 2178766 taniquetil
taniquetil's picture

Swap n.

 

Def: A contractual agreement in which two parties try to screw the other, and 3 months down the line the American taxpayer ends up paying out to both parties

Sat, 02/18/2012 - 21:21 | 2174044 tom a taxpayer
tom a taxpayer's picture

Was some long-haired blonde standing behind Chilton in that interview or does Chilton need a haircut? 

Sat, 02/18/2012 - 21:18 | 2174039 toadold
toadold's picture

I'm thinking the desperate and angry will start throwing blanket parties before the year is out.

Sat, 02/18/2012 - 20:43 | 2173968 Hannibal
Hannibal's picture

Crooks, goddamn crooks they are. Fucking vomit bastards.

Sat, 02/18/2012 - 20:29 | 2173941 Augustus
Augustus's picture

I was watching the program.

Santelli had that pompous bastard tongue tied and blithering poofter nonsense.

Absolutely fabulous.

Sat, 02/18/2012 - 20:05 | 2173886 rsnoble
rsnoble's picture

My new bumper sticker I just ordered:

"Fuck 'em all 2012. Get the rope."

Will that result in increased traffic violations?

Sat, 02/18/2012 - 20:05 | 2173884 Troy Ounce
Troy Ounce's picture

 

 

Keep asking myself: where the hell are the whistleblowers in a country submerged in fraud and no one of the 310 Million people saw/heard something?

Sat, 02/18/2012 - 18:48 | 2173757 Bansters-in-my-...
Bansters-in-my- feces's picture

You want to investigate precious metals manipulation,you learn about the USA Exchange Stabilization Fund (ESF).

This fund in controlled by the Tres.(little weasel timmy) Secretary.and can borrow interest free money,has trillions of its own cash and cash equivalants(gold) can use USA,IMF ,SDR's as collatoral for even more money....

And answers to no one....

By LAW he has special powers to manipulate gold.

Don't believe me...?

Go to the USA govt site for the ESF and read away my friends....

for strong stomachs only...

Sat, 02/18/2012 - 18:29 | 2173716 mendolover
mendolover's picture

Nice!  Rick S. might want to give Judge Napolitano a ring to find out what his next step should be.  haha

Sat, 02/18/2012 - 17:51 | 2173662 Reese Bobby
Reese Bobby's picture

As Jamie Dimon always says, "Money isn't everything.  There's power as well."

Sat, 02/18/2012 - 17:21 | 2173607 eddiebe
eddiebe's picture

Pardon me if I don't hold my breath.

Sat, 02/18/2012 - 17:01 | 2173536 Atlantis Consigliore
Atlantis Consigliore's picture

They re not laughing with you suckers, the regulators, liars, lawyers, the management, fiduciaries,  all created a sipa bk, and made your seg funds, all Counterparties

under the 2005 BK act,   the banks all got it, and are laughing at you.    its its its all....... "Vaporized"  and all seg funds are comingled as general creditors under swap;/derivative

BK laws.....'NOTHING TO SEE HERE, ASSHOLES,  MOVE ALONG NOW.....MOVE ALONG!'"

http://youtu.be/zdJ8x6lyrfo

Sat, 02/18/2012 - 16:54 | 2173534 Zero Govt
Zero Govt's picture

"It is yet another demonstration of “regulator capture” where the regulated catch the regulators."

Brilliant

...and well done Ricky for asking the Big Question... the SEC are f**ked on this one 

Wells Notice boomerang ...'snip'

Sat, 02/18/2012 - 16:14 | 2173455 max2205
max2205's picture

Three months....and.... It's gone.

Please don't ask the SEC any questions except what the latest hot porn site.

Mon, 02/20/2012 - 18:20 | 2178772 taniquetil
taniquetil's picture

You are making the foolish assumption.

 

At the SEC, there's no such thing as the latest hot porn site. They just watch all of them (no, seriously, if you read the original report some of the sites accessed are for some really weird shit. it's like they ran out of regular porn and had to go hunting elsewhere, including popular websites like scatmen.com, erectionphotos.com, and anal-sins.com).

Sat, 02/18/2012 - 16:10 | 2173433 Cursive
Cursive's picture

2.) It is yet another demonstration of “regulator capture” where the regulated catch the regulators.

 

This post should have begun and ended with this quote alone.  Don't lose any sleep waiting for justice to be served.

Sat, 02/18/2012 - 17:07 | 2173551 Zero Govt
Zero Govt's picture

justice won't be served, they own/are the New York Justice system ..it's been the same in NY for a hundred years

but it is another nail in the coffin

Nobody in their right mind would/should do business in NY or with the big bust(ed) NY firms

Money is already flooding East ...every NY Gangster sting, every US Govt or Regulator abuse turns the tide into a tsunami

the NY powerhouse is crumbling brick by brick, it runs now on taxpayer bailout money afterall 

 

Sat, 02/18/2012 - 16:05 | 2173415 non_anon
non_anon's picture

follow history and this is nothing new

Sat, 02/18/2012 - 15:58 | 2173376 gookempucky
gookempucky's picture

chilton the schill reminds me of a WWF promoter with 2 skanks by his side---what a schumkkkkkkkk.

Sat, 02/18/2012 - 15:54 | 2173363 ebworthen
ebworthen's picture

A big surprise for me was to learn that "Lind-Waldock" was part of MF Global.

If you are a CNBC watcher you know there was a flurry of Lind-Waldock advertisements there in the past couple of years.  They focused on "diversified portfolios" of PM's and some currencies and used the reputation of the old firm now swallowed by MF Global to bring in investors.

Poof!

Pretty good timing to suck in a bunch of individual investors using an old name then use their money to speculate on worthless bonds.

I can believe that no one is cuffed or in jail, yet I am still astounded that computers and records have not been seized and that the entire MF Global debacle hasn't taken on Enron status.

Pathetic!

Sat, 02/18/2012 - 16:08 | 2173424 navy62802
navy62802's picture

Simple answer - I think the regulators are afraid of opening pandora's box.

I'm certainly not going to sit here and try to defend regulators. I think they have failed miserably, whether it was on purpose or not. But we should acknowledge that the rabbit hole is deep. Once you jump in, there's no going back.

Sat, 02/18/2012 - 19:50 | 2173850 RockyRacoon
RockyRacoon's picture

When it comes to our government’s collective refusal to aggressively investigate — much less prosecute — Wall Street crime, one prevailing line of apologism implies that it’s all about resources. As the general fable goes, Wall Street is so sprawling and so lawyered up that public law enforcement agencies simply don’t have the resources to make sure justice is served, especially at a time of budget deficits. In this story, Wall Street is not simply too big to fail; it’s too big to even police.

The motivation for such myth-making is obvious: It wholly absolves elected officials for their decisions to let their financial-industry campaign contributors off the hook. Yet thanks to recent events, the whole “Too Big to Police” rationale is being exposed for the farce that it is.

http://www.salon.com/2011/12/06/why_no_ones_investigating_wall_street/

Sat, 02/18/2012 - 18:33 | 2173725 Boxed Merlot
Boxed Merlot's picture

Simple answer...

 

Teneo.

 

The principle of this company protecting Corzine is married to the US Secretary of State, who is incidently the head candidate for leading the world bank. 

What could possibly be wrong?  

Sat, 02/18/2012 - 15:54 | 2173353 AC_Doctor
AC_Doctor's picture

Like it takes 3 fucking years to complete a silver manipulation investigation-ya right, the little people shouldn't question them.

Sat, 02/18/2012 - 16:05 | 2173413 hangemhigh77
hangemhigh77's picture

No shit, I mean we have Bart Chilton telling us how an investigation is done?  WHAT has the CFTC investigated???  NOTHING.  The last thing I heard about the CFTC was a judge who retired and blew the whistle regarding the fact that the CFTC was actually SUPPRESSING investigations.  Chilton is the controlled opposition, acting like he's appaled at any silver manipulation that might be occuring but gee he just doesn' know and is "investigating".  Maybe right beforre the world crashes into the sun he will tell us what he found out. What an ASSHOLE.  And, his hair looks like SHIT. Get a friggin haircut you dolt.

Sat, 02/18/2012 - 17:17 | 2173593 Zero Govt
Zero Govt's picture

CFTC : Chicago Fucks The Cheapseats

Sat, 02/18/2012 - 15:46 | 2173327 lolmao500
lolmao500's picture

Chilton = Shill Clinton?

Sat, 02/18/2012 - 15:50 | 2173343 disabledvet
disabledvet's picture

Aha! But did you know...in Clinton, NY is Hamilton's College????!

Sat, 02/18/2012 - 15:41 | 2173312 digalert
digalert's picture

I saw the Chilton charade on CNBS. At the time the sounds were gurgling from his pie hole, I thought he's corrupt, complicit, criminal and needs to go to jail. Oh and Bart, don't cut your hair, your new cellies will love you.

Sat, 02/18/2012 - 17:24 | 2173611 Conax
Conax's picture

+ a greenie..

He's the purty-boy public face of the CFTC, there to put us at ease I suppose.

The hair, though- he's either going for the Thor look or maybe Hulk Hogan. All these people seem very odd. Gensler looks like an invertebrate.

Sat, 02/18/2012 - 18:51 | 2173679 Manthong
Manthong's picture

<<<<< A hack. 

<<<<< Concerned regulator, disposed towards acting against corruption and fraud.

Sat, 02/18/2012 - 15:37 | 2173299 Joebloinvestor
Joebloinvestor's picture

When Gensler is indicted and prosecuted my faith in the system will be partially restored.

The LYING little weasle is involved up to his eyeballs.

Sat, 02/18/2012 - 15:53 | 2173356 disabledvet
disabledvet's picture

Immediately ran off to London to "try and buy something." BUSY, BUSY, BUSY! LOT'S A WORK TO DO! (course then the Big One--NYSE/Euronext-- was rumored to be interested in the LME as well. Perhaps if they brought back pork-bellies instead of just plain pork?)

Sat, 02/18/2012 - 15:34 | 2173286 NorthenSoul
NorthenSoul's picture

Everyone (except the regulators, of course!) knows where is MF Global moolah. Alas, Obuster and Timmy Gangster are really not interested to blow off Jamie "Da Bully" Dimon's career. Too much moolah of their own they don't want ot see go the GOP way.

 

So, sacrificing 1.6 billion dollars of investors' money is considered a small political price to pay. Talk about total idiocy: How many times will the authorities do that kind of shit until big investors decide the US of A is NOT a safe place to invest?

 

Sat, 02/18/2012 - 15:59 | 2173380 disabledvet
disabledvet's picture

Call Jamie Dimon...ask him to testify about the 200 million in his bank. End of story. if the interest here is to find out where the money went of course...
http://www.youtube.com/watch?feature=player_detailpage&v=labL_KAD2rk
damn malice in the palace 'll getchya everytime.

Sat, 02/18/2012 - 23:46 | 2174248 shuckster
shuckster's picture

Wouldn't be surprised if Dimon was shorting Lehman and Co while they were working on the bailout 

Sat, 02/18/2012 - 18:26 | 2173711 Popo
Popo's picture

There will not be an end to fraud until there is a palpable sense of personal fear felt at all levels of the ponzi. Fear. Real fear. Fear of incarceration. Of clawbacks. Of fines which impoverish. Even fears of a violent restless public.

At this point there is *zero* fear. None. Zilch.

In other words, we haven't even started to make progress.

Sat, 02/18/2012 - 19:45 | 2173843 RockyRacoon
RockyRacoon's picture

You're saying that Madoff needs a few roommates.  I'll second that notion. 

Sat, 02/18/2012 - 15:38 | 2173301 uno
uno's picture

with the record low volume and most of that from the bots, big investors (not insiders ie corrupt cronyism) have moved on.

Sat, 02/18/2012 - 18:13 | 2173691 Amish Hacker
Amish Hacker's picture

Ditto precious metals investors in the COMEX. Other fields, other grasshoppers.

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