One of our constant complaints about the ongoing investigations into the MF Global scandal has been how regulatory agencies, industry leaders and Congressional committees talk about lessons learned and changes that need to be made as if the issue were resolved. Obviously there are lessons and upgrades in enforcement to be considered but that perspective puts what really is an ongoing crime in the past tense.
Sorry if I am repeating myself but segregation of customer funds was never supposed to be violated and customers still, nearly six months later, have not been made whole. There have been no criminal charges filed in the case or any civil actions filed by regulatory authorities.
This is an outrage. Want another one? Apparently former MF Global Chairman and CEO Jon Corzine is still bundling money for President Obama. We knew he had in the past and when his name was on a January fundraising report it was no big deal but the most recent list of first quarter 2012 volunteer fundraisers for “Obama for America and Obama Victory Fund” came out recently and Mr. Corzine’s name was on it in the $500,000 plus category. For the President to maintain this relationship after it was clear that Corzine orchestrated the collapse of a major futures commission merchant and the eighth largest U.S. bankruptcy through reckless trading behavior and possibly could face criminal prosecution is simply unbelievable.
President Obama’s campaign and the Democratic National Committee returned a total of $70,000 in direct contributions from Corzine and critics were calling on the President to return the $500,000 Corzine had raised as a bundler. The President did not return those funds but most of us assumed that would end Mr. Corzine’s fundraising activities except perhaps for his own personal defense fund (though MF Global Holdings trustee Louis Freeh helped ensure that Corzine will be able to tap insurance policies of the firm to cover some of that cost).
The Commodity Customer Coalition and others have pointed out that the 36,000 or so customers of MF Global had no such back-up. They relied on the assurance of the Commodity Futures Trading Commission, National Futures Association, CME Group, MF Global, their introducing brokers and even Futures Magazine that their money would be safe in a segregated account.
Thousands of businesses were put at risk and many put out of business by the failure of MF Global to maintain customer segregation. It seems Corzine moved on. You would expect the President to stay as far away from Corzine as possible but that doesn’t appear to be the case.
There appears to be an effort by some to minimize this failure. The safeguards of segregation survived the Refco fraud. The Lehman Brothers failure nearly sent this nation into another “Great Depression” yet U.S. futures customers did not lose a dime because of this safeguard. It didn’t hold here and someone needs to be held responsible.