Apparently This MF Global "Clusterfuck" Does Not Deserve Criminal Charges

Tyler Durden's picture


We salute the CFTC for finally, if belatedly, doing the right thing and going after Jon "the bundler" Corzine. However, we wonder, just how is the following documented exchange between Edith O'Brien, MFG's assistant treasurer, and some MF Global employee, not considered crime-worthy by Eric Holder? Or is the US Attorney General too busy to answer, having to come up with his own alibi to avoid going to jail for lying to Congress under oath?

From the MF Global Civil, not Criminal, Complaint

Just prior to 6:30 p.m. ET, O’Brien told Employee #2 on a recorded telephone line that the Firm would not be in compliance with customer segregation rules because funds were not being returned to customer segregated accounts:

O’BRIEN: It is a total clusterfuck . . . . They have to move half a billion dollars out of BONY to pay me back . . . . Tell me how much money is coming in and I will make sure it gets posted. But if you don’t tell me, then tomorrow morning I am going to have a seg problem . . . . I need the money back from the broker-dealer I already gave them. I can’t afford a seg problem.

At approximately 6:45 p.m. ET, O’Brien also told Employee #2 on a recorded telephone line that she was “on the phone with [BONY] trying to negotiate something right now. Otherwise we are going to be underseg.”

O’Brien was able to get a portion of the customer segregated funds returned to customer segregated accounts, as BONY agreed to transfer $325 million of funds from MF Global’s proprietary operating account at BONY to a customer segregated account that MF Global maintained at BONY.

O’Brien was aware that, as of the time of this BONY transfer, MF Global had been unlawfully under-segregated during the day. Even with the $325 million transfer back to a customer segregated account, MF Global remained under-segregated.

At approximately 11:30 p.m. ET, referring to transfers from customer segregated accounts to MF Global’s broker-dealer division, O’Brien sent an email to an MF Global employee titled “Heads up my projection,” which stated: “Due to large B/D client wires we could be negative seg tomorrow AM.”

* * *

Corzine knew that various encumbrances and impediments on these $602 million worth of assets made them not immediately available for the Firm to use to meet its cash needs. In fact, acknowledging that these assets were restricted or not as liquid as cash, Corzine, in a recorded conversation, referred to them euphemistically as the “moral equivalent” of cash.

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Thu, 06/27/2013 - 15:11 | 3700379 Midasking
Midasking's picture

Why aren't these people in jail? Oh yeah we have suspended the rule of law

Thu, 06/27/2013 - 15:14 | 3700401 IndicaTive
IndicaTive's picture

We have a legal system. Not a justice system, Shirley.

Thu, 06/27/2013 - 15:15 | 3700411 Dr. Engali
Dr. Engali's picture

We have an illegal system. Not a justice system, Shirley.



There I fixed that for you.

Thu, 06/27/2013 - 15:18 | 3700429 disabledvet
disabledvet's picture

apparently "smoking gun" is just a figure of speech after all.

Thu, 06/27/2013 - 15:29 | 3700484 Unprepared
Unprepared's picture

hey, it's just tobacco. All legal.

Thu, 06/27/2013 - 15:36 | 3700511 Manthong
Manthong's picture


now.. about that layered graphics file posted as an official government birth document..

Thu, 06/27/2013 - 15:58 | 3700614 gmrpeabody
gmrpeabody's picture

There must be a special lamppost somewhere waiting for our AG...

Thu, 06/27/2013 - 16:49 | 3700878 Buzz Fuzzel
Buzz Fuzzel's picture

where there is no justice there will be no peace

Thu, 06/27/2013 - 17:49 | 3701097 Richard Chesler
Richard Chesler's picture

Obozo's banana republic of America is a country operated as a commercial enterprise for private profit, effected by a collusion between the State and favored oligopolies, in which the profit derived from exploitation of consumers is private property, while the debts incurred thereby are a public responsibility. Such an imbalanced economy remains limited by the uneven economic development of town and country, and tends to cause the national currency to become devalued paper-money. Such government by thieves is a kleptocracy; such a kleptocratic government is manipulated by corporate interests, and functions mostly as ceremonial government that is unaccountable to its nation. The national legislature is, in effect, for sale, influential government employees illegitimately exploit their posts for personal gain (by embezzlement, fraud, bribery, etc.), and the resulting government budget deficit is repaid by the country's working people who earn wages rather than making profits.

Thu, 06/27/2013 - 18:03 | 3701154 Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

I want to thank ZH for getting all pissed off again over this fucking joke.  And to think they locked up Martha Stewart while this asshole will never see the inside of a courtroom.  FUCK!

Thu, 06/27/2013 - 18:21 | 3701204's picture
Mr. Gower cabled you need cash. Stop. My office instructed to advance you up to twenty-five thousand dollars. Stop. Hee-haw and Merry Christmas. Sam Wainwright.
Thu, 06/27/2013 - 20:22 | 3701543 DeadFred
DeadFred's picture

My memory is a little hazy here. Isn't this the money they said just "vaporized"? Anyone seeing any FBI investigators in hot water over that? Oh, didn't think so.

Thu, 06/27/2013 - 22:01 | 3702006 nmewn
nmewn's picture

Even if he see's the inside of a courtroom and is convicted, on O'Barry's last day in office, Corzine will receive his insurance payout.

From the Oligarch Trust & Life Company.

Thu, 06/27/2013 - 21:04 | 3701714 Bringin It
Bringin It's picture

Richard - great post.  I just want to point out that re. The national legislature is, in effect, for sale, influential government employees illegitimately exploit their posts for personal gain (by embezzlement, fraud, bribery, etc.)

They are upfront about the right they gave themselves to front-run markets.

Thu, 06/27/2013 - 21:08 | 3701751 Alexandre Stavisky
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Little off topic but one must remember.  80 years ago a combined allied endeavour in a few years diverted industry to such success that the waves of sea and cumulus high above were filled with craft of destruction to smash imperialism, fascism, expansionism and a NEW WORLD ORDER was born.  Simultaneously almost Bretton Woods.

In our quiet corners of the world we don't see skies and seas full of iron filling space with leaden spittal.  However, we've a much more sophisticated, much more concentrated and highly funded war machine.  It lives in the higher realms of confidence and the unseen.

Do not underestimate the resolve of the politico-banking-mind control multimedia sort.  Most ZH's are long past first discovery of the original sins of fiat and fractional reserve, coin clipping, and the Large and Small Frauds in statecraft.  But the same ennervating powers that supplied an allied crush of man and material is ever larger and arrayed against any true EQUITY left in the world.  You see, and clearly, the entire self-levitating machine require constant tribute in the form of REAL SURPLUS.  Not the funnybux, not the leverage conjured from thin air, not the fair-weather promises to pay, not the factoring upon the extraction from the human animal, but real saved surplus from sweat on the brow invention, labour, setting aside.

This system has geared itself so that any REAL goodman or woman who produces for neighbor to profit, but who bypasses the traditional liquidity route depositing in the bank or equivalent, and who presumes to make himself sovereign or APART--throws a spanner into all that gearing.  When leverage is allowed to exceed even 10:1 when the productive leave the scheme, it exponentially guts the beast.  It is the last freeman act to preserve liberty.  This horrible creature created by tacit participation by all citizens of all nations who is far worse than the Jekyll Island beast, cannot stand the shun and walk away.

Deprive it of capital, deprive it of your savings, deprive it of your hard-earned, and each deprivation is exponentially multiplied to the detriment of its balance sheet.

It can and must die, but only by active everyman participation which strikes at its belly by contravention of its rules and the bypass of its appetite.

Starve it of capital, starve it of your contribution.  Some day as it dies another great rebirth of freedom may come.  Another golden age when men and God combine to invent and enlarge upon all the great bounty of the planet.  The gearing may work toward your greater benefit in that system.  What exists now takes such dear tribute, that there is no escape velocity from its morbid gravity.  You see now the lands of setting suns and dimunition of ability and creation.

In the other system lies a gearing or leverage whereby contribution is magnified, industry amply rewarded.   It no longer exists and especially not so in the Land of the Debt Donut, and the fro bro of doubtful provenance.   A hard rain and rightful purge could restore and could be done without violence.  Keep your substance from their patterned plunder, withhold and deploy ONLY for GOOD, nay GREAT purposes.

Thu, 06/27/2013 - 22:08 | 3702046 Oh regional Indian
Oh regional Indian's picture

Superb thoughts and writing Alex S.


Thu, 06/27/2013 - 17:45 | 3701085 wee-weed up
wee-weed up's picture

The most corrupt Administration in all of American History! Period!

That picture above says it all.

Thu, 06/27/2013 - 18:24 | 3701216 TrustbutVerify
TrustbutVerify's picture

And yet those getting government checks (SS, welfare and salary) won't upset the Obama applecart - a majority by now...or close to it.  

America has been bought off. 

Thu, 06/27/2013 - 18:59 | 3701299 Oleander
Oleander's picture

If your child qualifies for free lunch you qualify for reduced Comcast Internet. $9.95 a month and a $150.00 laptop is available too. 

Thu, 06/27/2013 - 19:32 | 3701385 LetThemEatRand
LetThemEatRand's picture

I'll venture a guess that 90+% of American citizens do not know how John Corzine is.  Of the 10% who do, 1 or 2% understand this story.  We're all 1%'ers now!

Thu, 06/27/2013 - 20:30 | 3701573 JohnnyBriefcase
JohnnyBriefcase's picture

Oh, fuck yeah!


Where are my complimentary hookers and blow?

Thu, 06/27/2013 - 20:40 | 3701606 FEDbuster
FEDbuster's picture

You have to win an election to get that prize.

Thu, 06/27/2013 - 21:19 | 3701813 JohnnyBriefcase
JohnnyBriefcase's picture

You got Diebold's number handy?

Thu, 06/27/2013 - 18:54 | 3701291 zerozulu
zerozulu's picture

American deserve this.

Thu, 06/27/2013 - 19:06 | 3701321 Cosmicserpent
Cosmicserpent's picture

Makes me want to puke out my eyeballs. I never would've believed I could be more infuriated or disgusted after W's administration.  Now, nothing would surprise me. MOTHER FUCKERS!!!

Thu, 06/27/2013 - 19:10 | 3701330 wee-weed up
wee-weed up's picture

Yep, W was bad...

But these fvckers make the Bush Admin look like nursery school.

Thu, 06/27/2013 - 22:52 | 3702199 jeff montanye
jeff montanye's picture

i am uncertain.  i think they wouldn't have had the guts to do what they have done had they followed ghw bush, who prosecuted the s and l criminals and attacked the actual person who invaded kuwait.  bush 2 gave this evil gofer the ideas, excuses and momentum.  admittedly b o has added layers of duplicity and monstrous crime upon bush's foundation.  

but on the bright side what only wild men like ralph nader thought true in 2000, that the political parties are essentially the same, ditto the msm from "left" to "right", is now q.e.d.

Thu, 06/27/2013 - 20:47 | 3701638 Z-Tranche
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Every administration is corrupt.  No need to be humble and limit it to just one.

Thu, 06/27/2013 - 22:14 | 3702069 thatthingcanfly
thatthingcanfly's picture

No way are these guys more corrupt or evil than Abe Lincoln and Edwin Stanton.

Thu, 06/27/2013 - 15:41 | 3700544 Joe Davola
Joe Davola's picture

Better go with weed, at least it's legal in a few jurisdictions these days.  Tobacco - if you don't get fined, the stigma will get ya.

Thu, 06/27/2013 - 16:42 | 3700857 Lore
Lore's picture

As an aside, I wonder how these telephone intercepts can be released to the media.  Are they not considered Evidence?  Where I come from, you don't release Evidence.  How are we to contextualize the expression "Trial By Media?"

Thu, 06/27/2013 - 16:59 | 3700913 Insignificunt
Insignificunt's picture

Their release might prevent the Honerable John Corzine from ever receiving a fair trial.

Thu, 06/27/2013 - 17:14 | 3700956 Jumbotron
Jumbotron's picture

MF may not deserve criminal charges....but writing bad things about a bank in chalk will put you in the clink it seems.....13 years perhaps......


<Sigh>   When will the revolution come?  Jefferson must be rolling over in his grave and the Liberty Tree is dying for lack of the blood of tyrants.

Thu, 06/27/2013 - 17:25 | 3701012 TruthInSunshine
TruthInSunshine's picture

The "Honorable" Jon S. Corzine, bitchez.

How many times need I remind you, FFS!

Thu, 06/27/2013 - 18:14 | 3701186 MxBonanza
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According to Wikipedia, the Honorable Jon Corzine is a “philanthropist”

War is peace, freedom is slavery and a white collar thief is a philanthropist.

Thu, 06/27/2013 - 18:26 | 3701225 AGuy
AGuy's picture

"War is peace, freedom is slavery and a white collar thief is a philanthropist."

A Corzine Philanthropist someone that recieves money from a group of other people that donated it without their knowledge or approval. Its all good in the end. Jon is just doing Gods Work! /Sarc



Thu, 06/27/2013 - 19:01 | 3701300 Manthong
Manthong's picture

dude.. amongst the knowing.. /sarc is oxymoronic.. but OK.. we understand that sarcasm is the lowest form of wit and we are all nitwits and dead in the long run.

Thu, 06/27/2013 - 18:06 | 3701165 Never One Roach
Never One Roach's picture

yeah, and beard cutting can get you in the slammer for 15 years:


Ohio Amish families struggle as beard-cutting prison terms get underway

Thu, 06/27/2013 - 18:26 | 3701222's picture

"Beard the Amish in his barn," just doesn't have the ring of "beard the lion in his den."

Thu, 06/27/2013 - 20:33 | 3701583 DeadFred
DeadFred's picture

Clip clop, clip clop, BANG, clip clop, clip clop.


Amish ride by shooting.

Thu, 06/27/2013 - 21:07 | 3701740 TWSceptic
TWSceptic's picture

If that's not fascism I don't know what is.

Thu, 06/27/2013 - 21:07 | 3701741 TWSceptic
TWSceptic's picture


Thu, 06/27/2013 - 16:03 | 3700636 unrulian
unrulian's picture

its not illegal until its illegal...and there's no justice until there's justice.

Fri, 06/28/2013 - 01:10 | 3700723 crazyjsmith
crazyjsmith's picture

We have an illegal 2 tier legal system










Thu, 06/27/2013 - 18:49 | 3701275 Redhotfill
Redhotfill's picture

Yes  Dr. you certanily did well put.

Thu, 06/27/2013 - 22:19 | 3702082 ToNYC
ToNYC's picture

Justice is for just us.

Thu, 06/27/2013 - 22:49 | 3702193 SnobGobbler
SnobGobbler's picture

...former senator...former head of the squid...I'd imagine he's hurt his public image is being scrutinized for doing gods work.

these arent the corrupt bankers you are looking for...nothing to see here, move along.



Thu, 06/27/2013 - 17:01 | 3700915 Alexandre Stavisky
Alexandre Stavisky's picture

At Brandenberg Gate:  "Mr. Obama give us back our gold! Mr. Obama return our rule of Law.  Mr. Obama preserve our privacy!"

That might impress.  Amin, Mandela, Hussein.  Leaders that brought their charges to new glory!

Thu, 06/27/2013 - 18:18 | 3701194 reTARD
reTARD's picture

We actually have a criminal justice system at least that's what it's called in California.

It's justice only for the criminals.

Thu, 06/27/2013 - 19:57 | 3701476 Wile-E-Coyote
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Don't call me Shirley.

Do NOT follow this link or you will be banned from the site!