Chilton today stated that the CFTC (minus Corzine's buddy Gensler) is aggressively pursuing the case and if somebody has done something with the money, it's patently illegal.
Perhaps the biggest news (if true) is that Chilton states that the CFTC has begun a review of 10-12 other futures brokers to determine whether they separate customer funds, or commingle (steal) them and pledge them as assets for firm loans as was allegedly done by MF Global. This has potentially huge implications as if MF Global was using customer funds for firm use, you can bet that Bank of America, Goldman Sachs, Morgan Stanley, and JP Morgan are praying by the same rules.
The $593 million shortfall in client money at MF Global Holdings Ltd., the broker that filed for bankruptcy on Oct. 31, appears to result from a "massive hide- and-seek ploy," Bart Chilton, a commissioner at the U.S. Commodity Futures Trading Commission, said today.
This isn't just a lost and found inquiry; it's a full-on effort to get to the bottom of what appears to be a massive hide-and-seek ploy," Chilton said in an e-mail statement.
"It's a distinct possibility, some would say probability, that somebody has done something with the money, and that it's not going to be 'all of a sudden discovered' with an innocent explanation," Chilton said. "If that's the case, it's patently illegal. I don't know yet. Our investigation will uncover that, and we're aggressively pursuing this."
The CFTC also began a review of futures brokers to determine if client funds are properly segregated. The initial review will include between 10 and 12 futures brokers and the CFTC hasn't set a deadline for the review, a person familiar with the review said.
The CFTC also began a review of futures brokers to determine if client funds are properly segregated. The initial review will include between 10 and 12 futures brokers and the CFTC hasn't set a deadline for the review, a person familiar with the review said.
