Regulators Know Where MF Global Funds Went

Posted by on Dec 14, 2011 at 9:39 pm

Regulators now have a more complete picture of money transfers in the final days of bankrupt brokerage MF Global, but must sort out which transactions were legitimate before more money can be released to customers, a top official told Reuters on Wednesday.

Jill Sommers, who is heading the Commodity Futures Trading Commission’s review of MF Global, said regulators “are far enough along the trail” that they know where the money went.

“Now it’s just finding out which ones of those transactions are legitimate and which ones of them are illegitimate,” Sommers said.

The CFTC and the trustee liquidating the firm are under intense pressure from lawmakers and customers to provide answers about what happened to hundreds of millions of dollars in customer money that went missing as the firm collapsed.

MF Global officials, including former Chief Executive Jon Corzine, have told lawmakers they simply do not know where the money is, and deny authorizing any misuse of customer money.

Full story.

One Response to “Regulators Know Where MF Global Funds Went”

  1. chris on 15/15/11 at 2:18 pm

    The problem is not whether they can track “every penny” because they can and will.

    The problem is that they can’t necessarily track it past the first stop or second stop. The nature of criminal activity involving smart crooks and transfers is that the crooks knew weeks before that the firm could crater and they had a plan. Folks like Marc Rich (don’t be surprised when some tax haven based firm connected to him or his ilk appears over the next couple of months) love to take 10% to disappear the funds.

    Lawyers will feast on the carcass and politicians will pass new regulations – as though stealing from your clients is not already a felony.

    One of the most shocking things to me is that the exchanges have not assured clients that they will be made whole no matter what. The exchanges claim to be insuring the accounts and the members would be negligent to not set up reserves as well as insure against criminal looting. My guess is that members’ policy promises were not policed, their self insurance levels / deductibles are at a level to be life threatening or policies exclude idiocy of this type.