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Tough Questions for MF Global, Conflicted Trustee Giddens & SIPC President Harbeck
Guest post by MFGFacts.com
All eyes will be on the Senate Agriculture Committee Hearings [today] at 10:00 AM (EST). We hope to be spared the spectacle of representatives using the opportunity for insipid questions or homespun stories on immigrant grandma’s advice to “Always do the right thing when no one is looking, or starting a question with a story: “I was recently at an Eagle Scout ceremony and…” And we also really hope these hearings will be conducted with real questions and follow up on the mysteries around the MF Global bankruptcy.
The first panel for questioning will be customer representatives from the Agricultural economy such as from the Mid-Kansas Cooperative Association, a Grain Broker and and an individual farmer. This will establish that is not the bankers and financial community deeply damaged by the apparent crimes around the MF Global bankruptcy, but the core of the agricultural economy and thousands of individuals very far away from New York or Washington who depend on the complete integrity of hedging services and brokering, regulators and the handling of client properties.
The second panel will host Mr. Corzine, Mr. Steenkamp, MG Global CFO and Mr. Bradley Abelow, COO and President. All have had weeks of drilling by an army of lawyers in the art of saying a lot but answering nothing. Will the Senate Ag. Committee spend their limited time thanking and appreciating them for appearance and telling us stories about themselves, or with ask questions in search of answers? For Messrs. Corzine and Steenkamp questions on, for example, who was the affiliate of the Euro debt repo-to-maturity trades performed by MF Global Inc? Or is it possible that outflows from MFGI are still being made to MF Global Holdings as approved by the court on October 31st?
The media will zero in on Mr. Corzine and the MG Global Board. And on first glance this seems to be what the bankruptcy is about: Errors or possible malfeasance inside MF Global. To this end, the Senate will ask questions to understand where the company failed and what regulatory oversights could be improved. But to restore faith in the futures markets, citizens must also be assured of the workings of the SIPC Bankruptcy procedure. After all, it was the CFTC and SEC decisions hurling MFGI into a SIPC receivership that ultimately resulted in the sequestering and freezing of customer property.
Right now MFGI and all its assets and much client property remain frozen and under the control of the SIPC Trustee, Mr. James Giddens, who will be on the third panel. And just as the Senate hearing goes on, the court will be exploring if there has been a violation of Federal Rules of Bankruptcy Procedure. The Senate cannot ignore this background development.
By Monday afternoon, Giddens must, under recent court order, have already disclosed more details of his work for JP Morgan Chase & Co. and PricewaterhouseCoopers LLP, along with any other possible conflicts [update: posted below]. Judge Glenn will determine if the SIPC-appointed Trustee can handle the case disinterestedly, or even at all. With the possibility of court removal – if even remote – this appearance of grave conflicts will be hanging over Mr. Giddens head during the Senate hearings. Will the Senate dare ask about the basis of ongoing confusing public information released by Mr. Gidden’s office? Will they ask about his experience and understanding of the futures industry? Will the Senate ask why customer positions were liquidated, and then re-opened with a new broker, but with inadequate margin? Or how it is that customers with long options (often used in crop hedging) were forced to liquidate or re-purchase the position? Will the Senate ask if Mr. Giddens understood the implications of the court orders that resulted in market disruption? Will they ask the exact dollar amount of the work his firm billed to PcW, MF Global’s auditor, over the last five years? Will we hear if Mr. Gidden’s provided the court a full and proper 2014(a) disclosure as required? Will we learn about his 30 years working closely with SIPC?
For a full understanding of the MF Global bankruptcy, these and many other questions must be answered.
* * *
EB: And now, from the lengthy statements filed by the liquidation trustee James W. Giddens and his counsel James B. Kobak, Jr., both of the law firm Hughes Hubbard & Reed LLP (HHR), where many pages are spent revealing the firm's limited exposure to JP Morgan, glossed over is the most relevant fact: that MF Global's auditor, PriceWaterhouseCoopers, is not only a material revenue center for HHR ($21 million over two years), but HHR's very auditor! If this is not grounds for a determination of "interestedness", then we don't know what is, especially in light of the MF Global offerings that were conducted backed by PwC opinions. (See Teri Buhl's "Jefferies Bond Trader Claims MF Global Lied to get Bonds Issued".)
Statement by Giddens:
Statement Corrected Trustees Statement - Mg Statement
Statement by Kobak:
Declaration of James B Kobak Jr in Sup - Main Document
And the memorandum of law filed by the completely useless SIPC, where we learn that the entity (whose sole mandate is to resolve failing brokers) had done exactly nothing until the day of the MF Global bankruptcy itself. Citing exigency as cause for selection of a liquidation trustee (Giddens) on the heals of an OIG report that found his fees in the Lehman liquidation were excessive, will not fly. Exactly why Giddens would then be placed on the SIPC reform committee is another question to be answered (presumably so he could recommend his hourly rate be lowered from $891 to $819).
Response Memorandum of the Securities Inves - Mg Response
Fin.
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Jon Corzine's reconcile guy had a fat finger and his 1-2-3 worksheet columns went a-wry. Oops!
Its a rougue trader or an Iranian hack.
No it is a Democrat looting job for the 2012 election. The muslim needs walking around money. Democrat Bill Clinton was looting MF Worldwide to the tune of $50,000 a month.
Where is judge Judy when we need her?
Judy wouldn't get a look-in... New York is the Parasite Club.. judges don't get appointed on merit, you need to be a 'member'
100 years of NY judicial stitch-up jobs and un-prosecuted cases of big financial crimes can't be wrong
Remember their faces.
i thought you said 'feces'.....my bad
Why do financial matters seem to get treated differently under the law?
Ans. Because the law is separated into Common Law Courts and Courts of Equity.
Equity*: law, a) resort to general principles of fairness and justice whenever existing law is inadequate b) a system of rules and doctrines, as in the US, supplementing common and statute law and superceding such law when it proves inadequate for just settlement c) a right or claim recognized in a court of equity.
Note c), above. It is the arbitrary justification by financial elites, who write the law, to enable handling outside the Common and Statute law, so that their influence prevails. That's how elites can usually maneouver to escape prison-time.
Thus, Courts Of Equity can rule based of "fairness" limited to just the direct ["obvious"] parties in the dispute, neglecting the indirect and real impacts/harm on the general public whose input into the matter is walled-off.
Courts Of Equity can be used to block/protect ThePowersThatBe from strong legal penalties. They act as a form of backstop*.
*backstop: a fence, screen etc, especially one behind the catcher in baseball, serving to stop balls leaving the playing area. [Curious, aint it?]
This article while well intentioned does display some ignorance re bankruptcy and clawbacks. A clawback is essentially called a preference action. I don't have my redline version of the BK code infront of me but I assure you that clawbacks exist as part of the code. Meaning it was legislated and not merely a part of judge created common law as the author suggests.
Will they ask Corzine how it's possible to NOT know where the American account holders money is when the Canadian account holders had all their money returned within 10 days of the collapse? Probably not a chance, right?
right. sorry to say, but the best we can ever except is a nolo contendre redux.
Have the terms Hypothecate, or Re-Hypothation come up in ANY senate or house hearings? I'm wondering what the ring-fence of questioning is?
**Just to clarify, I'm hearing these terms from Sen. Debbie Stabenow now** Jon and the other stoo-er, Officers say they haven't heard anything like that.
This will be more of the same...
Absolutely nothing - from one CEO to another in Congress.
Nobody saw it coming, the markets never lie, and the world will fall apart if we don't overlook the law, collusion and special interests to pay record bonuses (followed by a mission accomplished celebration in private suites afterword). These guys play soggy-biscuit (now ookie cookie) with your petty Constitution.
Shame as it ever was -- hope and change where change is a mere gimmick for stupid fucks that believe in it and get skinned alive.
In this article by Martin Armstrong, he tells us why the fix is in on this case because of the corruption in our judicial system. He even give some background on the judge who is going to preside in the case and why/how he will rule.
http://www.inflateordie.com/files/MF%20Global%20Disaster%2012-09-2011.pdf
"..........
This "discretion" is why MF Global customers are getting cheated! The rights, privileges, and immunities of ALL those customers who simply had an account at MF Global are about to get really screwed by the presiding
Judge Martin Glenn creating whatever it is that he thinks is fair (discretion), not what the law says since he presides in equity (chancery). In the United States, Congress vested both LAW and EQUITY in the same courts. This has undermined everything. That means that Congress can pass a law, and the judges do not have to obey the law at all calling it their right of "equity" to determine if it is what they would write. In MORRISON v. NATIONAL AUSTRALIA BANK LTD., 558 US – (6/24/2010) the Supreme Court overruled ALL securities law of the New York Second Circuit because they were applying the law based upon what they think Congress would like them to do. They have been creating "judicial law" in securities since the beginning. This is so anti-Constitution and against the principles of any "democracy" because it eliminates the people entirely. This becomes a judicial dictatorship no different than Gaddafi.
There is no actual law authorizing a "
clawback" but the NY court will create whatever it wants. The New York Bankruptcy Judge is Martin Glenn who was the very lawyer for the Receiver in the case of Princeton Economics who defended Republic National Bank and HSBC. In this case, it was Glenn who argued for the right of judges to imprison anyone for life until death without lawyers or trial by jury. The New York Law Journal on January 7, 2002 reported that Martin Glenn argued for the contempt and reported it was starting to "resemble a merry-go-round that never stops."
When I offered evidence that Republic had stolen the money using it for its own trading the
SAME as MF Global, Glenn and his team replied that they "believed" Republic’s story and refused to allow ANY suit against Republic. They were clearly trying to take everything for the banks and to cheat the Japanese. I then had to do interviews with the Japanese press to tell the Japanese that Republic took the funds and they should file suit in New York. Had they NOT filed in New York, Martin Glenn as the lawyer for the receiver would have protected Republic National Bank to the death and aided them is keeping over $1 billion dollars, which seems to be going on with MF Global. If I was guilty, Republic kept the money. That is what he was insisting.
This time, instead of being the lawyer defending the banks, Martin Glenn is now the judge presiding over MF Global! Do you really think he will defend the clients or the NY banking community? In another case his law clerk even wrote part of the brief of an adversary before Judge Glenn. He was asked to recuse himself and refused, since judges can violate every sense of decency, morality, and sit in judgment over themselves. If they were truly unbiased, then hand the case to someone else. They refuse to recuse themselves because they want the case which confirms the bias in a self-fulfilling prophecy. This is far too corrupt.".........
http://www.nysb.uscourts.gov/opinions/mg/104370_923_opinion.
Judge Martin Glenn creating whatever it is that he thinks is fair (discretion), not what the law says since he presides in equity (chancery). In the United States, Congress vested both LAW and EQUITY in the same courts. This has undermined everything. That means that Congress can pass a law, and the judges do not have to obey the law at all calling it their right of "equity" to determine if it is what they would write. In MORRISON v. NATIONAL AUSTRALIA BANK LTD., 558 US – (6/24/2010) the Supreme Court overruled ALL securities law of the New York Second Circuit because they were applying the law based upon what they think Congress would like them to do. They have been creating "judicial law" in securities since the beginning. This is so anti-Constitution and against the principles of any "democracy" because it eliminates the people entirely. This becomes a judicial dictatorship no different than Gaddafi.
----------------------
Oh, you think Judge Martin Glenn is corrupt? Well, take a look at a case he closed out a few months ago called "Bucephalus Alternative Energy Group, LLC vs Annie Chan". There were two 2010 cases under his charge (1) A bankruptcy proceeding and (2) an adversarial proceeding against Annie Chan (a CA resident and Korean native who lost $940,000 to the Bucephalus scam) and an additional two cases in District Court (in NY and CA) that precede the bankruptcy filings from 2008-2010.
The bankruptcy case was stalled in 2011 because the "adversary" (Investor Chan) would not sign a "settlement" agreement where she got "nothing" and Bucephalus gets to "keep" everything ($940,000). A friend of a friend reported the alleged bankruptcy fraud to Martin Glenn in September 2011 (see the docket entries in the Bucephalus case, not more than a few months old) and Judge Glenn threatened to SANCTION that person (a well known whistle-blower). The whistle-blower didn't give up, kept investigating the alleged fraud and reported EVERYONE (The Trustees, The Lawyers and the owners of the "alternative energy" gropu) to the Executive Office for U.S. Trustees in Washington D.C. (see the docket history) and now the lawyers for Bucephalus (Bruce Baldinger, Esq., and Howard Teichman, Esq - both from Morris County New Jersey) are under investigation by the Executive Office for U.S. Trustees in D.C.for allegedly architecting a $30,000,000 bankruptcy fraud.
Perhaps criminal charges will be filed against the perpetrators of the "Alternative Energy" group personally and perhaps their lawyers will get swept up in a criminal prosecution case that results in disgorgement of ill-gotten gain and/or restitution, or perhaps stripping someone of $1,000,000 by claiming a fraudulent "valuation" of $30,000,000 is not big enough or important enough for anyone to do anything about. Nobody knows what is going to happen but the Feds in D.C. are certainly on the case - we continue to hope and pray they are.
We need a Judge Roland Friesler Jr. to both question and judge these guys.
govt owns the people as slaves, simple as that.
http://expose2.wordpress.com
Martin is a whiner. If the courts are merely meant to rubberstamp laws, then there is no reason for a judiciary. This concept is as fundamental as jury nullification or prosecutorial discretion... if something stinks, then it's the last chance we have to ensure justice is properly served. The other issue is that equitable redress is generally ONLY available to an aggrieved party when a remedy at law is insufficient or unavailable... AND when the aggrieved party has not stepped into the myriad of equitable defenses, e.g. unclean hands or laches.
Yes, sometimes, there is an issue with conflicts given it is the judge who largely gets to decide whether he or she is capable of hearing a case... I think the best rule is to ensure that there is no appearance, whether founded or not, of impropriety... the problem, of course, is that throughout most of america, there are not many judges and they have plenty of business dealings of their own and have been members of their respective communities all their lives... the rules exist out of practicality... there is not a perfect alternative... we simply chose the one that actually works most of the time... think triage.
Macho Man - were you gay like the Hulkster and his boyfriend Brutus Beefcake? The Hulkster's ex wife said they were queer boys.
I don't know if you are familiar with Martin or not but he has good reason to be a whiner. Spending 7 years in jail without trial on a trumped up contempt of court charge because he wouldn't turn over his computer model to the FEDs, to say nothing of his attempted murder by beating while in custody. You'd probably be a little bitter yourself.
When's the last time you saw jury nullification being used? Did you happen to catch the article a week or so ago where a guy standing outside the court (I think it was the federal court in Chicago but don't really recall) handing out information to passersby on jury nullification was arrested and charged with jury tampering because a potential juror might have been handed the information? That doesn't sound like the judicial system embracing that particular remedy does it?
I'm familiar with martin... it wasn't the computer model that got him in hot water, per se... any comment on the gold, antiquities, et al? His problem is he thought he was part of the club... he was not. And that's not something you need to be wrong about.
As far as jury nullification, just go to traffic court lol... you'll see it every day. It's not meant to be an all day, every day issue... it's meant to be a safeguard... where you see it being used the most is the area of the judiciary that needs the most work...
great article ...http://www.nytimes.com/2011/11/28/nyregion/brief-details-jury-nullificat...
On Bloomberg this morning they said that every democrat on the committee received campaign contributions from Corslime.
Does anyone expect anyone in government to do the right thing anymore?
Only by accident or if its in their best interest.
And in the end, that is what really matters. The public mind is now demoralized. Our leaders have undermined the foundation of the social contract. They have made a mockery of the rule of law. They have murdered justice. Their mindless depravity is naked before the world.
There are many different variations on what constitutes "the right thing". If the definition is set to "make sure the sheeple are not aroused", the answer is yes. If the definition of "the right thing" is set to "act within the bounds imposed by the Constitution" or "do what restores property rights and individual liberty" the answer is clearly no. Since individuals can, and do, disagree on what is right or on what is good for the people this sort of question is misguided. I suspect most on ZH would say that the TBTF banks should have been allowed to fail, but how many would extend that to individuals?
I would rephrase the question to this: does anyone expect the government to adhere to the law? If not, what do we, the people, do about it? I remember Barry Goldwater being lambasted by the MSM for suggesting that moderation in the pursuit of justice is no virtue. Does that apply in this situation? Does anyone care?
Hello? Is anyone out there?
Senate panels vs complex financial products!...Is this any different than having Michelle Bachmann or Nancy Pelosi grill NASA on cold fusion? They would have no idea what they are talking about, but will think they do just for the cameras. Corzine and co will dance around their ignorance with well prepared lawyer bullshit answers!
Senators are a fuvking joke.... as are almost all politicians and lawyers-- as are almost all AGs and the MSM ---we need vigilante justice with a bit of collateral damage thrown in.
Will the Senate step up and ask the tough questions, like why is a futures firm being liquidated under securities law and by someone with no experience with futures, whose firm shares MF Global's auditor?
No. They won't. That might hurt their chances of getting re-elected. Much better to ask soft questions and see their campaign fund contributions increase.
Absolutely right, they might as well ask the Christmas party menu questions:
Are you coming to our party, Mr. Corzine?
Number of guests you are bringing?
Chicken, Steak or Salmon?
Potatoes, Beans or Fries?
Ranch, Italian, or Thousand Island?
Anything else could comprimise recovery or re-election -- that part is certain!