The NY Times reports that federal investigators now suspect that the theft of $1.5 billion from MFG clients was not really fraud at all, merely 'sloppy accounting'.
So lets get this straight. In the week leading up to MFG's bankruptcy Oct 31st, MFG clients who requested withdrawals were MAILED checks rather than sent wire transfers. Of course, the checks bounced when clients received them, meanwhile, MFG WIRED $200 million of clients' funds to JP Morgan.
You see, if regulators determine fraud was involved, that would place clients back at the front of the line. We can't have that after all the work to structure the bankruptcy under the securities code rather than as a commodities brokerage, now can we?
That ANY regulator could possibly conclude this blatant theft was merely sloppy accounting only proves that the regulators are complicit in the entire operation.
MF Global customers who closed their accounts in the brokerage firm’s final days have been fuming for months about how the firm mailed checks to them, instead of promptly transferring the money electronically as usual. Many of those checks arrived after the bankruptcy filing, and subsequently bounced.
Now customers are taking action, trying to show that MF Global delayed the return of their money to cover the firm’s own bills and stay afloat. They are amassing client documents and submitting them to federal investigators in hopes of building a criminal case against MF Global executives.
While clients of MF Global say that it was unprecedented for the firm to abandon a longstanding business practice to wire money to customers who were closing accounts, the documents are not definite proof of wrongdoing. In recent weeks, federal authorities have come to suspect that MF Global’s actions amount to sloppy record-keeping, rather than criminal fraud...
If prosecutors file criminal charges, customers will have a better chance of getting their money back from the banks and other financial firms that currently have the funds. Under the law, the trustee working on behalf of customers has more leverage to recover the funds in the event of fraud.
“We believe that sufficient evidence exists of intent to commit an actual criminal fraud,” according to a memo from the Commodity Customer Coalition, which represents farmers, grain elevator operators, hedge funds and other MF Global clients.
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