Armstrong states that the practice is routine Wall Street practice, and that the MF Global scandal is MUCH LARGER than anyone suspects.
While the CFTC denies any responsibility in the matter, Armstrong points out the problems with heading regulatory government agencies with those who have major conflicts of interest due to close ties with the people they are supposed to be regulating (cough, cough, Goldman Sachs).
Armstrong says it best: The integrity of the entire world financial system is at stake and nobody seems to give two shits about ending the corruption!
The MF Global scandal may be far worse than anyone suspects. The big New York Institutions routinely post client’s collateral and cash in the REPO market to make more money without notification to clients.
Based upon reliable sources, staff inside the SEC had proposed a rule that brokers could no longer post client’s assets in REPO. Corzine, I believe, hopped on a plane and flew down to DC and met with Mary Shapiro, the head of the SEC to prevent that rule from being implemented. According to sources, Shapiro agreed and stopped the change in rules and that allowed MF Global to continue to use client funds for their own trading.
Mary Shapiro has denied that the collapse of MF Global was any failure to do with regulators. The head of the Commodity Futures Trading Commission, Gary Gensler, recused himself because of concerns of conflict of interest since he and Corzine held prominent positions at Goldman Sachs at the same time during the late 1990s. Does anyone really think he will let his underlings prosecute Corzine? This incestuous relationship between regulators and the big New York firms is destroying the integrity of the financial system and making the United States a laughing stock. How can anyone with a potential conflict of interest be put in charge of a regulator?
Based upon good sources, Corzine met with Shapiro PRIOR to the collapse to prevent a rule that would have in fact prevented the demise of MF Global. Who is regulating the Regulators?
The integrity of the entire world financial system is at stake and nobody seems to give two shits about ending the corruption.
SEC's Lack of Regulatory Authority Now What's Going On
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