That darn Chris Christie. Had he not knocked Jon Corzine out of the Governor's mansion, the investors would be $1.2 billion richer.
I am hesitant to comment on any financial scandal for a couple of reasons. One, the public and the press cannot distinguish between fraud and violation of SEC regulations. Two, the press and the public cannot distinguish between fraud and violation of laws of extremely dubious merit. The broad brush of financial scandal is applied with vigor. And of course, the public relations machines are prepared to grind their political axes even before the scandal materializes. The Corzine hearings commence and immediately a Democrat (Peterson from Minnesota) bandstands for Dodd/Frank. The 2008 fiasco had not even materialized when the press had blamed a mythical deregulation that unfortunately, never took place.
So it is with caution that I bash Jon Corzine. But make no mistake about it: If a firm misplaces their client's funds, that firm is guilty of either negligence or fraud. No exceptions. If one can account for a client's loss, one is guilty of ineptitude. You are not assigned a dunce cap, not orange coveralls. Conversely, if you cannot account for a client's funds you might still be assigned a dunce cap but you might also be deemed a threat to society.
To summarize:
Insider trading does not equal fraud.
Parking stocks does not equal fraud.
Losing a client's funds through unwise investments does not equal fraud.
Losing--as in to lose track of or account of--a client's funds is either fraud or gross negligence. No exceptions.
If an investment firm cannot account for one cent of a client's funds, corrective action is required. Accounting perfection is the industry standard. MF Global cannot account for $1.2 billion. This folks, is a genuine scandal!
Jon Corzine will be remembered as either a doofus, a crook or both. The silver lining to this sordid tale is that the good people of New Jersey now have a governor with integrity. MF Global clients are not so fortunate.
2 comments:
It wasn't just his clients who lost money it was his customers who had their margin accounts raided. MF just flat stole the money. When you take money from someone's account and invest it as your own that's theft. When MF's customers tried to liquidate their accounts MF insisted on sending them checks via snail mail instead of the customary wire transfer. When the customers tried to cash the checks they bounced.
See this post. It relates to MF global but the part about the dhttp://teapartyatperrysburg.blogspot.com/2011/11/ann-barnhardt-is-one-tough-woman.htmleath threat is the better part.
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