What Happened to MF Global

Recently in the news you may have heard about the collapse of MF Global but you don't really know the whole story. Well this story should be top headlines on every news network but unfortunately it does not seem to be getting much air-time. I follow the news closely and listen to many smaller programs that talk about things that are passed over by the mainstream media. Another good way to judge how much press a story is getting is to ask family members or people you work with about these particular stories.

All this week I have asked people if they were following the MF Global story. Some recognized the name while other's had no idea what I was talking about. So in essence it has been covered up and passed over by the mainstream media.

I always tell myself I need to make these stories more public to try and build awareness from the crimes that happen in broad daylight that nobody (authorities or government) does anything about. So here I am writing this article to make my point

MF Global is a global financial derivatives broker. MF Global provided exchange-traded derivatives, such as futures and options as well as over-the-counter products such as contracts for difference (CFDs), foreign exchange and spread betting.

They had both large clients as well as small individual investors mainly in the United States and Canada. You could by commodity futures, foreign exchange and other products through their brokerage house.

Things started to go bad for this public company when on October 25th , 2001 they're CEO Jon Corzine reported a $191 million dollar quarterly loss. This was primarily due to bad trades in European bonds. Just 6 days later on Oct31, 2011 they filed for Chapter 11 bankruptcy protection.

This was the 8th largest bankruptcy ($39 billion) in US history and the largest on Wall Street since Lehman Brothers.
As you can imagine people with accounts at MF Global were panicking and rightfully nervous about their money. They were told all customer accounts had been frozen until further notice.

Shortly after this, MF Global said it had a "shortfall" of $600 million pertaining to customer accounts. Upon further inspection auditors noticed the customer shortfall was closer to $1.2 billion dollars.

Basically this money was claimed to have been misplaced (not sure how this could ever happen) but was basically stolen by MF Global. Financial firms like MF Global are forced by law to keep customer funds separate from its own trading accounts. This type of activity it generally monitored by third party auditors like PricewaterhouseCoopers.

So the company knew what was happening and somehow the auditors missed this. Interesting.
So far they have only promised to return 60% of customer's money. As things unfold they hope to find the "missing" money in hopes to fully refund account holder's.

This disaster happened during the reign of CEO Jone Corzine. Jon was a former Goldman Sach's CEO, US Senator and most recently Governor of New Jersey. He was apparently making very erratic trades during the final months of MF Global's existence.

He reportedly had a huge hand in the $11 billion dollar European bond trade that led to the company's ultimate demise. A man with this background in finance and public sector should not be running a company this way. What's unbelievable is nobody has been arrested or indicted yet. It might help that Corzine is friends with Barack Obama and CFTC commissioner Gary Gensler.
Its looking like another white-collar crime is being ignored shuffled under the table.