Skip to comments.LIVE THREAD: Corzine testifies before Senate Agriculture Committee: C-SPAN3
Posted on 12/13/2011 7:45:39 AM PST by ken5050
Senate Agricultural Committee hearing on MF Global bankruptcy just starting. Corzine will testify later. First witnesses are MF Global customers, to talk about the impact of the bankruptcy on their lives and businesses. Also scheduled to appear is the trustee for MF Global, who is expected to provide details of what happened, and, oh yeah..where's the money now, the $ 1.2 billion...
What will be most interesting, IMHO, is that given that this is a Senate committee, controlled by the Dems, how the Democrat senators question Corzine, especially those from swing states...the degree of agressiveness, even hostility, they display, will be telling.
2 ex-MF Global employees sue Corzine, other execs
WASHINGTON (AP) — Two former employees of failed brokerage MF Global have sued its top executives and directors, including ex-CEO Jon Corzine, the former governor and senator from New Jersey.
The two employees say the executives lied about MF Global’s finances and encouraged workers to put their retirement savings into company stock that later plummeted.
The two are Monica Rodriguez, who was MF Global’s head of credit for the Americas, and Cyrille Guillaume, managing director of its commodities and stock division in London. Guillaume and Rodriguez are seeking class-action status for everyone who got company stock as a benefit of working for MF Global after May 2010.
A Corzine spokesman declined to comment on the suit, which was filed Monday in U.S. District Court in Manhattan.
MF Global failed after making a disastrous bet on European debt. It filed for bankruptcy court protection Oct. 31. Corzine resigned as chairman and CEO a few days later.
An estimated $1.2 billion or more may be missing from MF Global customer accounts. Regulators are investigating whether MF Global used money from customers’ accounts for its own needs as its financial condition worsened. That would violate securities rules. The FBI is investigating whether the firm violated any criminal laws.
MF Global employees were required to take part of their compensation in company stock, the suit says. A separate plan also allowed them to buy company shares at a discount. If they had known the firm’s actual financial condition, “they could have refused to buy in or insisted on compensation arrangements that were all cash,” said Jacob Zamansky, one of the attorneys representing Rodriguez and Guillaume.
“Corzine encouraged MF Global employees to invest their retirement savings and compensation in company stock, and he destroyed their wealth with his risky and outsized bets on (European) debt,” Zamansky said. “He should be held personally accountable for his actions.”
After Moody’s Investors Service downgraded MF Global’s credit rating on Oct. 24, the company’s stock dropped from $3.55 a share to $1.86 the following day. With MF Global in bankruptcy, the shares are nearly worthless; in May 2010, they traded around $8.
Several other class-action suits on behalf of MF Global shareholders also have been filed against Corzine and other top executives, and they are being consolidated by the court.
On Friday, the House Agriculture Committee voted to subpoena Corzine to testify at a hearing Thursday about his role leading MF Global. A committee spokeswoman said Corzine was served the subpoena.
Two other congressional panels announced plans to vote on subpoenas for Corzine.
These guys NO nothing...they should at least give back ALL the compensation they earned..since they are all obviously way too stupid to be in charge of a company..
They would have been better off taking the 5th, IMHO...they appear ridiculous..no one can believe them.
Roberts is doing a GREAT job..
These guys KNOW nothing...they should at least give back ALL the compensation they earned..since they are all obviously way too stupid to be in charge of a company..
They would have been better off taking the 5th, IMHO...they appear ridiculous..no one can believe them.
Roberts is doing a GREAT job..
This why Enron CEO Ken Lay was indicted and convicted (died before he could go to jail).
Corzine destroyed employees' wealth with his risky and outsized bets on (European) debt....which he held off the books.
That's why Enron CFO Andrew Fastow went to jail.
I’m leaving now..but wonder how you assess the attitude/performance of the Democrat senators...?
Corzine and Abelow's comments are even more laughable....when you know what these two did while in control of NJ tax assets.
>>Abelow invested state monies in a company in which his wife was invested.......if that wasn't money laundering, nothing was.
>>Abelow invested in a shaky realty trust when even your pet dog knew r/e was tanking.
>>Abel/Corz sent millions to their cronies on Wall Street----one W/S firm got a hundred million for doing nothing...if that wasn't money laundering, nothing was.
>>Corzine placed W/S cronies in key NJ jobs----several state agencies went bankrupt with no explanation---the $82 billion state pension fund---headed by a hedge fund operator----lost about 25%. The pension fund activities were notorious for secrecy.
>>$8 billion disappeared from a school fund.......if that wasn't money laundering, nothing was.
>>Obama send $18.5 "stimulus"to Corzine which promptly disappeared.......if that wasn't money laundering, nothing was.
OOOH..this guy Duffy just flat out said that Corzine knew about the unauthorized transfers from customer accounts...this is BIG...
I didn't watch the hearings and don't expect anything concrete to come out of them - it's too early, few facts to press etc., but I would be surprised if Democrats (Senators and Reps in the House hearings) treated MF'ers with kids gloves.
It's just a show at this point and Dems need to show their constituents / voters that they are "tough and fair" and don't "play favorites" with one of their own.
They are (or should be) trying to inoculate themselves from criticism or campaign attacks by distancing from Corzine and his gang; this is an opportunity for them to do just that.
Besides, many of them are sincerely p.o'd with Corzine - it's a very bad publicity for them (even if TV media mostly ignores or slights over the scandal) right in the middle of campaign season. They can't be happy about the timing and WS / Obama / political / Senate (their own) all-in-one connections that Corzine represents... So, maybe some of their anger and frustration is real, but not for the reasons that they would display.
Catching bits and pieces ... this is getting interesting.
(BTW, who put Stabenow on a diet?)
“Id add some community service, too”
Well I think along with civil liability jail may be in order. First it is tantamount to lying when he he attested to the statement in the 10 K that he evaluated the effectiveness of our disclosure controls and now claims not knowing where the money went .
I do not understand how the money is not traceable. If the money rest segregated in the clients account then when it was taken out of that account to what account did go? If for example MF has a billion dollars in clients money in a segregated account to what account was the so called disappeared funds transferred to? I confess I do not know the commodity business but reading Ann Barnhardt’s comments it appears to be straight forward.
THE ONLY APPROPRIATE INVESTMENT VEHICLE FOR CUSTOMER SEGREGATED FUNDS IN A FUTURES COMMISSION MERCHANT IS
UNITED STATES TREASURY PAPER, with the specific Treasury product being:
90 DAY T-BILLS.
This is the decades-long convention, it is COMMON KNOWLEDGE, and it is JUST COMMON SENSE. The entire interest dynamic for FCMs and IB’s was based on one metric and one metric only: 90 DAY T-BILL RATES.
I don’t give a CRAP how low interest rates are, and how much revenue has been lost to FCMs due to low rates of return on Treasury paper over the last 3-4 years. IT IS IMMORAL TO EXPOSE CUSTOMER SEG FUNDS TO ANYTHING MORE RISKY THAN THE EXTREMELY LOW-RISK U.S. T-BILL MARKET.
As an IIB, I wasn’t making any interest return on my posted escrow capital that I had to carry with my FCM over the last two years. When I first started BCM in 2006, the 90-Day T-Bill yield I was earning on just my escrow accounts paid my entire quote system expense. When the Fed synthetically suppressed interest rates down to next-to-nothing, that revenue to me went away. So . . . does that mean that I then was allowed to trade illegally in my customers’ accounts and gin up fraudulent commissions in order to make up for that loss of revenue?
HELL NO. My loss of interest income was MY PROBLEM, not my customers’ problem. And in the same way, the FCM’s loss of interest income did NOT give them the right to raid customer seg funds and “invest” those funds in uber-leveraged, uber-risky bets.
One last point: REMEMBER, if the bets that Corzine made with the customer seg funds had actually “worked” and paid off, the CUSTOMERS WOULD NOT HAVE RECEIVED OR SHARED IN ONE RED CENT OF THAT PROFIT. That profit would have been kept in total by the FCM, and the customers would have never known that THEIR SEGREGATED FUNDS were the funds used to make those bets. The psychopath Corzine was willing to make the uber-risky, suicidally leveraged bets because HE WAS PLAYING WITH OTHER PEOPLE’S MONEY.
90-Day U.S. T-Bills always have been and always will be the ONLY acceptable investment vehicle for customer seg funds in an FCM.
Oh, and Jon Corzine is a miserable liar and a sociopath who should spend the rest of his life in prison
Duffy ( CME head) just flat out said that Corzine knew about the transfers..said he did not find out until this weekend..which is why he did NOT testify to it last week in Congress. Roberts said this was a BOMB..that Duffy should have been called to testify firtst..Stabenow seems stunned..
I was watching fairly intently when Corzine testified today..he looked exhausted..beaten..much less animated than when he appeared before the House committee last week.. I think there's a chance he takes his own life, or tries to...to Corzine, the shame, the humiliation of a trial, a public exposure..and jail..lots of it..he can't handle that..unlike Bernie....the humiliation would kill Corzine, so he might as well end it himself...also..I believe that he's subject to civil suit for the funds he stole...he'd be broke..
And see in post #36 link to MF Global probe uncovers shady pre-fall trades - NYP, by Mark DeCambre, 2011 December 10 :
..... The trustee handling the unwinding of fallen broker dealer MF Global has uncovered some "suspicious" trades made by the company in the last days leading up to its Halloween collapse, a bankruptcy judge was told yesterday.
It's unfolding pretty fast now... and many former insiders are, without a doubt, talking to investigators and regulators. Corzine was not loved even before, and now that their own investments and vested stocks are gone, they'll be happy to hang Corzine and maybe get back some of the money through personal lawsuits.
CME's Executive Chairman Terrence A. (Terry) Duffy, 52 (salary: $950K).
CME is also under pressure, they have a little bit of a feud with judge and trustee about the size of "missing" money (trustee, obviously wants it to be a larger amount).
CME also threatens to move to another state to avoid Illinois new higher taxes, unless they are granted a waiver or tax break.
And a mini-revolt on the CME trading floor which is going extinct (replaced by electronic trading) by traders who act like OWS #occupiers:
From Chicago traders revolt at change in CME rules - CT, 2011 December 12
CME Group, already under fire from many traders for its delay in getting money returned to customers after the October bankruptcy of brokerage MF Global, said that next March or April it would begin incorporating deals from its electronic Globex trading platform into final prices. For many, the change appeared an inevitable reflection of the growth in electronic trade, which now accounts for the vast majority of transactions on both the Chicago Board of Trade, the world's biggest grain exchange, and the Chicago Mercantile Exchange, which offers contracts tied to cattle and hogs. But to the cadre of pit brokers and dealers who thrive on the final frenetic minute of floor trading used to set the official end-of-day prices, the change was a rallying cry to defend a way of life that is nearly extinct. "Are we going to sit here and be kicked in the teeth? Or are we going to fight back?" shouted Alan Young, a cattle broker who helped organize a raucous "Occupy the Pits" meeting of about 100 brokers and traders around the cavernous Chicago Board of Trade (CBOT), birthplace of the modern futures markets. ..... < snip >
Chicago pit traders are up in arms against a CME Group plan to use electronic trading to set grain and livestock closing prices, a move they fear will drive another nail in the coffin of open-outcry dealing.
CME Group, already under fire from many traders for its delay in getting money returned to customers after the October bankruptcy of brokerage MF Global, said that next March or April it would begin incorporating deals from its electronic Globex trading platform into final prices.
For many, the change appeared an inevitable reflection of the growth in electronic trade, which now accounts for the vast majority of transactions on both the Chicago Board of Trade, the world's biggest grain exchange, and the Chicago Mercantile Exchange, which offers contracts tied to cattle and hogs.
But to the cadre of pit brokers and dealers who thrive on the final frenetic minute of floor trading used to set the official end-of-day prices, the change was a rallying cry to defend a way of life that is nearly extinct.
"Are we going to sit here and be kicked in the teeth? Or are we going to fight back?" shouted Alan Young, a cattle broker who helped organize a raucous "Occupy the Pits" meeting of about 100 brokers and traders around the cavernous Chicago Board of Trade (CBOT), birthplace of the modern futures markets. ..... < snip >
Ironic, isn't it? 1%-ers acting like the phony self-described 99%ers...
Corzine has apparently committed perjury in his testimony. There is a CME auditor who will name the MF Global employee who stated that Corzine was aware of the transfers out of the customers’ accounts.
He’s NOT talking about the $200 mill transfer you reference..he’s talking about $950 mill transferred illegally...also, he said they were given a report my MF Global that was fradulent..IOW..someone made up a phoney document to give to the regulators....everything is coming out now in the wash..I repeat my earlier prediction that Corzine offs himself..
Given these were shady dealings, someone brought Corzine down, is my thinking. Hell, Corzine was in deep with the Obama Admin., Goldman Sachs and the Treasury Dept. When and why did team Obama throw Corzine under the bus?
He's committed perjury today, and also sub,itted false documents to the regulators..he faces a trial, pblic humiliation, lots of jail time, and loss of all of his fortune.. Watch...he takes his own life...just loo at his demeanor in his testimony today...he shoudl be placed on a suicide watch..
Yes, I understand that. CME has its own investigators there, as an exchange and a regulator, so they have much better, first-hand data of fraudulent transfers. This is the first investigors' account to the committee. There will be more, from other agencies / investigations.
I wouldn't predict Corzine's fate because I don't think he has shame, else he couldn't live with himself already.
C-span will rerun the hearings..do try and watch the last hour..when Duffy drops his BOMB..Stabenow was gobsmacked....and she cut off the hearing..when some GOP senators wanted to keep asking questions..