MF Global has been around in one form or another since 1783. It survived over 225 years until former democrat senator and former New Jersey governor (until Chris Christie kicked his ass) Jon Corzine became CEO in 2010.
Oh yeah - Corzine was also one of obama's top economic advisers (Obama: Corzine Is “Our Wall Street Guy”). He helped craft obama's failed stimulus package. VP Joe Biden called Corzine "the smartest guy I know in terms of the economy and on finance.”
As part of MF Global's failure, $1.2 Billion - that's Billion with a "B" - of its customers' money is missing. If you're like me, you keep pretty close track of every dollar. The thought of 'misplacing' $1.2B is literally incomprehensible. Yet Corzine, testifying in front of congress, stated "I simply do not know where the money is..."
Needless to say, that isn't going over very well.
It's been more than six weeks since the bankruptcy of Jon Corzine's MF Global, and everyone from the FBI to Congress to frustrated customers is still trying to figure out what exactly went wrong.With any luck, this story will play out over the next eleven months, keeping the Conzine-obama-Biden connection in front of voters during the upcoming campaign.
In the commodities market, customer funds entrusted to firms like MF Global are supposed to be sacrosanct, protected even in the event of a bankruptcy. A firm can invest these funds for its own purposes, but only provided that it puts safe forms of collateral in place, such as U.S. government bonds, to keep the value of accounts whole.
If these procedures aren't followed, the use of customer funds for a firm's own purposes is a serious violation of industry rules that may also carry criminal liability...
In the meantime, here's a pithy summation and illustration of the MF Global debacle.
During the Age of Obama, the scandals come so thick and fast that you can hardly remember them all, let alone keep track of their details. One of the most recent is MF Global, which not only went under–with former Democratic Senator and Governor of New Jersey Jon Corzine at the helm–but misplaced $1.2 billion in client funds along the way. How do you lose track of a billion dollars? ... Michael Ramirez has the definitive answer: