A couple a weeks ago there was a thread on MF Global wherein it was claimed that this whitewash is to cover up that MF, under the language of their account agreements, could legally cover the trading losses that sent them into bankruptcy with the money in those accounts. But to make this clear would destroy customer confidence in these markets and disrupt the syatem, so it is in the interest of the stability of the system to keep this all confused in the minds of the general public.
Just reporting what was said previously to explain why even the congressional hearings can’t seem to clarify and get to the bottom of this.
When Rob Rubin was attempting to change the law so that Travelers could buy CitiBank the Clinton administration had made changes to the laws. One of those changes allowed for firm to use segregated customer funds “intra-day” so long as the money was returned to the rightful place at the close of business each day. However, if the money is “lost” intra-day how do you put it back.