Conflict-of-Interest/Corruption in Govt Oversight of MF Global

Isn’t this just cozy.

The CEO of MF Global, Jon Corzine, and the head of the federal agency that’s supposed to “regulate” MF Global, Gary Gensler, both had worked for Wall Street titan Goldman Sachs. More than that, Corzine had been the boss of Gensler at Goldman Sachs.

MF Global is the giant financial derivatives broker that went bankrupt a month ago, after making a disastrous $6.3 billion bet on European sovereign bonds with some of its clients’ money.

Obama with Jon Corzine

New York-based MF Global was led by Jon Corzine, a Democrat who was New Jersey governor (2006-2010), U.S. senator from New Jersey (2001-2006), and Chairman and CEO of Wall Street titan Goldman Sachs (1994-1999). Corzine has participated in meetings of the secretive Bilderberg Group, a network of the world’s leaders in the fields of politics, business, and banking, from 1995–1997, 1999, 2003 and 2004.
In 2010, Barack Obama campaigned for Corzine’s reelection to be New Jersey governor. Corzine lost to Republican Chris Christie and so, in March 2010, became the CEO of MF Global instead.
The Commodity Futures Trading Commission (CFTC) and other regulators are investigating whether the firm used money from clients’ accounts for its own purposes as its financial condition worsened. That would violate securities rules. The FBI is also investigating whether MF Global violated any criminal laws.

Gary Gensler

Gary Gensler is the chairman of the CFTC.
After graduating with an MBA from the Wharton School of the University of Pennsylvania, Gensler spent 18 years at Goldman Sachs, making partner when he was 30, becoming head of the company’s fixed income and currency trading operations in Tokyo by the mid-’90s, and eventually the company’s co-head of finance.
In 2008, Gensler first served as a senior adviser to the Hillary Clinton campaign and, after the Democratic Primary, the Obama campaign. Obama rewarded Gensler by nominating him to head the Commodity Futures Trading Commission.
In March 2009, Senator Bernie Sanders (I-VT) tried to block the nomination because Gensler “had worked with Sen. Phil Gramm and Alan Greenspan to exempt credit default swaps from regulation, which led to the collapse of AIG and has resulted in the largest taxpayer bailout in US history.” Sanders also accused Gensler of working to deregulate electronic energy trading, which led to the downfall of Enron, and supporting the Gramm-Leach-Bliley Act, which allowed American banks to become “too big to fail.”
In early November, Gensler stepped aside from the CFTC’s investigation of MF Global  because of his longstanding ties to Corzine.
The Associated Press reports on Nov. 29, 2011, that Rep. Randy Neugebauer (R-Texas), who heads the House Financial Services oversight subcommittee investigating MF Global’s collapse, asked Gensler to provide documents related to the agency’s oversight of the brokerage. Neugebauer also asked Gensler in a letter to explain his personal involvement in supervising MF Global.
Neugebauer noted that Corzine reportedly personally lobbied Gensler and his staff this year in opposition to a possible CFTC rule that would have affected MF Global. Neugebauer asked Gensler why he didn’t remove himself earlier from MF Global matters, so Corzine wouldn’t have been able to lobby him.
In his exclusive-to-subscribers post of Nov. 28, 2011, investigative journalist Wayne Madsen claims that his sources in Chicago say  that the collapse of MF Global is merely the tip of the iceberg in commodities trading fraud, especially in gold, and that a major cover-up of the extent of the fraud by the Obama administration, including by Attorney General Eric Holder, is currently underway.
Madsen also notes the timing of Massachusetts Democrat Rep. Barney Frank’s recent announcement that he is retiring after 16 terms in Congress. Frank, of course, is the former  chairman and a current ranking member of the House Financial Services Committee, the House’s oversight body over Wall Street and Chicago commodities trading.


There is some good news for MF Global’s clients.
James Giddens, the court-appointed trustee overseeing the firm’s liquidation asked that an additional $2.1 billion be released from frozen customer accounts. It would be Giddens’s third transfer of funds to MF Global customers since the brokerage filed for bankruptcy protection on Oct. 31. That would bring the total distributed so far to about $4.1 billion.
With the proposed $2.1 billion distribution, all MF Global commodities customers would have retrieved two-thirds or more of the money they had in their accounts. Giddens has a goal of eventually returning 100% of all funds to customers — if the missing client funds are recovered.

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8 years ago

As one who’s witnessed what really takes place at very high financial levels, let me say that I doubt you have heard or seen the worst of it. Humans can lower themselves to a Satanic depravity in their lust for money and power. They sacrifice reputation, children, family life, whatever it takes to be at the so-called top of the human heap. This is why I get so upset when people disapprovingly say that someone is “an animal”. WRONG!! No animal can behave as despicably as a human who FREELY chooses to do as s/he does.

8 years ago

I think that Gary Gensler is a good guy. He had a change of heart and perspective after his wife passed away. I would like to see him as Secretary of Treasury in Obama’s second term.

8 years ago

These people are purposely manipulating a system with the approval of the crooks in DC. The corruption, coverups, and scams are astounding. They really don’t care about anything but more power and greed.
It’s just too stressful for us “commoners” to imagine what is going to happen to our investments. Spent a half hour on the phone w/dad tonite trying to figure out what to do w/my investments. Just no easy answers 🙁

8 years ago
Reply to  DCG

Dear DCG: Help is on its way, and with profoundly Conservative roots, to boot! Eo asked me to prep a BRIEF article on financial survival: she knows the intimate details of how well I manage on a minimal amount of savings. This will NOT require that you become a hair-shirted monk on a wooden cot, living on two vegetables day, I promise! As it must be brief, I will work w/anyone, if you email me, to construct a plan that works for their situation, because we all have different needs. You will need a lump sum of cash that can… Read more »

8 years ago
Reply to  josephbc69

Thanks J..will send you email this weekend.

Dennis H. Bennett
Dennis H. Bennett
8 years ago

Everyone else but Obama can see he is the “Kiss of Death” AFTER the necrosis sets in.

8 years ago

It’s starting to look like every government agency is totally corrupt…
maybe it is time for a coup d’etat???