There was a shady dude named Corzine,
Who took customer money and put a minus sign,
The Feds were baffled by the caper,
They said the money had turned to vapor,
Sorry poor folk you were screwed by design.
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The Wall Street Journal reports the shocking story that after three months of investigation federal officials have come to the conclusion that $1.2 billion of customer money at MF Global was "vaporized" when the firm collapsed into bankruptcy on October 31, 2011.The money was supposedly held in segregated and safeguarded accounts.
Wall Street Journal:
Money From MF Global Feared Gone --
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.discussion:
As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, 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...
Many officials now 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.
Investigators also are examining other scenarios that have gained traction in recent weeks, such as the possibility that MF Global suffered steep losses on investments made using customer money. Officials investigating the case have looked into whether such investments were appropriate under rules at the time.
As money poured out of MF Global, much of it likely passed through J.P. Morgan Chase & Co. and other banks where the securities firm had accounts, as well as trade-clearing partners such as Depository Trust & Clearing Corp. and LCH.Clearnet Group Ltd., people familiar with the matter said.
Those companies have denied being knowingly in possession of any missing MF Global money, and any efforts to make them fill the hole would face daunting hurdles. And because the firms usually were middlemen between MF Global and other counterparties, the funds they touched were then scattered widely, complicating the search...
Zero Hedge:
So one hand, nobody at MF Global was responsible because every member of lower, to middle to upper management was responsible (and certainly not Jon Corzine), secondly, not one regulator was responsible, because every regulator was equally oblivious of the grand theft occurring right under their noses. Finally nobody on the receiving end of this fund flow was responsible, as the money could have ratably gone to one of an infinite number of destinations. And here we were thinking that dilution is only applicable to what the central banks do to their currency. Little did we know that it is the de facto global modus operandi for the systemic fraud endemic in modern finance, whereby not one person is held accountable, as otherwise everyone would be held accountable.
Brilliant...
