Previewing Today's MF Global Hearing

Tyler Durden's picture


Today at 2 PM, the House Financial Services Committee will hold its third hearing (and the fifth overall) on the ever more confounding topic of MF Global, its bankruptcy, and its vaporized client funds, which amount to about $1.6 billion at last check. And while Jon Corzine will not be there, virtually everyone else from the firm who can promise that said vaporitzation of funds was merely a softward glitch and not the fault of anyone in particular, will be present, from the General Counsel, to the CFO, to the Deputy General Counsel of JPMorgan, all the way to Edith O'Brien, assistant treasurer of MF Global, who is expected to plead the Fifth. One wonders why if there is nothing to hide, but that is the topic of another discussion. And as exposed last week by the WSJ, this hearing will be particularly interesting as now it has been made clear that Corzine specifically gave the order to transfer funds to JPM's account. As summarizes: "Per JC’s direct instructions." This line, contained in an email that an MF Global finance official sent to explain a $200 million transfer to JPMorgan Chase from an MF Global account containing customer funds, will be a focal point of a congressional hearing today into the futures firm’s collapse. The email, disclosed in a congressional memo circulated Friday, has raised questions about whether the former governor and CEO of MF Global knew customer money was being used to plug holes in the firm’s finances as it plunged into bankruptcy during the last week of October. As much as $1.6 billion of client funds has gone missing, according to a trustee liquidating the futures firm." Wrong - not "gone missing": it vaporized.

Furthermore, as JPM's Deputy General Counsel will testify today, "on the morning of Friday, October 28, as a result of the heightened level of attention to MF Global transfers and balances dictated by the debit alert, J.P. Morgan determined that there were overdrafts in certain of the foreign-exchange clearing accounts maintained by MF Global’s U.K.-based affiliates. We promptly advised the Chairman and CEO of MF Global Holdings Ltd., Jon Corzine, and others at MF Global of these overdrafts and were assured that any overdraft would be covered....when this was raised with Mr. Corzine on Friday morning, he readily agreed that it was important for MF Global to cover the overdrafts, and he assured J.P. Morgan executives that MF Global had ample funds to cover the overdrafts and that they would be covered promptly" The problem is that as is now known it was covered with client money.

So bring your popcorn - the contradictions in Corzine's sworn testimony are now so blatant, even corrupt congressional critters, potentially those tied in some way to Corzine's fundraising efforts, will be forced to ask relevant and pertinent questions this time around. Showtime is 2pm and will have a live webcast.

Full cast of characters:

Hearing entitled “The Collapse of MF Global: Part 3”
Wednesday, March 28, 2012 2:00 PM in 2128 Rayburn HOB
Oversight and Investigations


Panel I

  • Ms. Laurie Ferber, General Counsel, MF Global Holdings Ltd.
  • Mr. Henri Steenkamp, Chief Financial Officer, MF Global Holdings Ltd.
  • Ms. Christine Serwinski, Chief Financial Officer for North America, MF Global Inc.
  • Ms. Edith O’Brien, Assistant Treasurer, MF Global Inc. (no written statement submitted)

Panel II

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Wed, 03/28/2012 - 10:46 | 2297192 maxmad
maxmad's picture

Get out the KY Corzine!!

Wed, 03/28/2012 - 10:48 | 2297199 Hippocratic Oaf
Hippocratic Oaf's picture

That's "Honorable" Corzine to you!

Wed, 03/28/2012 - 10:50 | 2297205 spiral_eyes
spiral_eyes's picture


Wed, 03/28/2012 - 10:51 | 2297213 hedgeless_horseman
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Wed, 03/28/2012 - 11:00 | 2297259 Cognitive Dissonance
Cognitive Dissonance's picture

I just downloaded iHangman for my iPhone4. How do iHack the iApp and place iCorzine on the iGallows?

Wed, 03/28/2012 - 10:49 | 2297200 maxmad
maxmad's picture

Bernie Made-off needs a roomie!  Pillow fight Jon!

Wed, 03/28/2012 - 10:51 | 2297207 SHEEPFUKKER

Jonny Boy Made-off with the money. 

Wed, 03/28/2012 - 10:52 | 2297218 maxmad
maxmad's picture

I think you mean "Dimon in the rough" made off with the money...

Wed, 03/28/2012 - 10:57 | 2297239 Hippocratic Oaf
Hippocratic Oaf's picture

Dimon: Um, John........seems to me your betting all on black just isn't working out.

Honorable Corzine: I just need a lil' more time!

Dimon: FUCK YOU, PAY ME!!!

Wed, 03/28/2012 - 11:17 | 2297343 Gully Foyle
Gully Foyle's picture

Ace: What do you know?
Nathan: I am still in your employ.
Ace: And in theirs. Did you set a salary figure with them?
Nathan: No.
Ace: Probably the right move, makes him look like an amateur.
Gus: Nice imitation, kid.

Wed, 03/28/2012 - 12:53 | 2297690 Cadavre
Cadavre's picture

Bernie has married his current roomie and now farts as a baritone.

It's sure nice to know MF Global Execs are still getting their boneruses. Do bank robbers always get a bonus?


Wed, 03/28/2012 - 11:01 | 2297262 Gully Foyle
Gully Foyle's picture

Ricky: Fuck this court. Fuck Jim Lahey. Fuck Randy. Fuck those two idiot cops right there. Fuck suit dummies; as a matter of fact fuck legal aid. Fuck Danny and Terry's Buffalo Chicken Wings. Fuck all the old wood in here. Fuck the moon, fuck corn on the cob, fuck squirrels. Fuck me, fuck you, fuck everything!

Wed, 03/28/2012 - 11:34 | 2297415 entropos
entropos's picture

Finer words have never been said. 

Wed, 03/28/2012 - 12:15 | 2297556 entropos
entropos's picture

It must be seen to be truly enjoyed.

Full scene 

Wed, 03/28/2012 - 16:29 | 2298503 pies_lancuchowy
pies_lancuchowy's picture

are you a professional writer?

Wed, 03/28/2012 - 11:03 | 2297263 Buckaroo Banzai
Buckaroo Banzai's picture

I'm sure there will be grave expressions of concern expressed, along with some "tough questions" and calls for "further investigation" and some "blue-ribbon panels" with more "forensic accounting". Hand wringing will ensue, and the NYT will publish a searching "analysis" wondering how "the regulators" missed this one, with calls for more "supervision" and "regulations" to ensure "fairness", combined with speculation about how to bring "social justice" to the "wild west" of Wall Street, and ruminations on how a "visionary" and "respected authority" like Jon Corzine could have "fallen asleep at the switch" and "taken his eye off the ball" with MF Global merely being an "unfortunate symptom" of a "system gone wrong". Lip service will be paid to the "speculators" who were "seduced by their own greed" and "missed the warning signs" and who will now need to take "extra precautions" with reflections on how "commodities speculation" is a "dangerous game" and "bad things can happen" to people who thrive on the "windfall profits"  and the danger of "skating close to the edge" in an industry where "every move can be your last".


Wed, 03/28/2012 - 11:15 | 2297334 Milton Waddams
Milton Waddams's picture

Right, and if that narrative doesn't fit we can always go with 'the few bad apples' template.

Wed, 03/28/2012 - 16:32 | 2298511 pies_lancuchowy
pies_lancuchowy's picture

Buckaroo you made my day. Give me the bank account number (ok just kidding)

Wed, 03/28/2012 - 11:05 | 2297283 Gully Foyle
Gully Foyle's picture

"merely a softward glitch"

Is that like magical money protecting wards combined with software or is it like pay it forward where the software actually forwards shit to the future?

Wed, 03/28/2012 - 14:36 | 2298034 Dburn
Dburn's picture


Wed, 03/28/2012 - 11:28 | 2297386 Chief KnocAHoma
Wed, 03/28/2012 - 11:38 | 2297437 wearef_ckedwith...
wearef_ckedwithnohope's picture

Well - there is a lot being made about the $200 million extorted by financial terrorist Jamie Dimon.


But.........................that leaves approximately $1.4 billion in embezzled segregated funds unaccounted for.  Who's looking into that?  And how long was that going on?

Wed, 03/28/2012 - 12:28 | 2297193 AN0NYM0US
AN0NYM0US's picture

My name is Christine Serwinski. (CFO of MF Global)

I was on vacation the week of Oct 25-31


Nonetheless, late in the day on Thursday I decided to come back to Chicago a day early, on Sunday rather than Monday. 

Among  other things, I had by then learned that there were serious efforts underway to sell all or a substantial portion of MF Global Inc.’s business. Earlier on Thursday, I also learned  that the segregation report for Wednesday showed a substantial deficit in what was called the “firm invested in excess segregated and secured funds.”


Senator: Ms. Serwinski, so a billion dollars is missing, the company all of a sudden is trying to sell itself and you decided to come back from vacation on Sunday Oct. 30 instead of Monday the 31st?  Do I have that correct.

Serwinsiki: As I said Senator I was reassured that everything was under control, and at no time did anyone ever suggest that I should return to the office.


Senator: Who was CFO of MF Global at that time?

Serwinski: I was

Senator: Well, I hope you had a chance to relax on your vacation, thank-you for your testimony today Ms. Serwinski.

Wed, 03/28/2012 - 10:49 | 2297202 Dr. Engali
Dr. Engali's picture


"will be forced to ask relevant and pertinent questions this time around. Showtime is 2pm and will have a live webcast."


I'll believe it when I see it.

Wed, 03/28/2012 - 10:54 | 2297229 Everybodys All ...
Everybodys All American's picture

nothing will change ... in fact it's possible Eric Holder will step in to insure that nothing will happen as he has done since the beginning of this failed administration.

Wed, 03/28/2012 - 11:00 | 2297261 Bob
Bob's picture

What ever became of Carl Levin's referral of the Squid "toxic crap" case . . .

Wed, 03/28/2012 - 11:36 | 2297428 Carl Spackler
Carl Spackler's picture

Agreed, Dr. E

Justice will not be served....yet     (I am holding out hope that it will at some future point in time)

I predict more than one 5th Amendment protection exercised today.  (O'Brien being the obvious one)


Wed, 03/28/2012 - 10:51 | 2297209 JohnKozac
JohnKozac's picture

Stealing is all the Rage nowadays....(that is when your not busy eating your iPad).

Wed, 03/28/2012 - 11:07 | 2297300 Gully Foyle
Gully Foyle's picture


"Stealing is all the Rage nowadays"

Dude Google ABSCAM. That taught the very important lesson about buying off all parties concerned so the theft never gets noticed again. You have to be a real stupid motherfucker these days to get caught.

Wed, 03/28/2012 - 10:51 | 2297210 ReallySparky
ReallySparky's picture

Seriously, these congressional idiots need to start acting ethical and demand some justice for the customers. 

Wed, 03/28/2012 - 14:44 | 2298087 smiler03
smiler03's picture

Ha ha ha ha

Wed, 03/28/2012 - 10:53 | 2297221 spastic_colon
spastic_colon's picture

teflon johnny....he has already been pardoned

Wed, 03/28/2012 - 10:55 | 2297231 Dr. Richard Head
Dr. Richard Head's picture

Corzine: "I'm sorry. It was an oversight."

Committee: "Good enough for us.  Meeting adjourned.  What's for lunch?"


Wed, 03/28/2012 - 10:56 | 2297233 Kastorsky
Kastorsky's picture


What followed was the largest 24-hour crime spree aka money laundry in financial history.

Forty-eight hours after JP Morgan's line of credit was rejected (their electronic check bounced creating an overdraft), a second larger margin call was issued to JP Morgan, which set off the following change of events:

Immediately financial terrorist Jamie Dimon, CEO of JP Morgan phoned Federal Reserve Chairman Bernard Bernanke, U.S. Treasury Secretary Timothy Geithner and CFTC Chairman Gary Gensler and discussed his predicament.

Within an hour the CME Group re-issued the second margin call singling out only MF Global and removing JP Morgan from its liability.

Fifteen minutes later Jamie Dimon called MF Global CEO Jon Corzine threatening his life and demanding that MF Global meet the $200 million margin call that was originally issued for JP Morgan.

One hour later the crooked ISDA ruled the MF Global trades to be null and void, which then allowed JP Morgan and Jamie Dimon to short the MF Global stock and then, with the approval of the Federal Reserve Bank of New York laundered the proceeds into the London LIFFE Exchange, and issued new naked derivatives which would be used in the latest Greek-Euro bailout ponzi scheme.

Wed, 03/28/2012 - 10:59 | 2297257 Josh Randall
Josh Randall's picture

who uses myspace anymore ?


Wed, 03/28/2012 - 14:46 | 2298098 smiler03
smiler03's picture

Musicians without talent.

Wed, 03/28/2012 - 10:56 | 2297238 Urban Roman
Urban Roman's picture

Mistakes were made

Shit happens

Money vaporizes


What's that spell?

Wed, 03/28/2012 - 10:57 | 2297240 Dr. Engali
Dr. Engali's picture



Questioner:  Honorable Mr. Corzine  can you tell me about this memo that says you authorized thetransfer of  200 million dollars?

The "Honorable" Mr. Corzine: According to my best recollection I don't remember.

Wed, 03/28/2012 - 11:01 | 2297264 death_to_fed_tyranny
death_to_fed_tyranny's picture

The Powers that be better "off" the, AHEM, Honorable Mr. Corzine! Me thinks there are more piles of dogshit laying around. Who else is in on the takedown of MF. Enquiring minds want to know.

Wed, 03/28/2012 - 11:03 | 2297272 Negro Primero
Negro Primero's picture
Presenting the absurdly sanguine Promontory presentation

A big thanks to the FT’s regulatory correspondent Kara Scannell for passing along the May 2011 presentation by consultancy Promontory to the MF Global board’s audit and risk committee.

As Kara and Tom Braithwaite write in their piece this morning, the presentation concluded (at T -5 months to bankruptcy) that MF Global had “robust enterprise-wide risk management”. The report was commissioned as part the broker-dealer’s settlement with the CFTC after the wheat futures trading scandal in 2009.

Click below to view in its pdf’d glory…

Kara obtained the docs via a FOIA request, and there was a hilarious bit that was redacted by the CFTC on the slide labelled “Conclusions”…

MF Global has continued to strengthen its senior management team since the 2010 Review. In addition, during the 2011 Review, Promontory observed a strong commitment to the firm’s new strategic direction and focus, with credit given in large part to [Redacted].

Gee, wonder who could it possibly be.

Wed, 03/28/2012 - 13:33 | 2297818 Troy Ounce
Troy Ounce's picture



Just for interest sake. Is there someone with Adobe Creative Suit who can take out the redacted part in above Adobe reader file and repost it??

Wed, 03/28/2012 - 11:06 | 2297292 mr_T
mr_T's picture

Stealing and getting away with it is the new status symbol of the super rich.

Can't touch this.... Hammer time.. Corzine looks good in parachute pants..

Wed, 03/28/2012 - 11:09 | 2297311 Gully Foyle
Gully Foyle's picture


"Corzine looks good in parachute pants"

What are you Japanese? First Reno's wattle now Corzines retro attire.

Wed, 03/28/2012 - 11:12 | 2297318 BanksterSlayer
BanksterSlayer's picture

Are we going to do shots during the hearing? One shot for the word "overdraft"? Two shots for the word "segregated"? Ten shots for the words "I am guilty"?

Wed, 03/28/2012 - 11:46 | 2297460 Money 4 Nothing
Money 4 Nothing's picture

Three shots if he reiterates.. "But.. I told you it Vaporized." I'm shocked!

Wed, 03/28/2012 - 11:46 | 2297462 navy62802
navy62802's picture

I but I can summarize it before it even happens.

"I didn't know that the company was stealing customer funds."

Wed, 03/28/2012 - 11:53 | 2297479 Money 4 Nothing
Money 4 Nothing's picture

Those must be Nomex pants he is weaing today, just in case he goes for the pant's on fire defense.

Wed, 03/28/2012 - 11:58 | 2297500 fuu
fuu's picture

Hopefully it will be on C-SPAN.

Wed, 03/28/2012 - 11:58 | 2297503 Paul Atreides
Paul Atreides's picture

Teflon Jon

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