MF Global Trustee - Commingling Shortfall May Be Double Previous Estimate,Could Reach "$1.2 Billion"

[stockholmer]

http://www.zerohedge.com/news/mf-global-trustee-says-commingling-shortfall-may-be-double-previous-estimate-could-reach-12-bil

The day after MF Global filed, we calculated http://www.zerohedge.com/news/mf-global-client-theft-estimate-doubled-15-billion that contrary to widely accepted media expectations that the client theft at MF Global was limited to "only" $600 million, the true client loss (and thus, MF Global executive felony) was in fact up to $1.5 billion. Sure enough, three weeks in the Trustee has come to see things in a comparable light. From Reuters: "The trustee liquidating MF Global Holdings Ltd'sbroker-dealer unit said on Monday that the apparent "shortfall" of customer funds may be larger than the futures brokerage had reported prior to its bankruptcy. "The trustee believes that even if he recovers everything that is at U.S. depositories, the apparent shortfall in what MF Global management should have segregated at U.S. depositories may be as much as $1.2 billion or more," the trustee, James Giddens, said in a statement. He added that the amount could change. Giddens also said he expects in early December to transfer 60 percent of what is in segregated customer accounts for U.S. futures positions, pending court approval. He said the transfer would require $1.3 billion to $1.6 billion to implement, exhausting much of the assets under the trustee's control.

MF Global was run by former Goldman Sachs & Co chief and New Jersey governor Jon Corzine before its Chapter 11 filing on Oct. 31. The filing came after the New York-based company revealed that it made a $6.3 billion bet on European sovereign debt. Corzine resigned on Nov. 4." In other news, major Chicago-based exchanges are fine (no seriously: they got some very sweet preferential terms in the account transfer... to the detriment of former MF Global accounts). And it goes without saying that Corzine has not even been questioned yet.

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Tiny Rule Change at Heart of MF Global Failure: William D. Cohan (Internal Repo's and Rule 1.25)

http://www.businessweek.com/news/2011-11-17/tiny-rule-change-at-heart-of-mf-global-failure-william-d-cohan.html

Nov. 16 (Bloomberg) -- Laurie R. Ferber has quite a resume. She is currently the general counsel of MF Global Holdings Ltd., the New York-based futures and commodities brokerage that filed for bankruptcy on Oct. 31, listing some $40 billion in liabilities.

Before joining MF Global in 2009, a year or so before Jon Corzine became its chairman and chief executive officer, Ferber was general counsel and chief regulatory officer at the International Derivatives Clearing Group LLC, which clears interest-rate swaps.

Before that, she spent more than 20 years at Goldman Sachs Group Inc., where first she was general counsel for J. Aron & Co., a commodities business that Goldman Sachs bought in 1981, and then was the co-general counsel of Goldman’s principal business, known as FICC -- for Fixed Income, Currency and Commodities -- when J. Aron was merged into the rest of Goldman’s fixed-income division.

But at the moment, her greatest significance may be as a long-time advocate for revisions to a little-known and vastly underappreciated Commodities Futures Trading Commission rule called Regulation 1.25.

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Breaking: Jon Corzine, Seven Banks Sued for MF Global Collapse

http://nymag.com/daily/intel/2011/11/corzine-seven-banks-sued-for-mf-global-collapse.html

A lawsuit http://newsandinsight.thomsonreuters.com/Legal/News/2011/11_-_November/Seven_banks_sued_over_MF_Global_collapse/ seeking damages for investors in the now-bankrupt MF Global names former CEO Jon Corzine, along with units of Bank of America, Citigroup, Deutsche Bank, Goldman Sachs, Jefferies, JPMorgan Chase, and Royal Bank of Scotland, who all collected fees, but failed to foresee the firm's collapse, according to the suit. Some of MF Global's customers will start having access to their money, as 60 percent of the company's cash accounts have been unlocked, while many others still have their life savings frozen.

[indepat]

1. It's a rotten shame that some criminal charges cannot be made: must have been just some bad

decisions, and we all know bad decisions are not criminal. :patriot: