The MF Global Holdings scandal exploded today, when a bankruptcy trustee said that twice as much money as everyone thought is missing.
What MF Global Holdings did wrong
Every outside observer agrees that MF Global failed to segregate customer funds from its own funds. Ann Barnhardt, head of Barnhardt Capital Management, put it bluntly:
Jon Corzine STOLE the customer cash at MF Global.
BCM has ceased operations, closed out its own customers’ accounts, and told its customers to get out of commodity futures and options completely. Barnhardt said that MF Global was not the only futures-and-options trading firm to be in trouble. (The key: MF Global got into that trouble by buying European “sovereign junk debt,” and many, many others made the same mistake.) As a result, the Chicago Mercantile Exchange (CME, Inc.) will not be able to make all customers good. (Some say that the law might force CME to make customers whole. CME might have lied to the government about what they knew, and when they knew it, about MF Global’s money troubles.)
Today came worse news. At first, the CME said that MF Global’s New York unit was short $600 million in segregated funds. MF Global declared bankruptcy on October 31. Today, three weeks later, the bankruptcy trustee says that at least $1.2 billion is missing—and that might not be all. (See reports in Bloomberg/BusinessWeek and the Associated Press.)
Jon Corzine’s role
This news reflects very badly on MF Global’s former CEO, Jon S. Corzine. On November 4, Corzine resigned from the company. The thought that he might “walk away” with a multimillion-dollar “golden parachute” caused public outrage. The company has since said that Corzine would get no such bonus. But the AP said nearly a week ago that the firm might sue Corzine for much of the money they already paid him during his time as head of MF Global. By nearly four to one, readers of the AP article agree that Corzine should pay up.
Corzine’s problems might be worse than that. Jay Bookman, at the Atlanta Journal-Constitution, suggests that Corzine could face criminal charges. Bookman reminds his readers that the FBI is looking into whether what MF Global did was criminal, in addition to being against regulations.
It’s hard to believe that a person of Corzine’s experience and position would engage in such a scheme, but at the moment, there may also be 1,200,000,000 reasons to think otherwise.
What’s really hard to believe is that a man of Corzine’s experience and position would not know what he was doing, and that he was doing wrong.
[amazon_carousel widget_type=”ASINList” width=”500″ height=”250″ title=”” market_place=”US” shuffle_products=”True” show_border=”False” asin=”0446510998, 0470047666, 0385512244, 0470612533, 1449555381, 1586489941, 1451542291, 047047453X, 1460954262, 193317496X” /]
Terry A. Hurlbut has been a student of politics, philosophy, and science for more than 35 years. He is a graduate of Yale College and has served as a physician-level laboratory administrator in a 250-bed community hospital. He also is a serious student of the Bible, is conversant in its two primary original languages, and has followed the creation-science movement closely since 1993.
- Christianity Today
- Constitution 101
- Creation Corner
- Entertainment Today
- First Amendment
- Foundation of our Nation
- Guest Columns
- Human Interest
- Ignite the Pulpit
- Let's Talk
- Money matters
- Racial Issues
- Tea Party
- Trump elevator pitch
- World news
Let's Talk2 days ago
Elon Musk at war with Apple
News1 day ago
Elon Musk says he’d vote for Ron DeSantis if he ran for president in 2024
Let's Talk13 hours ago
Twitter REVOKES medical misinformation policy
News2 days ago
Mike Lindell says he might challenge Ronna McDaniel as RNC Chair, may announce Monday
Legislative1 day ago
Herschel Walker says Trump has done more for black community than ‘last four presidents put together’
Accountability1 day ago
Report: Christian persecution on the rise in at least 18 countries
Accountability1 day ago
New York bill would prevent landlords from accessing criminal background checks for tenants
Entertainment Today1 day ago
Quentin Tarantino says Marvel actors are ‘not movie stars’