Don't read this if you have high blood pressure or if you are a client of MF Global's, whose money is still held by JP Morgan.
1. JPMorgan is put on MF Global bankruptcy committee on November 7, 2011
2. Two weeks later, JPMorgan buys MF Global's 4.7% in LME for 39 million in a "competitive bidding" process.
3. 7 months later, on June 15 2012 the LME gets an offer for $2.2 billion from China's HKEX, making JPM's stake worth $103 million.
4. JPMorgan makes over 100% cash on cash return in 7 months while MFGlobal money is still stuck at JPM.
In the meantime, Jon Corzine was, is and will always be a free man.
Seems kind of simple when you put it that way.
It's always interesting when the thieves start turning on each other.
Click on the photo for the entire story.
In MF Global, JPMorgan again at center of a financial failure
(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.
The following is the punch line to a white paper by John Roe, and James L. Koutoulas, Esq. concerning the disposition of stolen assets trapped in the MF Global fiasco.
Click anywhere on the excerpt below for a very short and well written paper which also serves as a primer on the how, the what, the who and the why of commodities trading.
Way super double highly recommended.
By subordinating customers with collateral in segregated funds to creditors of MF Global's estate, the Trustee is essentially making the creditors the beneficiary of a criminal act. If MF Global comingled segregated funds with corporate assets, it was a criminal act. Paying such a creditor's claim with a portion of those comingled funds would make them a beneficiary of that crime. Paying JP Morgan with an Iowa farmer's money is not only morally and legally wrong, it risks the future of the American economic model.
It's true mission however is to assist large Wall Street Banks in their theft of middle class America's wealth.
Click this little gear here for our recent piece concerning former Goldman Sachs great, Democratic Senator from New Jersey (is that better Robert?), Democratic Governor of New Jersey, well known Democratic and Obama fundraiser, and MF Global CEO John Corzine who famously lobbied the CFTC in order to prevent the instituition of rules associated with the Dodd-Frank legislation that would have prevented MF Global from commingling client's money with it's own and thus would have prevented this 630 million dollar theft.
When somebody starts telling you the game is rigged in favor of the "Big Banks", this is exactly what they're talking about.
Click anywhere below for the entire Robert Lezner, Forbes article where you will learn that Former Goldman Sachs star trader, United States Senator, Governor of New Jersey, well know Obama bundler and MF Global CEO John Corzine met no fewer that 10 times with the Commodity Futures Trading Commission in order to see to it that this vile rule of the supposed government regulator, did not change as a result of Dodd-Frank.
After an intense day of investigation, I have just discovered that a CFTC (Commodity Futures Trading Commission) rule(1.29) allowed Jon Corzine’s MF Global to use the margin and cash in customers heretofore segregated accounts to amass a risky $6.3 billion investment in European sovereign debt that backfired. Nor did Corzine have the obligation to inform any of these customers he was gambling with their money. Or that he was intending to keep all the profits for himself and his troubled firm. Nothing for the customers.
The language of Rule1.29 allows “The investment of customer funds in instruments described in 1.29 shall not prevent the futures commission merchant (MF Global) or clearing organization so investing such funds and retaining as its own any increment or interest resulting therefrom.” Increment refers to any trading profits or gains.
The criminal division of the Justice Department in New York — as well as the SEC and the CFTC and members of Congress– are investigating whether any laws were violated and if so, whether any criminal charges can be brought. As of 3pm today, there has been no sign of the missing $633 million. My sources believe it was probably grabbed by the institutions that made the margin calls on MF Global as the European bonds sank in value.
This shocking loophole, which is available to all commodity traders, whether giant ones like Goldman Sachs or members of commodity exchanges, means that huge risks are being taken with money that does not belong to the trading firms– without the customers having any idea of the danger they are in. As Andy Abraham, a futures trader in Israel put it to me today; “this means they can take segregated funds and leverage them to kingdom come. It means nothing is safe.”
This rule, which has been in effect since 1974, is shocking and highly irregular since it allows any futures dealer to use customers money for its own selfish purposes– and never inform its customers it is doing so. What’s even more unfair is that the dealer(MF Global) gets to keep all the income and the trading profits, if any from a transaction that uses other people’s money– not its own house capital. That is unless some prior arrangement about sharing profits was made privately beforehand with the client. None of the MF Global clients I’ve spoken to today had the foggiest notion about this arrangement– which at minimum is outrageously unfair to the rule that the customer comes first. All losses must be made up by the dealer, which in this case may be totally impossible.
Just a small example of the rot that is our government.