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You Can't Make This Up: MF Global Sues PWC, Blames It For Its Collapse
File this one in the "you can't make it up" category. Over two years after the MF Global collapse, in which the primary dealer headed by Jon "I don't recall" Corzine all but admitted it had engaged in the cardinal sin of any financial intermediary, i.e., commingling money, to cover up a trade gone horribly bad and which resulted in the disappearance of some $1 billion in client funds until such time as the bankruptcy process managed to "liberate" funds from other part of the company, MF Global has suddenly figured who is at fault: not the CEO, not his brown-nosing lackey, not some janitor meant to be scapegoated precisely in a situation such as this, not even the infamous "glitch" - no, the party that is accountable for the firm's theft of client funds, and horrible investing decisions that led to its bankruptcy, are the accountants.
No really: yesterday MF Global Holdings sued PricewaterhouseCoopers LLP for $1 billion, alleging accounting malpractice helped bring down the brokerage company.
Like we said, you can't make this up. From Bloomberg:
PwC, which provided outside auditing and accounting experts, failed to advise the firm to account properly for its European sovereign debt holdings, leading it to over-invest in them, MF Global Holdings said in a complaint filed today in Manhattan federal court.
“But for PwC’s erroneous accounting advice, MF Global Holdings could not have -- and would not have -- invested heavily in European sovereign debt to generate immediate revenues and would not have suffered the massive damages that befell the company in 2011,” MF Global Holdings said in the complaint.
MF Global filed for bankruptcy on Oct. 31, 2011. Customers have claimed in lawsuits against the firm’s former executives that more than $1.6 billion of their funds that should have been segregated went missing, transferred to other parts of the company during the liquidity crisis.
Christopher Atkins, a PwC spokesman, didn’t immediately return a voice-mail message seeking comment on the suit.
In retrospect: almost brilliant. MF Global, or what's left of the estate, is using the old tried and true "Enron defense", where if there was corporate criminality, the accountants were surely involved. And they most probably were. There is one problem though: in the case of Enron, all of its key executives, Lay, Skilling and Fastow, got prison sentences. In MF Global's case of Jon Corzine... not so much.
Why? The answer:
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This pussy really does have 9 lives. Too bad his son didn't
The devil protects his own.
Interesting. I believe that is his ex-wife, Sharon Elghanayan, in the photo. I wonder what the new girlfriend looks like?
Whoops! My bad. That IS the girlfriend. Er, now the wife. Er... whatever! From Wikipedia:
Corzine married his high school sweetheart,[162] Joanne Dougherty, in 1969 at the age of 22,[8] and their 33-year marriage produced three children – Jennifer, Josh, and Jeffrey. The couple separated in 2002 and were divorced in November 2003.
And she was previously married to Eighanayan, as she's a Levine.
Tough to keep up with these snakes running from scandal to scandal and wife to girlfriend!
That "special place in hell" is getting awfully crowded.
OT: The article posted at King World News about CNBC clipping Michael Pento out of a group being interviewed is worth checking out.
If you can fake sincerity, you got it knocked.
Bitcoin Last Price: $498.2501
So the jist of the lawsuit is that PWC was hired to handle accounting and RISK Management? If anyone has traded for a group or bank you know that they have risk managers. Or is it MFG assertion that PWC just fucked up the book so that MFG and costumers monies were comingled? I Must say when it happened (MFG going down) it was one of the most surreal events that I had ever seen in 30 years on a trading floor. I also told a relative days later that Jon would never be held accountable for anything he had done.
This is where this lawsuit gets tricky because Corzine fired the risk manager and replaced him with a crony. http://online.wsj.com/news/articles/SB1000142405297020408320457708072393...
Of course the Honorable Jon Corzine has the entire Judicial system as his friends so he will probably win regardless.
This is like robbing your local Walgreens and blaming it on your CPA.
The financial industry has always claimed that self-regulation works, and is best.
But, how can this be if even they want their money back for the best self-regulation money can buy?
The Tribe can do anything they want, when ever they want, and where ever they want.
After wrting this in 2011 I'm just dumbfounded [sarc*]
http://www.zerohedge.com/news/guest-post-horrible-bosses-pitchforks-torc...
The MF Global events continue being some of the most extreme examples of the general pattern of facts.
THE WHOLE SYSTEM IS FUNDAMENTALLY BASED ON FRAUD, WHILE MOST CRITICISMS ARE BASED UPON SUPERFICIALLY PRESENTING ONE OR ANOTHER OF THE SUPERSTRUCTURE OF LAYERS BUILT ON THAT FOUNDATION OF FRAUD.
Given that the overwhelming vast majority of people continue to think using false fundamental dichotomies, and proposing "solutions" based upon the impossible ideals which require perceiving the world through those kinds of false fundamental dichotomies, THAT THE WHOLE SYSTEM IS BASED ON FRAUD TENDS TO GET DELIBERATELY IGNORED.
MF Global events illustrate that, which makes the irony of this news story even more extreme.
SINCE ALL ACCOUNTANTS OPERATE WITHIN A FUNDAMENTALLY FRAUDULENT FINANCIAL ACCOUNTING SYSTEM, THEREFORE, IT IS THE ACCOUNTANTS' FAULT.
The problems actually go through the heart of the philosophy of science, in ways that the concept of entropy had its meaning inverted, by the arbitrary insertion of a minus sign into the entropy equations of thermodynamics, and information theory, in order that measurements of power and information would end up having positive values, rather than negative values, which is what the mathematics itself revealed was the actual situation.
ALL ACCOUNTING SYSTEMS ARE ORGANIZED LIES, OPERATING ROBBERIES. Those who do that the best have been able to promote their systems of understanding as being the absolute truth, whereas, in our Bizarro Mirror World, the claims that their accounting is the absolute truth are the greatest lie. However, most people only notice the more superficial levels of contradictions, or the more egregious levels of the frauds.
Almost nobody goes through the paradigm shifts required to understand that all human realities are necessarily always organized lies, operating robberies. Therefore, there is NO way to have relatively more scientific accounting, because the basic theories of power and information have become too perverted by the triumphs of the biggest bullies' bullshit for almost anyone to comprehend the degree to which the entire monetary system is fundamentally based on fraud. Thus, there are practically no politically possible ways to better balance the runaway triumphs of the currently established fraudulent accounting systems, because most of the opposition fails to penetrate deep enough into the issue, but rather, stays on the more superficial layers of the frauds.
The basic concept of SUBTRACTION, which is the source of all the rest, is not being understood enough to comprehend how all the rest of the accounting is taking place upon that basis. THE FIRST LIE IS GENERALLY ACCEPTED AS TRUE, WHICH THEN IS THE BASIS FOR EVERYTHING ELSE THAT FOLLOWS TO BE RELATIVELY FALSE.
To put it in perspective, with some amusing style:
http://www.youtube.com/watch?v=173lQvEqTyI
Keiser Report: Spider's Web of Debt (E575)
http://www.youtube.com/watch?v=Ewi3c1IhkSo
Keiser Report: Mortgage Slaves (E576)
Said it before......say it again.
I cannot believe that Corzine is still alive.
ok....now i get it.......Corzine doesn't own a nail gun. Note to self...gotta send a Nail gun and how many nails should I send......mmmm .....undeseptuaginta...yeah yeah 69..so he and the hottie can do each other.
ok edit because my nine yr old tells me that nail (n) is masculine and I should have stated that I would send undeseptuagintus clavus.
The fact that no one from MF Global has gone to prison just proves how corrupt and/or incompetent the SEC / justice system / courts are. The courts crucified Martha Stewart and Conrad Black over trivialities but Corzine gets a walk for stealing a billion dollars???? WTF????
Nice to be the President's bundler?
When all hell breaks loose, Corzine and his family will be the first to get erased.
Who's the cunt.... that is lying down in the chair?
When fingers are pointed at the very people who were paid to mix the beans together exactly the way they did, several conclusions may be drawn:
1. They are at the last stop on the blame-shifting train. This is no, "The butler did it." type of game. Accountants know where all the beans are buried (and who ordered it), they are therefore the last people sacrificed in an inquiry.
2. Immunity from prosecution is no longer the holy grail it once was. Those in the bean business at every level know that from this point forward they have more to fear from their former employers than they do from the courts.
3. Number 2 above may work well to silence mid-level managers, but it backfires when applied to the "Count de Money" class of employee. Their psychology is entirely different, they are patient, and they will exact any perceived punitive damages from you or yours in the future. It is a very tight profession socially.
4. Timeline-wise this development puts us at the middle of the end, there are only two major steps left in the game. The first is either disclosure followed by prosecutions or a continuation of the nail gun theme while the financial industry is looted from within at a pace that will spin heads, or both. The second is when the consequences ripple out to the justice officials during the final freak out.
And the band played on...