Re Corzine, you said:
“Then he must be an idiot! But idiots are not exempt from jail time!”
I’d prefer a civil solution—if he forfeited a majority portion of his personal fortune, it would put a serious dent in the amount of funds missing.
I’d add some community service, too. Maybe he could teach finance!
MF reinforces the impression of criminality permeating the entire financial and regulatory system.
As the CIA says---the crooks always leave a paper trail.
Give me five minutes with the MF books, and I'll tell you where the missing money is.
“I’d 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”