MF Global - WTF! Customer money gone missing?

[AC3]

More Good News.......

MF Global Holdings Ltd. acknowledged to federal regulators that money had been diverted out of customer accounts in violation of futures rules and law, according to a federal official.

The Wall Street brokerage, which filed for bankruptcy protection Monday, acknowledged the shortfall amid mounting questions from regulators as they went through the firm's books while trying to facilitate a sale to Interactive Brokers Group Inc., the official said. Regulators still don't know where the customer funds went, who directed the move or how widespread the practice was, the official said.

 

[achilles28]

Quote from AC3:

What do you expect when you assume all the slugs from Refco into a new company.

New dress on the old whore.

lol

Seriously...why is this happening? What's the big thrill from tanking a company?

There must be an angle here. Maybe they leverage it up to buy debt in dummy corporations they control, and just pay themselves a huge dividend and collapse the host? Sort of like transfer pricing to offshore holding companies, but in reverse... transfer equity......The chief from Refco basically did that. Loaned himself money to companies he controlled to buy shitty debt from refco to hide losses on bad trades. Although it's wiki, says there a detailed list of Refcos transactions were never released to the public.

 

[AC3]

Quote from achilles28:

lol

Seriously...why is this happening? What's the big thrill from tanking a company?

There must be an angle here. Maybe they leverage it up to buy debt in dummy corporations they control, and just pay themselves a huge dividend and collapse the host? Sort of like transfer pricing to offshore holding companies, but in reverse... transfer equity......The chief from Refco basically did that. Loaned himself money to companies he controlled to buy shitty debt from refco to hide losses on bad trades. Although it's wiki, says there a detailed list of Refcos transactions were never released to the public.

At least with Refco they would finance hedge Funds when they were just becoming a "thing" and when the trades went south Refco just assumed the liabilities and kept them trading with more capital ... as long as that trading was done at Refco and they would keep making money off the trading all the while waiting for original trades to make their way back into the money until they didn't and well you know how that worked out.

 

[atticus]

Quote from achilles28:

lol

Seriously...why is this happening? What's the big thrill from tanking a company?

There must be an angle here. Maybe they leverage it up to buy debt in dummy corporations they control, and just pay themselves a huge dividend and collapse the host? Sort of like transfer pricing to offshore holding companies, but in reverse... transfer equity......The chief from Refco basically did that. Loaned himself money to companies he controlled to buy shitty debt from refco to hide losses on bad trades. Although it's wiki, says there a detailed list of Refcos transactions were never released to the public.

Ego? Hubris?

Refco was a pure scam as you outlined, but this tool Corzine didn't even go mkt neutral with the CDS (which would've been futile as well).

Guy should kill himself.

 

[benwm]

I always like to reflect what was said in the run up to a corporate failure...

On October 24th, MF Global said the portfolio is “sound and well structured" following Moody's Investor Service downgrade to Baa3.

"All of the European government securities mature by December 2012 before the expiration of the region’s rescue fund, the European Financial Stability Facility", the company said.

“We are confident that we have the resources, capital, liquidity and expertise to successfully manage our European exposures to their end date maturity of December 2012,” Diana DeSocio, a spokeswoman for the broker, said in the e-mailed statement.

“The maturity characteristics, ratings profile and European support facility for lower rated credits reinforce our view that that the portfolio is sound and well-structured.”

 

[joneog]

MF Global Inc. and SG Americas Securities, LLC have been added to the list of primary dealers, effective February 2, 2011.
February 2, 2011

...

MF Global has been deleted from the list of primary dealers, effective October 31, 2011.
October 31, 2011




that didn't last long.

 

[Daal]

Quote from benwm:

I always like to reflect what was said in the run up to a corporate failure...

On October 24th, MF Global said the portfolio is “sound and well structured" following Moody's Investor Service downgrade to Baa3.

"All of the European government securities mature by December 2012 before the expiration of the region’s rescue fund, the European Financial Stability Facility", the company said.

“We are confident that we have the resources, capital, liquidity and expertise to successfully manage our European exposures to their end date maturity of December 2012,” Diana DeSocio, a spokeswoman for the broker, said in the e-mailed statement.

“The maturity characteristics, ratings profile and European support facility for lower rated credits reinforce our view that that the portfolio is sound and well-structured.”

This might be even correct. I've read that their euro bonds are mostly trading at 99c on the dollar

 

[joneog]

Quote from Daal:

This might be even correct. I've read that their euro bonds are mostly trading at 99c on the dollar

Doesn't matter, it's a funding issue.

 

[zdreg]

Quote from joneog:

Doesn't matter, it's a funding issue.

why is there a funding issue if they trading .99
if mf is desperate lend them money with 10% interest rate and the s.t. bonds as collateral.

 

[justrading]

Quote from zdreg:

why is there a funding issue if they trading .99
if mf is desperate lend them money with 10% interest rate and the s.t. bonds as collateral.

The CFTC told MF Global in September that it was over-valuing some of its European bonds and told the company to put up more cash.

After that, credit rating agencies downgraded MF Global's bonds to junk status, and trading partners made it put up more cash to guarantee its transactions.

Source: http://www.bbc.co.uk/news/business-15540221