NYT UPDATE: 'No Criminal Case Likely Against Jon Corzine'
From an exclusive NYT story published late Wednesday, Jon Corzine will skate free and wants to start a new hedge fund.
Perfect.
A criminal investigation into the collapse of the brokerage firm MF Global and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives.
After 10 months of stitching together evidence on the firm’s demise, criminal investigators are concluding that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear, according to people involved in the case.
The hurdles to building a criminal case were always high with MF Global, which filed for bankruptcy in October after a huge bet on European debt unnerved the market. But a lack of charges in the largest Wall Street blowup since 2008 is likely to fuel frustration with the government’s struggle to charge financial executives. Just a few individuals — none of them top Wall Street players — have been prosecuted for the risky acts that led to recent failures and billions of dollars in losses.
In the most telling indication yet that the MF Global investigation is winding down, federal authorities are seeking to interview the former chief of the firm, Jon S. Corzine, next month, according to the people involved in the case. Authorities hope that Mr. Corzine, who is expected to accept the invitation, will shed light on the actions of other employees at MF Global.
Those developments indicate that federal prosecutors do not expect to file criminal charges against the former New Jersey governor. Mr. Corzine has not yet received assurances that he is free from scrutiny, but two rounds of interviews with former employees and a review of thousands of documents have left prosecutors without a case against him, say the people involved in the case who spoke on the condition of anonymity.
Mr. Corzine, in a bid to rebuild his image and engage his passion for trading, is weighing whether to start a hedge fund, according to people with knowledge of his plans. He is currently trading with his family’s wealth.
Continue reading (there's much more)...
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Corzine's congressional testimony:
This clip from Corzine before the House is exhibit A in the cesspool of DOJ corruption that has resulted in Jon Corzine not currently residing in prison for stealing $1.6 billion from segregated client accounts during the collapse of MF Global.
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Here are the real reasons Jon Corzine won't be going to prison:
Obama loves Jon Corzine.
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Joe Biden loves Jon Corzine.
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At the 1:40 mark, note the painful irony.
"Literally, the first guy I called was Jon Corzine. Literally."
Read these links:
Email Ties Corzine to Missing Funds - Janet Tavakoli
Corzine Ordered Funds Moved To JP Morgan, Memo Says - Bloomberg
DOJ Lawyers, Holder Were Partners In Firm That Represented MF Global
Letter From Satan: Dear Brother Corzine (Must Read)
Aug 21, 2012 at 3:12 PM
Reader Comments (19)
Keep up the 'good' work.
J.H.C.
Nice photo DB.
AHAHAAAAAHAA! Yeah right rofl.
For example, the dolts at Deal Book write:
"But internal e-mails suggest that Mr. Corzine did not know the origin of the funds. An e-mail reviewed by The New York Times shows Ms. O’Brien explicitly stated that the money belonged to the firm, not customers. It is possible that with the books in disarray, Ms. O’Brien was not aware that customer money was in jeopardy."
As Janet points out, Corzine had to know or at least suspect that the 200 mil in MF's account came partly or wholly from customer funds (because MF was already short of funds, hence the UK overdraft). As Janet puts it, how else could funds appear in a non segregated account at MF Global -- it either "magically appeared in [MF's] 'nonseg' account" or it was stolen from customers.
But even more damning, JPM was so suspicious about the source of the funds that they sent a letter for Corzine to sign asserting the funds were not from improper transfers, etc. Corzine replied his people would "look at it." Then he sent the letter to someone else in the firm to sign instead. But then MF Global asked JPM for revisions to the letter before they would sign. This went back and fourth several times and no letter was ever signed. In other words, Corzine stalled for time, hoping that he could set the books aright, keep the firm from blowing up and no one would ever be the wiser.
Here's Janet's full take:
http://www.huffingtonpost.com/janet-tavakoli/renewed-hope-that-jon-cor_b_1466744.html
Then again, MF Global were Covington and Burling clients, and other people at DOJ came directly from the very firm overseeing their BK.
It's bull shit, clearly, and Deal Book should write at least an update pointing out where Tavakoli gets it wrong. I'll be holding me breath...
http://dailycaller.com/2012/08/07/report-cronyism-political-donations-likely-behind-obama-holder-failure-to-charge-any-bankers-after-2008-financial-meltdown/
Looks like Ann Barnhard was right DB here's Karl's take on the situation
Is That A Sentinel -- Or A Siren?
snippet..
The problem with this decision is rather simple -- it eviscerates the general principle in the law that one cannot grant a thing one does not have.
Money doesn't disappear. The investigators know where every single penny went. They know precisely who has it. And under long-standing and essentially inviolate legal principle, they also know damn well that whoever has it does not have title to it and cannot acquire title as the entity who granted possession (MF Global) didn't have title to those funds and thus could not convey what it did not have.
No matter; your money is gone.
Your money in any brokerage account can be just as easily gone.
Your money in a bank or credit union can be just as easily gone. The FDIC, incidentally, has a tiny fraction of the total deposit base available; it cannot cover your deposits in any real failure of the system, as it doesn't have it (and neither does Treasury.)
Any property, in short, that you do not personally possess within reach of your fingers..... can be and will be, if a rich and politically powerful person steals it, gone.
in full
http://market-ticker.org/akcs-www?post=210250
snippet
RED ALERT: IT'S OPEN SEASON ON ALL CUSTOMER FUNDS
snippet...
What this means is that even if Jon Corzine is somehow dragged into court by private citizens, because you know damn good and well that the Justice Department will never, ever touch him, Corzine now has a legal precedent, likely from a bribed or otherwise coerced Federal Appeals Court, explicitly stating that an FCM can use customer deposits to pay its debts, and that the customers themselves are subjugated and have basically no legal right to their own monies, no matter what the law says, or what legal assurances, claims or guarantees are made to that customer about their funds held with an FCM or any other brokerage or depository institution. The "secured" party at the front of the line will always be the mega-bank who made the fraudulent loan using the stolen customer funds as collateral.
In other words, all customer funds in the United States are now the legal property of JP Morgan, Goldman Sachs, BNYM, or whichever megabank is the counterparty on the loans the FCM or depository institution takes out in order to fund its mega-levered proprietary in-house trading desks.
For the love of God, I don't know what more there could possibly be to say to snap you people out of your normalcy bias trance. You have GOT to get ALL MONIES out of the financial system NOW. This ruling sets precedence for every depository institution, not just futures brokerages. It is now legal in the United States for any financial institution to steal customer funds, borrow money against those funds for the uber-levered proprietary trading use of the financial institution, and the customers have ZERO CLAIM TO THEIR OWN FUNDS once they are in the custody of the financial institution.
The court has ruled that once your money passes out of your PHYSICAL POSSESSION, and I mean PHYSICAL possession, it is no longer yours, and you have no legal claim or legal recourse to it when it is stolen. This includes BANK ACCOUNTS. Money in a bank is in the possession of the BANK, not you. Do you comprehend this? The entire system is utterly devoid of any integrity or genuine security and is breaking down catastophically before our very eyes. You HAVE to comprehend that your money sitting in an account is no longer legally yours. You have to force your brain to process and comprehend this, no matter how incomprehensible it may seem. IT IS OVER. This is Marxist hell. We have arrived.
This ruling and precedent will be used by every brokerage, every bank, every insurance company and every pension fund to deny you your money when the financial system finally collapses, be it on Monday, or be it two years from now.
DO YOU UNDERSTAND?
You have GOT to GET OUT.
And all of this goes straight back to the criminal mafia that is the National Futures Association, and the fact that they have not actually been auditing those firms who were in the "cosa nostra", and allowing Ponzi schemes to operate with full bureaucratic protection for decades. Sentinel. PFG Best. The legal precedent enabling this protection racket and blatant fraud and thievery is fully in force, and what Corzine did at MF Global is now legally PROTECTED.
in full
Ann's link here
http://barnhardt.biz/
also see
http://dailybail.com/home/letter-from-satan-dear-brother-corzine.html
Now-Bankrupt MF Global, Ex-CEO Corzine Had Deep Pockets For Democrats
http://www.wnyc.org/npr_articles/2011/nov/04/now-bankrupt-mf-global-ex-ceo-corzine-had-deep-pockets-for-democrats/
LC, thanks for Barnhardt stuff. She's a real barracuda. Man alive, she's even more blunt on camera than on paper:
http://jessescrossroadscafe.blogspot.com/2012/08/this-is-interesting-discussion-on.html
Ann Barnhardt, Yves Smith, Janet Tavakoli, Nomi Prins, Teri Buhl, etc... I'd except Max Keiser from the clear pattern of the fiercest truth-tellers, but even he's never farther than a whip's length from Stacy Herbert.
“All of this politics that’s going on—it is THEATER. It is THEATER. It is television entertainment for people whose IQ’s are 15 to 20 points higher than the average person who’s watching Dancing with the Stars.”
--Ann Barnhardt at 17:30 in the video above.
It's obvious that Corzine knew the funds were from client accounts.
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By Janet Tavakoli
Oct 28: O'Brien writes of Corzine's 'Direct Instructions' to transfer $200M
By now every officer of MF Global should have been on red alert that MF Global was short of cash and was at risk of using customer funds to meet its daily needs, and this is prohibited.
On the morning of Oct. 28, three days before MF Global's bankruptcy, JPMorgan contacted MF Global about an overdraft in London. A Congressional memo circulated March 23, 2012, quoted an email from Vinay Mahajan, MF Global's global treasurer. Vinay wrote JPMorgan was "holding up vital business in the U.S." and called for funding "A.S.A.P." Bloomberg News reported that on October 28, Edith O'Brien, an assistant treasurer for New York-based MF Global, wrote an email saying that a $200 million transfer of funds was "Per JC's direct instructions." It turns out that part of that money was customer money, and the transfer was impermissible. ("MF Global's Corzine Ordered Funds Moved to JPMorgan, Memo Says," by Phil Mattingly and Silla Brush, Bloomberg News, March 23, 2012.)
October 28's Smoking Gun: JPMorgan Doesn't Buy Corzine's Story
Jon Corzine testified before the Senate Agriculture Committee in December: "I never gave any instructions to misuse customer money, never intended to give any instructions or authority to misuse customer funds, and I find it very hard to understand how anyone could misconstrue what I've said as a way to misuse customer money." But that isn't the standard to which Corzine is held. If investigators can show he knew of the risk that customer money might be included in the $200 million transfer he ordered, Corzine faces potential legal liability. ("MF Global's Corzine May be Liable if Customer Risk Known," By Linda Sandler and Phil Mattingly, Bloomberg News, Mar 25, 2012.)
Money went from a U.S. customer account to a U.S. MF Global account, and then it was transferred to a UK account. Even those who wish to claim Corzine slipped through a dubious loophole in the UK are out of luck. The original impermissible transfer of money occurred from a U.S. customer account to a U.S. based MF Global account. In my opinion, Corzine knew or should have known there was a strong probability that customer funds would be transferred. As it happens, they were.
On October 28, JPMorgan didn't buy Corzine's story, either. Having been a risk manager myself, I believe Barry Zubrow, JPMorgan's chief risk officer, did exactly the right thing. He called Jon Corzine to get him to verify that the funds belonged to MF Global and that none of the money was customer money. Zubrow, an outsider, was well aware of the possibility that customer funds had been transferred. It's implausible that Corzine wasn't aware of the potential impermissible transfer of customer funds when he gave the authority to make the transfer. By doing its job, JPMorgan removed Corzine's ability to credibly deny knowledge of the potential problem.
http://dailybail.com/home/we-havent-forgotten-you-jon-corzine.html
Doh! I didn't realize you had posted Janet's piece or I would have just linked to the Bail.
No worries, I hadn't even noticed.
Any chance you or Cheyenne wanna write a really short piece called simply:
Why Jon Corzine Is Guilty
Compare and contrast JT with the Dealbook piece.
Then we can publish it and send it to Sorkin for a Dealbook response.
I understand if you're too busy. Trust me, I understand.
The Accounting Trick Behind Thirty Years of Scandal
http://business.time.com/2012/08/15/the-accounting-trick-behind-thirty-years-of-scandal/
Wells Fargo Is A Little Sorry That It Sold Securities It Knew Nothing About
http://dealbreaker.com/2012/08/wells-fargo-is-a-little-sorry-that-it-sold-securities-it-knew-nothing-about/
Beware the Money & Bond Markets
Breaking a Buck, Maybe, but Not Taxpayers’ Backs
snip
MARK Aug. 29 on your calendar. It’s the day all of us could end up on the hook for a big future bailout.
The Securities and Exchange Commission is expected to vote that day on a proposal that would limit taxpayers’ exposure to the $2.6 trillion world of money market mutual funds. The plan would reduce the odds of having to rescue teetering funds when the next financial crisis comes — and it will
more
http://www.nytimes.com/2012/08/12/business/sec-vote-is-near-on-money-market-fund-plan-fair-game.html?_r=2
N.Y. Fed says municipal bond defaults higher than ratings agency counts
http://www.washingtonpost.com/business/economy/ny-fed-says-municipal-bond-defaults-higher-than-ratings-agency-counts/2012/08/15/233bb780-e6f4-11e1-8741-940e3f6dbf48_story.html
Risk Builds as Junk Bonds Boom
http://dealbook.nytimes.com/2012/08/15/risk-builds-as-junk-bonds-boom/?ref=business
Think Muni Bonds Are Safe? Recent Stats Say Otherwise
http://www.cnbc.com/id/48688870
WAKE UP AMERICA!!!
WE THE PEOPLE NEED TO UNITE AS 1
PEACEFULLY PROTEST ALL THIS FRAUD
AS WELL AS ALL THEIR WARS
AUDIT THE FED TO EXPOSE THE FRAUD & END IT
AUDIT ALL POLITICIANS TO SEE WHAT OLIGARCHS ARE FUNDING THEIR CAUSE
BOYCOTT MAINSTREAM MEDIA & PRESS UNTIL THEY LEARN TO BE A GOOD WATCH DOG FOR
WE THE PEOPLE!!!
Indeed not enough time to draft a criminal referral for Jon "I'm telling you, this guy is protected from up on high by the Prince of Darkness"** Corzine. However, I have begun writing an honest review of Barofsky's "Bailout," since apparently no one in MSM has bothered to mention what it's actually about.
**The Usual Suspects (1995)