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Corzine 'stunned' that MF Global couldn't find missing funds
 [L.A. Times] As the first former U.S. senator to be subpoenaed by Congress in more than a century, Jon Corzine testified Thursday about the "last chaotic days" of MF Global, the trading firm that declared bankruptcy under his watch.Corzine said he was "stunned" to learn that the firm could not locate hundreds of millions of dollars in client money in the days before the firm's collapse, and said he had no idea where the money had gone. He's lying, of course. Corzine was chief executive of MF Global when the firm filed for bankruptcy protection Oct. 31. He resigned from his post five days later. "I simply do not know where the money is or why the accounts have not been reconciled to date," he said in testimony before the House Agriculture Committee. Principals at hedge funds, brokerages, and trading houses always know, minute to minute, where the money is. It's what they do for a living. They expend substantial resources to make sure they know where the money is and just as (or more) importantly, how liquid they are, minute to minute. Of course he knew. Client money should have been held in segregated accounts separate from those involving the firms' own trading activity. The disappearance of the money has led to speculation that MF Global used customer funds to shore up risky bets on European sovereign debt. "I never intended to break any rules," Corzine said when asked whether he had ever authorized a transfer of customer funds from segregated accounts. Ah, the 'Holder' defense... "There were an extraordinary number of transactions during MF Global's last few days, and I do not know, for example, whether there were operational errors at MF Global or elsewhere, or whether banks and counterparties have held onto funds that should rightfully have been returned to MF Global," Corzine said. Corzine said he "strongly advocated" the trading strategy that led MF Global to accumulate more than $6 billion in holdings in European sovereign debt. But he said the company's sovereign debt positions were not the cause of the firm's collapse. Zero Hedge explains how thoroughly we're boned because of MF Global's collapse. Posted by: Fred 2011-12-09 |
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