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MF Global's Missing $1.2 Billion May Have "Vaporized"
By
Jen Chung
Published Jan 30, 2012
Modified Jan 30, 2012
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By
Jen Chung
Published Jan 30, 2012
Modified Jan 30, 2012
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Good one, Jon Corzine: The Wall Street Journal reports, "Nearly three months after MF Global Holdings Ltd. collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation." In fact, "The findings so far suggest that a 'significant amount' of the money could have 'vaporized' as a result of chaotic trading at MF Global during the week before the company's Oct. 31 bankruptcy filing, said a person close to the investigation."
Corzine, the former NJ Governor, Senator and Goldman Sachs chair with a love for risky trading, denied authorizing the firm to misuse customer money while testifying in front of Congress in December, but now officials, according to the WSJ, "believe certain employees at MF Global dipped into the 'customer segregated account' that the New York company was supposed to keep separate from its own assets—and then used the money to meet demands for more collateral or to unfreeze assets at banks and other counterparties as they grew more concerned about their financial exposure to MF Global." There are some fishy transfers before the firm declared bankruptcy.
Later this week, a House subcommittee will look at MF Global's practices—"The hearing will address how MF Global managed risk, how this risk was disclosed to investors and customers, and how credit rating agencies evaluated this risk," The WSJ reports, "Among the people scheduled to testify at the hearing is Michael Roseman, a former chief risk officer at MF Global who raised serious concerns several times in 2010 about the growing bet on European bonds by Mr. Corzine."
Tagged
are you kidding
jon corzine
mf global
missing billions
missing money
risky trading
vaporized
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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