So let's get this straight. Not only did JPM make a collateral grab when MF Global declared bankruptcy on Oct 31st, seizing clients' cash and even Phyzz, they INTENTIONALLY pushed MFG towards bankruptcy by delaying the arrival of the loans for which they received the MFG clients' assets as collateral!!!
(Reuters) – In late October, as MF Global Holdings Ltd teetered toward bankruptcy, Jon Corzine phoned his close-knit circle of Wall Street friends for help.
His firm, facing demands from customers and other firms for cash, needed to sell billions of dollars in securities to raise the money. As the week progressed, MF Global executives came to believe that JPMorgan Chase & Co., one of MF Global’s primary bankers and a middleman moving that cash, was dragging its feet in forwarding the funds.
Corzine phoned Barry Zubrow, then JPMorgan’s chief risk officer, to question the slow payments. Corzine also called William Dudley, president of the Federal Reserve Bank of New York, to update him on MF Global’s status and told him that payments were slow to arrive from JPMorgan and others. Dudley said he’d monitor the situation.
The delays contributed to a serious cash shortage at MF Global, according to people familiar with the matter. These people say the firm started trading one day in late October with $600 million in cash and spent the whole day selling securities, only to end with just $200 million in cash.
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