Doomstead Diner Menu => Economics => Market Flambe => Topic started by: JoeP on July 09, 2012, 02:17:34 PM

Title: Another MFing Global Cockroach
Post by: JoeP on July 09, 2012, 02:17:34 PM
I suppose there will be many more roaches to come...

NFA shuts PFG down, puts it in liquidation only status, founder attempted a suicide
Jul 9 2012
Posted by Michael Greenberg in Brokers

Another MF Global incident may be looming in the horizon. PFG Best just released this dramatic statement to its clients:

“Due to a recent emergency involving Russell R. Wasendorf, Sr., a suicide attempt, some accounting irregularities are being investigated regarding company accounts. PFGBEST is wholly owned by Mr. Wasendorf. Therefore, the NFA and other officials have put all funds on hold, and PFGBEST is in liquidation-only status with our clearing FCM. What this means is no customers are able to trade except to liquidate positions. Until further notice, PFGBEST is not authorized to release any funds. We will update you as any new procedures are stipulated and with any further information as it becomes available.”

Apparently NFA and CFTC just walked into PFG’s offices and shut the broker down. According to our sources its Founder Russell Wasendorf attempted a suicide last night and some money may be missing from PFG’s accounts.

We’ll continue updating once new information flows in.

http://forexmagnates.com/nfa-shuts-pfg-down-puts-it-in-liquidation-only-status-founder-attempted-a-suicide/ (http://forexmagnates.com/nfa-shuts-pfg-down-puts-it-in-liquidation-only-status-founder-attempted-a-suicide/)

Title: Re: Another MFing Global Cockroach
Post by: RE on July 10, 2012, 02:37:57 AM
Latest on the PFG Heist from TD on ZH, apparently at the moment chump change compared to MFG. But then there are those Counterparties of course....

RE

PFG Is Now MFG(lobal) Part 2 As $220 Million In Segregated Client Money Has Just Vaporized (http://www.zerohedge.com/news/pfgbest-now-mf-global-part-2-220-million-segregated-client-money-has-just-vaporized)
Submitted by Tyler Durden on 07/09/2012 19:17 -0400

Commodity Futures Trading CommissionfixedMF GlobalNone

UPDATE 2: Have no fear though since as recently as January 2012, the CFTC did not find any "material breaches of customer funds protection requirements" at FCMs (firms like PFGBest)

UPDATE 1: Account-holders may not be so surprised to find who is the custodian for the PFGBest FX accounts: none other than huge MFGlobal fans, JPMorgan!

Remember when the entire segregated account fiasco was supposedly fixed in the aftermath of the November 2011 MF Global bankruptcy, and where regulators: the CFTC, the SEC, the CME, and anyone you asked, swore up and down this would never happen again? Turns out that 7 months later, the spirit of MFG has struck again, only this time with one letter switched: it is now known as PFG, as we suggested first 3 hours ago when we broke the story. From the just filed affidavit by Lauren Brinati who is working with the National Futures Association, which in turn has just filed notice prohibiting PFGBest from operating further, and freezing all of its accounts:

•On or about June 29, 2012 PFG reported to NFA that it had approximately $400 million in segregated funds, of which more than $225 million were purportedly on deposit at U.S. Bank
•On or about July 9, 2012, NFA received information indicating that PFG's Chairman may have falsified bank records
•On July 9, 2012, NFA made inquiry with US Bank and learned that rather than the $225 million that PFG had reported as being on deposit at US Bank just days earlier, PFG had only approximately $5 million on deposit at U.S. Bank.
Translation: another $220 million segregated account pillage has just taken place, in the vein of none other than Jon Corzine and MF Global.

The money has now officially vaporized.

It is truly wonderful of the NFA to finally get involved, after PFG's clients have lost about 98% of their cash held with the firm.

In other potential news, a rather prominent New York bank, recently closely associated with marine wildlife, may have just cut its Q2 losses by up to $220 million.

And now for a moment of sarcasm, courtesy of Jack Pearson.

 PFGBEST @PFGBEST PFGBEST’s goal during MF Global’s demise was to get MF Global customers their money back. fb.me/1tPLObJyL
6 Feb 12 ReplyRetweetFavorite

Title: Re: Another MFing Global Cockroach
Post by: Surly1 on July 10, 2012, 03:23:10 AM
Just amazing. Now the 1% commence their circular firing squad?

Kunstler seems on point this week:

The Drowning Pool


By James Howard Kunstler
on July 9, 2012 8:56 AM

     News that that a swarm of termites deep inside the British banking system have been fiddling the interbank interest rates (LIBOR) for years in order to systematically vacuum a few billion pence off the exchange floors for themselves is the latest blow to the credibility of the global money system - and probably a fine overture to a looming climactic implosion of the gigantic, creaking, smoldering, reeking, duck-taped edifice of broken promises, booby-trapped hedge obligations, counterparty follies, central bank euchres, sovereign flim-flams, and countless chicanes too various, dark, and deep to smoke out. Next, we'll probably hear that Lloyd Blankfein over at Goldman Sachs has been tinkering with the rotation of the earth in order to gain a few micro-milliseconds of advantage in his firm's high frequency trading rackets. After all, back in 2008 Lloyd himself claimed to be "doing God's work."
     In short, world banking is now hopelessly pranged, and I am not at all sure the project of civilization (modern edition) can continue by other means. The impairments of capital formation are now so profound that no one and nothing can be trusted. Not only are all bets off, but nobody will want to make any new bets - and by that I mean venture to invest accumulated wealth (capital) in some useful project designed to sustain human well-being. What remains is just the desperate hoarding of whatever remains in assets uncontaminated by the pledges of others to pony up.
     All this points to a dangerous new period of political history, a deadly Hobbesian scramble to evade the falling timber in a burning house as the rudiments of a worldwide social contract go up in flames. Such is the importance of legitimacy: the basic condition for governance, especially among supposedly free people. You can meddle in a lot of distributory issues - who gets what - but when you mess with the most basic operations of money to the extent that no one is sure what it's really worth, or what it represents, then you are deeply undermining society. This is now the condition that is set to blow up republics.
     Reality dislikes fraud and accounting tricks. Reality is serious about settling scores. Reality eventually intervenes and puts an end to monkey business. What will it be this time?
     Europe and America have been buying a month here, a month there (of a fragile, continuing status quo) on the installment plan. That's what QE, TARPs, LTRO, EFSF, Operation Twist, et cetera, are all about. Think of them as multi-billion dollar (euro) fire extinguishers bought on credit cards. Europe is now completely out of credit to buy more fire fighting equipment. For months now it has been down to whether Germany intends to keep supporting Spain, Italy, Greece, Portugal, Ireland, the French banks (and a few stray forgotten places between the backwaters of the Danube and the Gulf of Finland) without any say in how they manage their allowance. Much as Germany enjoyed the Ponzi heyday of the Euro zone, a big "tilt" sign now flashes ominously over the continent, signaling game over. All fall down. Everybody gets real poor real fast. M. Hollandaise over in Paris has already sealed his fate with his stupid plan to return to "go" on the Ponzi game-board. Merkel's tattered scarecrow of a coalition will blow away in the next national election. The Club Med countries will soon boil up in street-fighting, Holland and Finland will drink themselves to death, and across the channel outsider Britain will fizzle away to a burnt bowl of mulligatawny. That's what the end of the summer looks like to me.
      Over here, in this sorry-ass edition of America, the election will look more and more like a World Wrestling Federation staged dumb-show between two catamite hostages of a foul corporate oligarchy. Imagine that horse's ass Mitt Romney spending the next four months denouncing Obama-care, modeled on his own health care reform in Massachusetts, while Obama pretends he has a grip on an economy where the rule of law is absent due to Obama's own omissions and negligence.
     And if you can't stand that spectacle, just look around at America itself: a wasteland of futile motoring and discount shopping populated by depressed, overfed clowns bedizened with sinister tattoos, pretending to be Star Warriors. No nation ever seen in human history ever laid such a disappointing egg. Only to have it fry on the sidewalk.
Title: Re: Another MFing Global Cockroach
Post by: JoeP on July 10, 2012, 05:43:03 AM
RE,

Yes – vaporization of $220 million of clients’ money is chump change.

I think this part from the update you posted is kinda interesting:

Quote
It is truly wonderful of the NFA to finally get involved, after PFG's clients have lost about 98% of their cash held with the firm.

If this is what futures/forex/alternative brokerage clients can expect going forward, then they must be “feeling lucky” to keep their money in these fine institutions.  I mean really really lucky…super duper lucky.
Title: Re: Another MFing Global Cockroach
Post by: JoeP on July 10, 2012, 10:28:41 AM
Surly,

I like the “circular firing squad” idea for the elites.  I’ve always thought Kunstler has a cool writing style and does appear to be on point this week.
 
Title: Re: Another MFing Global Cockroach
Post by: Surly1 on July 10, 2012, 10:34:23 AM
I like the “circular firing squad” idea for the elites.  I’ve always thought Kunstler has a cool writing style and does appear to be on point this week.

I REALLY like JHK, although I don't always agree with him. He is a trenchant observer, with a keep wit and a nose for the jugular-- which I admire.
Title: Re: Another MFing Global Cockroach
Post by: Surly1 on July 10, 2012, 10:59:59 AM
Nothing to see here, citizens, move along...

(https://sphotos.xx.fbcdn.net/hphotos-ash3/s720x720/529316_10151965651785942_1371420404_n.jpg)
Title: Re: Another MFing Global Cockroach
Post by: WHD on July 10, 2012, 11:26:49 AM
Turns out, Timmy "Lightning Boy" Geithner knew about the Libor in 2007-2008 when he was the the New York Fed. The headline on the Huffpost now THE ROT SPREADS

http://www.huffingtonpost.com/2012/07/10/federal-reserve-of-new-york-libor-scandal_n_1661268.html (http://www.huffingtonpost.com/2012/07/10/federal-reserve-of-new-york-libor-scandal_n_1661268.html)
Title: Re: Another MFing Global Cockroach
Post by: Jaded Prole on July 11, 2012, 06:56:50 AM
This has got to be one of the best threads here. Took me a while to dig it back up.   :emthup: :emthup: :emthup:
Title: Re: Another MFing Global Cockroach
Post by: Surly1 on July 11, 2012, 09:03:47 AM
Hey JP,
that's what you get for not making DD part of your Gooooooooooooooooood breakfast!

Glad you caught up. Time to stick your foot up someone's ass. If you can take time off from re-educating the mouth-breathers in the local paper!

WHD-- it will be interesting to see if any of this catches the attention of anyone remotely connected with law enforcement. Not holding my breath.



Title: Re: Another MFing Global Cockroach
Post by: WHD on July 11, 2012, 11:19:02 AM
Surly,

What law? I feel like going and smoking a fat joint in front of the Minneapolis Fed.
Title: Re: Another MFing Global Cockroach
Post by: Surly1 on July 11, 2012, 11:36:29 AM
That is indeed the question. I remain convinced that none of this would be occurring if Eric Holder were still alive.

Or if the guy who hired him weren't so entrenched in bankster money, although most of it seems to be going to Willard these days.

Firing up a fattie in front of the Fed will only get you hassled or arrested, but it remains an excellent idea.
Title: Re: Another MFing Global Cockroach
Post by: Surly1 on July 11, 2012, 11:54:18 AM
From Washington's Blog via ZH:

U.S. Gave Tens of Billions to Libor-Manipulating Banks ... Even AFTER Learning about the Manipulation
George Washington's picture

Submitted by George Washington on 07/11/2012 12:51 -0400
http://www.zerohedge.com/contributed/2012-07-11/us-gave-tens-billions-libor-manipulating-banks-even-after-knowing-about-manip (http://www.zerohedge.com/contributed/2012-07-11/us-gave-tens-billions-libor-manipulating-banks-even-after-knowing-about-manip)

You know that Libor is the largest economic scam in world history and the largest insider trading scandal ever.

You know that the Federal Reserve knew about the manipulation by August 2007. And see this.

But did you realize that the Fed and Treasury threw billions of dollars of taxpayer money at Barclays and the other Libor-manipulating banks after they knew about the manipulation … and did nothing to stop it?

As Richard Eskow notes:

    Thanks to the GAO audit of the Fed — an audit which it vigorously resisted — we know that Barclays was the fifth largest recipient of emergency loans. Bailout loans for Barclays came to $868 billion. That means that Barclays probably made billions off the reduced interest rate alone, courtesy of the American people.

    Those loans were granted between December 2007 and July 2010. That means the Fed was doling out billions to Barclays after it learned that the bank was lying about its LIBOR rates.

Indeed, all of the probable Libor manipulators – including Citi, JP Morgan Chase, Bank of America, UBS, RBS and Deutsche – were huge recipients of bailout money courtesy of the American taxpayer:


Table 8: Institutions with Largest Total Transaction Amounts (Not Term-Adjusted) across Broad-Based Emergency Programs (Borrowing Aggregated by Parent Company and Includes Sponsored ABCP Conduits), December 1, 2007 through July 21, 2010
Bailout U.S. Gave Tens of Billions to Libor Manipulating Banks ... Even AFTER Learining about the Manipulation

(http://2.bp.blogspot.com/-fsc16YCn8ck/T_27UYHZTHI/AAAAAAAABJs/W7KmHung8MQ/s1600/Bailout.jpg)
Source: GAO analysis of Federal Reserve System data.


No, the criminals haven’t paid back the bailout money, American taxpayers are still bailing them out and helping them grow bigger, and the banks are committing more fraud every day.

The government isn’t doing anything to rein in the big banks … no wonder people are starting to call for bankers’ heads.

Title: Re: Another MFing Global Cockroach
Post by: JoeP on July 11, 2012, 02:37:34 PM
Quote from: WHD
I feel like going and smoking a fat joint in front of the Minneapolis Fed.
(http://www.mybroadband.co.za/photos/data/500/big-joint.jpg)

Count me in!
 
Title: Re: Another MFing Global Cockroach / Libor explained
Post by: Surly1 on July 12, 2012, 08:41:03 AM
In a picture.
Source:http://www.accountingdegree.net/numbers/libor.php (http://www.accountingdegree.net/numbers/libor.php)

(http://www.accountingdegree.net/images/libor.jpg)
Title: Re: Another MFing Global Cockroach
Post by: WHD on July 12, 2012, 09:57:12 AM
Quote
Surly -- it will be interesting to see if any of this catches the attention of anyone remotely connected with law enforcement. Not holding my breath.

WHD - What law?

Surly - That is indeed the question. I remain convinced that none of this would be occurring if Eric Holder were still alive.

Still alive? Did he snub one of his Mexican drug cartel connections? Or did Wells Fargo and the Corrections Corporation of America kill him, for not contributing to 12% prison growth? (Wouldn't that be supper cool to be a big bank and be able to harbor billions of Drug cartel money and invest in prisons and government law makers?!) 
Title: Re: Another MFing Global Cockroach
Post by: Surly1 on July 12, 2012, 10:05:09 AM
Still alive? Did he snub one of his Mexican drug cartel connections? Or did Wells Fargo and the Corrections Corporation of America kill him, for not contributing to 12% prison growth? (Wouldn't that be supper cool to be a big bank and be able to harbor billions of Drug cartel money and invest in prisons and government law makers?!)

I assume he has been in a catatonic state since 2008, given the number of prosecutions for Wall Street types.
Title: Re: Another MFing Global Cockroach
Post by: WHD on July 12, 2012, 11:48:11 AM

Quote
I assume he has been in a catatonic state since 2008, given the number of prosecutions for Wall Street types.

Tell that to all those people in need of a comparatively inexpensive and infinitely more safe non-pharmaceutical remedy to illness. (You would appreciate NPR's take on the guy, from about a month ago. An epic lionization, if I have ever heard one. I would post it, but it would probably make you puke.  Orlov said NPR stands for "Not Particularly Relevant.)   
Title: Re: Another MFing Global Cockroach
Post by: Surly1 on July 12, 2012, 12:17:09 PM

Quote
I assume he has been in a catatonic state since 2008, given the number of prosecutions for Wall Street types.

Tell that to all those people in need of a comparatively inexpensive and infinitely more safe non-pharmaceutical remedy to illness. (You would appreciate NPR's take on the guy, from about a month ago. An epic lionization, if I have ever heard one. I would post it, but it would probably make you puke.  Orlov said NPR stands for "Not Particularly Relevant.)

I used to manage a local public tv and radio operation in another life (for a brief period) after a long career in public broadcasting. I am in a particularly good place to evaluate the transition from what public broadcasting was to what it has become today, a halfway house for low talent hacks and, in NPR news programming, a haven for lickspittle catamites in thrall to the one per cent. Stenographers to power all. As far as I am concerned, NPR stands for, variously, "National Pentagon radio" or "National Petroleum Radio."

But Orlov's formulation works for me as well.
Title: Re: Another MFing Global Cockroach: Surprise, A Bank Wins Customers Lose
Post by: g on September 04, 2012, 05:05:49 PM
No more laws or legal system.  We are truly screwed.     :icon_study:
Sentinel ruling may hurt MF Global clients

(Reuters) - A ruling in the case of failed futures brokerage Sentinel Management Group could make it more difficult for customers to recoup money lost in the much larger collapse of MF Global, according to Sentinel's bankruptcy trustee.

A federal appeals court on Thursday upheld a ruling that puts Bank of New York Mellon ahead of former customers of Sentinel in the line of those seeking the return of money lost in the 2007 failure of the suburban Chicago-based futures broker.

The appeals court affirmed an earlier district court ruling that the bank had a "secured position" on a $312 million loan it gave to Sentinel, which turned out to have been secured by customer money.

Futures brokers are required to keep customers' funds in dedicated accounts to protect them from being used for anything other than client business.

However, Thursday's ruling suggests that brokerages can use customer funds to pay off other creditors, Sentinel trustee Fred Grede told Reuters.

"I don't think that's what the Commodity Futures Trading Commission had in mind" with its requirement that brokers keep customer money separate from their own, he said.

www.reuters.com/article/2012/08/10/us-sentinel-appeals-decision-idUSBRE87900T20120810 (http://www.reuters.com/article/2012/08/10/us-sentinel-appeals-decision-idUSBRE87900T20120810)
Title: Re: Another MFing Global Cockroach: Corzine Knew About Misuse of Funds
Post by: g on September 13, 2012, 06:19:09 AM
In the days following MF Global’s stunning implosion last year, a senior executive at the firm made a startling concession to investigators looking into both the company’s demise and the loss of more than $1 billion in customer money, according to people with direct knowledge of the matter.

MF Global’s chief financial officer for North America, Christine Serwinski, told investigators that her boss, MF Global’s chief executive, Jon Corzine, was well aware of the use and possible misuse of the customer funds during the firm’s final days, and as a result, Corzine may end up in “jail,” these people add.

http://www.foxbusiness.com/industries/2012/09/11/exclusive-mf-global-cfo-said-corzine-knew-about-misuse-funds/ (http://www.foxbusiness.com/industries/2012/09/11/exclusive-mf-global-cfo-said-corzine-knew-about-misuse-funds/)
Title: Roach-dale: Another Cockroach Bites the Dust
Post by: RE on December 04, 2012, 11:22:06 PM
(http://dunningkruger.com/wp-content/uploads/2009/02/jump.jpg)
Another Piglet got hung out to dry here, David Miller taking the Fall for his Masters.  I weep for him.  :icon_mrgreen:


Wait till this really gets rolling.  We'll be Raining Stockbrokers.  Still got a while to wait for the Backstabbing to chain up the line to the Big Boys though.


RE

(http://i.crackedcdn.com/phpimages/article/1/2/3/21123.jpg?v=1)

Rochdale "Rogue Apple Trader" Arrested (http://www.zerohedge.com/news/2012-12-04/rochdale-rogue-apple-trader-arrested)

Submitted by Tyler Durden on 12/04/2012 16:53 -0500

And so yet another saga of a trader who bet on AAPL rising, just before it tumbled, ends in tears, this time with what appears to be near certain incarceration of another small, 2-bit trader.

As we previously reported, back in November, as AAPL stock was in freefall, none other than the firm of everyone's favorite financial permabull, Rochdale, ended up being a proud if involuntary holder of nearly $1 billion in AAPL stock. The scapegoat for AAPL's price drop: one ex-trader David Miller. What Miller is accused of, is buying 1.6 million shares of AAPL on the day of the company's last earnings announcement in hopes, of course, the stock would surge. It didn't. Furthermore, Miller was in reality executing a trade for a client who had only wanted to buy 1,625 shares, but Miller was confident enough the stock would go up, he bet the firm's money to buy the difference. Sadly, neither the AAPL earnings announcement, nor its stock price, did quite as planned. End result: $5 million loss, Miller terminated and now arrested and charged, and Rochdale left scrambling for a bailout.

That's not all: as Dealbook reports, "Separately, Mr. Miller was talking to yet another brokerage firm, leading it to sell short or bet against Apple shares. This was done, according to the complaint, to hedge against his other position. Fortunately this brokerage house was able to trade out of the position at a profit. Mr. Miller, according to the complaint, had been planning this trade for some time and in the weeks leading up to Apple’s earnings he had made false representations to the brokerage firm that shorted the stock in order to help facilitate the trade." Miller then piled insult upon injury by lying, claiming he made a mistake in the order.

Of course, the reason why we italicized the word 'scapegoat' above is that had Miller's coin-toss proven accurate, and if AAPL had not posted its 3rd consecutive earnings miss in a row, and the stock had soared, he, his clients, and his firm would have all made lots money, Miller would now be expecting a fat 7 figure bonus, and Rochdale would not be in dire need of a rescuer (who refuses to come).

Alas, it, and everyone's favorite permabullish financial seer of seers, and the man who said to buy Lehman days ahead of its bankruptcy, is now left hanging, although as the NY Post reports, Rochdale rivals are "courting star analyst" Bove:

Bove is being courted by a bevy of rival firms with Rochdale teetering on the edge after it was rocked by $1 billion worth of unauthorized Apple trades.

The small brokerage, run by CEO Dan Crowley, blames a rogue trader, identified as David Miller, for making the massive bet without approval. The Federal Bureau of Investigation, along with regulators including the Financial Industry Regulatory Authority, are probing the matter.

Bove has pledged to stay at the firm while Crowley looks for a white knight willing to pony up $5 million or more to allow the Stamford, Conn., firm to continue operating as a broker-dealer.

If Rochdale, however, cannot find a cash infusion in the next few weeks, Bove will jump ship to another Wall Street firm, according to several sources close to him.

It is unclear just who this competing firm that will retain Bove's service is: the Home Shopping Network comes to mind.

Finally, one wonders just how close Messrs Miller and Bove were. According to Miller's FINRA dossier, his professional career is a mirror image of that of Dick himself. Was Miller merely expressing the bullish views of Mr Bove, whose permabullishness is usually amusingly contagious to those who know little or less about the true functioning of the financial world.
Title: Re: Another MFing Global Cockroach
Post by: g on December 04, 2012, 11:38:12 PM
Quote
It is unclear just who this competing firm that will retain Bove's service is: the Home Shopping Network comes to mind.

That is the firm for him. One of MSM's greatest, always wrong, cocky as all hell, selling costume jewelry would be most appropriate.
Title: Re: Another MFing Global Cockroach: JP Morgan Hid Trades and Deceived
Post by: g on March 16, 2013, 04:32:31 AM
JPMorgan Chase, the nation’s biggest bank, ignored internal controls and manipulated documents as it racked up trading losses last year, while its influential chief executive, Jamie Dimon, briefly withheld some information from regulators, a new Senate report says.

The findings by the Congressional investigators shed new light on the multibillion-dollar trading blunder, which has claimed the jobs of several top executives and prompted an inquiry by the Federal Bureau of Investigation. The 300-page report, released a day before a Senate subcommittee plans to question bank executives and regulators at a hearing, will escalate the debate over how to police complex risk-taking on Wall Street. It may also foreshadow a criminal case against employees at the heart

  Mr. Dimon, whose reputation as an astute manager of risk has been undercut by the trading losses, comes under the harshest criticism yet from the Senate investigators. The chief executive signed off on changes to an internal alarm system that underestimated losses, seemingly contradicting his earlier statements to lawmakers, according to the report.

He is also accused of withholding from regulators details about the investment bank’s daily losses — and then raising “his voice in anger” at a deputy who later turned over the information.
If I ever saw a maggot deserving of justice from the Orkin Man it is this grinning pretty boy maggot with his Dennis the Menace grin.


http://dealbook.nytimes.com/2013/03/14/jpmorgan-faulted-on-controls-and-disclosure-in-trading-loss/?ref=business (http://dealbook.nytimes.com/2013/03/14/jpmorgan-faulted-on-controls-and-disclosure-in-trading-loss/?ref=business)  :icon_study: