| Submit your comments on this article | |
| Economy | |
| CME Chief Suggests Corzine Knew MF Global Dipped Into Customer Money | |
| 2011-12-14 | |
| Jon Corzine was back in Washington to answer questions on the downfall of MF Global Tuesday, and offered slightly stronger language to defend his ignorance of whether any commingling of customer funds took place as alleged, but the real bombshell came later in the day when CME Group Executive Chairman Terrence Duffy said he heard a different story from an MF Global employee. Testifying before the Senate Agriculture Committee after an earlier panel featuring Corzine and two other top MF Global executives, Duffy said during Q&A that one of the firm's employees told the CME that Corzine knew about a loan to European affiliates shortly before the company's Oct. 31 bankruptcy filing, a loan that came from commingled customer funds.
CME is not undertaking its own investigation, Duffy said, after being told not to by the Commodity Futures Trading Commission and the Department of Justice. Duffy estimates the MF Global shortfall at between $700 million and $900 million. The $1.2 billion figure estimated by bankruptcy trustee James Giddens goes beyond the U.S. futures accounts that comprise the CME's estimate. Corzine, who told a House committee last week that he had no knowledge of how as much as $1.2 billion in customer money went missing and that it was not his intent that any funds would be improperly moved, said Tuesday that he "never gave any instruction to misuse customer funds." During the hearing, before the Senate Agriculture Committee, Corzine appeared with MF Global COO Bradley Abelow and CFO Henri Steenkamp. When Chairwoman Debbie Stabneow, D-Mich., asked all three where the missing customer funds went, Abelow and Steenkamp said they did not know either. | |
| Posted by: |
| #14 "CME is not undertaking its own investigation, Duffy said, after being told not to by the Commodity Futures Trading Commission and the Department of Justice - who don't plan on investigating either, since it would implicate their buddy and major Bambi donor, JC." FTFY, Mr. Duffy. |
| Posted by: Barbara 2011-12-14 20:40 |
| #13 I'm pretty sure it's supposed to apply to any trading by a US-based public corporation. The losses occurred in London by an affiliate, which has no Sarbannes-Oxley to protect customer funds. |
| Posted by: Pappy 2011-12-14 19:38 |
| #12 In fact the controls preventing this would need to be over-ridden multiple times, and the only person that could have done that is the CEO or COO. -- the very definition of 'control fraud.' |
| Posted by: Anguper Hupomosing9418 2011-12-14 18:25 |
| #11 Which only applies to US-based trading. I'm pretty sure it's supposed to apply to any trading by a US-based public corporation. |
| Posted by: Thing From Snowy Mountain 2011-12-14 17:16 |
| #10 I use 'fix' in the Chicago sense of the word. Better than the veterinary sense, I suppose. |
| Posted by: Thing From Snowy Mountain 2011-12-14 17:15 |
| #9 Thanks To Sarbannes-Oxley Which only applies to US-based trading. |
| Posted by: Pappy 2011-12-14 14:49 |
| #8 Why did the commodities exchange and DOJ tell the auditors to stop looking? Did they realize it was not an accounting error and that it was malfeasance or did they call it off to run cover for MF G? |
| Posted by: Bill Clinton 2011-12-14 13:46 |
| #7 Yet more Stuff That Wasn't Supposed To Happen Thanks To Sarbannes-Oxley What Corzine may not realize is that it doesn't matter whether he "intended" for the funds to be misused or not. He is still in violation of Sarbanes-Oxley. He may be counting on his good buddy Holder to give him a pass (What's a few felonies between friends?). However, if Obama looses the election, Corzine is looking at jail time. |
| Posted by: Frozen Al 2011-12-14 11:25 |
| #6 All major financial companies have a "chinese wall" between customer accounts and proprietary accounts. I've worked in the IT departments of several financial companies (Citibank, Wells Fargo, GMAC and others). We could not find out what "the other side" was doing (they frequently used completely different applications). Simply stated, only members of the Management Committe and Board of Directors would have a reason to know what's happening on both sides of the wall. In addition, financial companies have such detailed controls that it is impossible to move money between the two sides without it being thoroughly recorded and multiple alarm bells going off. In fact the controls preventing this would need to be over-ridden multiple times, and the only person that could have done that is the CEO or COO. |
| Posted by: Frozen Al 2011-12-14 11:17 |
| #5 Somebody did this. When they find him, he'll doubtless say Corzine approved it directly, or if that can't be proven, that Corzine indicated indirectly that it would okay,or, at last,that he, the employee, must have misunderstood Corzine. The alternative would be that some trading program on the computers went rogue when nobody was looking. |
| Posted by: Richard Aubrey 2011-12-14 09:17 |
| #4 Don't worry, Snowy, Dodd-Frank will fix* all of this. Just you wait. * I use 'fix' in the Chicago sense of the word. |
| Posted by: Steve White 2011-12-14 08:58 |
| #3 Yet more Stuff That Wasn't Supposed To Happen Thanks To Sarbannes-Oxley. |
| Posted by: Thing From Snowy Mountain 2011-12-14 07:56 |
| #2 start asking Obama if "he will promise not to pardon his close Democrat friend, Corzine". Ask it at EVERY press conference, PR stunt, and campaign stop. |
| Posted by: Frank G 2011-12-14 07:34 |
| #1 Cute. He "never gave any instruction to misuse customer funds". Of course not. Now, he might have give instructions (or tacitly approved such) to USE customer funds. But MISUSE? Perish the thought. |
| Posted by: Whiskey Mike 2011-12-14 07:32 |