ML-Implode News - Trustee Suggests MF Global Misused Customers' Money

Contrary to vague and self-serving assertions that MF Global's affairs in its last week were so chaotic that no one really knew what was happening, some people at the firm obviously knew only too well, and took desperate measures that ignored clients' interests. In doing so, they violated the most basic obligation of any brokerage firm, which is to protect customers' assets.
More broadly, the report makes clear that the notion that customer assets are safely segregated, at least at commodities brokers, is an illusion thanks to a lax calculation of customer assets allowed by the Commodity Futures Trading Commission, which regulates commodities brokers.
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It's apparent from Mr. Giddens's report that as MF Global's financial woes deepened last summer and fall, protecting customer assets was among the least of Mr. Corzine's priorities. Mr. Corzine testified to Congress that he never knowingly asked anyone to break the law, and nothing in the report explicitly contradicts that. At the same time, he made demands for cash that appear to have left employees no alternative but to divert customer assets.

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Although MF Global reported only the alternative calculation to regulators, it prepared its own segregation report every day that showed the true extent of its liabilities.

Relevant:

Trustee Suggests MF Global Misused Customers' Money