MF Global debacle grows more outrageous

Fast forward to today’s announcement that Hong Kong Exchanges & Clearing Ltd. has agreed to pay 1.39 billion pounds ($2.15 billion) for the LME, making JP Morgan’s interest  $103 million, roughly a 160% profit in seven months.

Meanwhile the trustee for MFGI is still negotiating with JP Morgan over possible customer money still stuck at JP Morgan. Commodity Customer Coalition (CCC) co-founder James Koutoulas indicated more than a week ago that sources within JP Morgan say as much as $600 million in former MF Global customer money is still stuck at JP Morgan.

JP Morgan Chairman and CEO Jamie Dimon was briefly questioned on MF Global during hearings of the Senate Banking committee earlier this week. Senator Jon Tester (D-Mont.) asked Dimon why it took seven months for JP Morgan to return $168 million in margin money to the MFGI estate. Dimon basically just said he was cooperating with authorities.

Unfortunately Tester did not ask about the $600 million in customer money many believe is still being held there.

Now we learn that JP Morgan may not only be hanging on to customer money but was allowed to buy assets from part of the firm, even though it had failed to protect customer money, and may soon turn a huge profit on it.

Meanwhile, customers have still not been made whole.



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About the Author
Daniel P. Collins

Editor-in-Chief of Futures Magazine, Daniel Collins is a 25-year veteran of the futures industry having worked on the trading floors of both the Chicago Board of Trade and Chicago Mercantile Exchange. Dan joined Futures in 2001 and in 2005 he was promoted to Managing Editor, responsible for overseeing all the content that went into Futures and Dan’s incisive reporting and no-holds barred commentary places him among the most recognized national media figures covering futures, derivative trading and alternative investments.

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