We wrote earlier about the MF Global bankruptcy and scandal — click here for a quick backgrounder (scanning through the bullets is all you need to do).
The bottom line:
1. It looks like MF Global, led by Jon Corzine, may have stolen funds from customer brokerage accounts to cover its own losses, but
2. Jon Corzine is a member in spades of the New Untouchables, the Top 1% of the 1%. He's an ex-senator, ex-governor, ex-CEO of Goldman Sachs and reportedly very very rich.
What's an oligarchy to do?
Here's what has come out recently (consider this an update):
■ From The Telegraph (my emphasis and paragraphing):
MF Global paid bonuses just hours before bankruptcyFiduciary responsibility? Yes, but only to the well-being of their own good selves. Illegal? Dunno, but it ought to be. Looks like theft to me.
Staff are understood to have received quarterly bonuses last Monday. It is not clear whether the bonuses were also received by staff in the US.
The news is likely to anger those MF Global customers who have still been unable to access money they held with the broker. KPMG, the administrator for MF Global's UK business, has closed less than half of the company's open positions in the past week.
■ And this, via Atrios, from the NY Times Dealbook:
MF Global is said to have used customer cash improperlyAgain, looks like theft to me, pending the outcome of the investigation. Nice pic of Corzine, by the way, looking all managerial and Top 1%-y in that Times article.
MF Global improperly diverted customers’ cash for its own use in the days before its bankruptcy, an act that regulators believe may help explain why $600 million of customer funds remains missing, people briefed on the investigation say.
Investigators have now zeroed in on hundreds of millions of dollars in suspect borrowing at the commodities and derivatives brokerage firm, which at the time of its collapse was run by Jon S. Corzine, the former Democratic governor of New Jersey. At least some of that money was used to cover trading losses at MF Global, regulators suspect, meaning the money may no longer be simply missing. It may be gone.
MF Global, like other brokers, can use customer cash if it puts up sufficient collateral. But the firm did not provide enough backing in late October, essentially taking free loans, said the people briefed on the investigation, who spoke on the condition of anonymity because the inquiry was continuing.
Did you notice the heavy qualification in the headline? Literally correct, but the first sentence was stronger in phrasing and also correct. Why didn't the head reflect the lede? (Answer: some words Top 0.01% some words. Something like that.)
So, my original question — Will Jon Corzine ever be indicted? Note that I'm not saying he should go to jail. I'm saying he should be confronted in court with the evidence that could send him there, and he should have to provide a defense. If this were street crime, he'd be peeing in lockup with a dozen of his new best friends.
But will that that ever happen to this guy? We'll see. This case is a nice, big test of Rule of Law, the Top 1% of the 1%, and the current U.S. Constitution, as presently practiced.
Remember, only Madoff went to jail as a result of the financial scandal — and only because he turned himself in. (Hmm. Not turning yourself in; we could call that the Corzine Defense.)
UPDATE: Someone sent me a customer letter from MF Global dated Oct 1, 2011. First sentence:
As a leading futures and derivatives broker, MF Global maintains vigorous compliance with all industry regulations.If that's not a lie, then theft is legal in this country.
GP
