Brokerage firms hold clients’ money in what are known as segregated accounts. This is the money that brokerage firms hold for when a customer makes a trade. If a brokerage firm goes bankrupt, these monies are never touched—because they never belonged to the firm, and thus are not part of its assets.  Many investors are farmers in the USA and as usual noone wants to accept the blame or can we say its a computer glitch like the ratings companies said was the problem with Collateral CDOs? As the blame for the subprime. Bradley I. Abelow’s  role was Chief operating officer at MF Global + a financial adviser for the Environmental Protection Agency, which listed him as the chairman of its financial advisory board. He is another who is at the centre of the billion $ lost & finds himself the public face of a bankruptcy and admitted to lawmakers that he had no idea how client funds disappeared. Congress and the administration have voiced no concern about Mr. Abelow’s role advising the $8.6 billion government agency on its finances. Watch and see how all this will be shoved under the carpet but this guy knew also as they were desperately trying to meet the margins of the European bonds they had purchased but couldn’t as they had exhausted all their leverage options?? But it isn’t hard to find where the billion $ went to?? And being such a high sum of money these guys knew alright.
MF ventured to trade $6.3billion in Eurozone sovereign bonds which are short-term debt issued by various European nations, most from Italy, in a bid to boost trading profits. If successful it would have filled MF coffers if Corzine could hold to maturity of the debt instruments. For example, suppose the interest rate due under the repos (the repo rate) was 1% and the coupon payable under the bonds 3%. This gave MF Global a 2% profit for doing nothing. If the bonds paid more than 1% then the cost of the repo would be covered and the transaction would generate a profit with virtually no cost for MF Global. The only problem for MF Global was that it leveraged itself up a high Eurozone sovereign debt position. This leverage caused risks that was many times over its asset base. With no balance sheet constraints (repo-to maturity are generally off-balance sheet), MF Global took a net long sovereign debt position of $6.3 billion- a position that was more than five times the firm’s book value, or net worth.
Corzine kept on investing into these bonds with no thought and constraints before they were downgraded. He had leveraged to the hilt. This debt of Greek & Italian bonds got higher and this  led to investors, regulators and ratings companies shaking thinking a default would happen sooner than later. Corzone kept up pace with the margin calls maxing himself to the point of no return but this was not enough. He then used segregated client funds from J.P.Morgan  to try to meet the margin calls as a final ditch but it resulting in the firm’s collapse. Remember this was clients funds just like you having a Bank account in a bank. This is why what he did is illegal and why he says the obvious --- he didn’t know?

 

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Who Gave Permission for Bankrupt MF Global To Sell Italian Bonds To JPM At A 5% Discount To Market Value & allow Soros to buy---MF Global was bankrupt yet sold to Soros???

$2 billion was bought up by Soros who saw $$$signs and a discount purchase of bonds as MF Global were now in the cactus.  With his $$$ as long as he sat on this to meet the margins he would be in profit mode so that’s exactly what he did. This money though was MF Global’s client money moved via the rehypothication process but what George Soros did is perfectly legal it seems in the eyes of the USA???? so no blame on him. The rest of the debt seems to have gone to  KPMG LLP, MF Global’s bankruptcy administrator in London to be sold off. These positions were offered to a number of big investors immediately after MF Global’s collapse to buy the bonds so again the clients money is being used and no thought of this being given back. The sales process was run by MF Global’s London clearing house, LCH Clearnet but as you see the regulatory conditions in the Uk are far more lapse than in other countries making it easy to flaunt the rules.

SAN FRANCISCO (MarketWatch) -- Missing customer funds from MF Global Holdings Ltd. have been found in a custodial  account at J.P. Morgan Chase & Co. The account contained $658.8 million as of Oct. 31, compared with the $633 million in missing funds from client accounts, according to Bloomberg. J.P. Morgan Chase was listed as MF Global's largest creditor in the firm's recent Chapter 11 bankruptcy filing. Now how will they get this matter back from Jp Morgan.??? when they say they never received any funds!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Financial Services Authority's (FSA) new "Special Administration Regime" (SAR) is designed to speed up the return of assets to creditors and improve cross-border co-operation between authorities. One Hector Sants [FSA chief executive] cannot say which firm is actually segregating client funds? Hector Sants has got to be accountable. He palms those owed funds to see KPMG.

With USA in debt & Obama doing nothing about the Banking situation USA Bankers will continue to reap big profits & bonuses while 90% of the population will continue to suffer. Of course Obama is financed by Corzine & others? MF Global chief executive Jon Corzine and senior directors could be forced to pay customers millions of dollars under legal actions being pursued by the bankrupt broker-dealer's trustee. James Giddens, the trustee, said "claims of breach of fiduciary duty and negligence may be asserted against" Mr Corzine and other former top executives, including Henri Steenkamp, the ex-chief financial officer, and Edith O'Brien, former assistant treasurer.JP Morgan, which acted for MF Global, could also face legal action. It has returned about $89m (£58m) of customer property and $518m of MF Global assets. Customer shortfall amounts to about $1.6bn.