Spook Story on Halloween Market takes a Header:
Interrupt my normally scheduled program for Halloween this just in MF Global files for BK. Trading on the floor for MF Global traders is stopped and traders are not allowed to return after the news. But Langone says this what happens when you make bad decisions should not hurt the markets.
Ah we will be watching as this unfolds. Hope your fund manager did not have you vested in any MF Global Bonds.
Rick Santelli has the details. Watch this he is Pissed! how this went down on the floor!
Kenneth Langone, (born September 16, 1935) is a venture capitalist, investment banker and financial backer of The Home Depot, and a former director of the New York Stock Exchange. He was elected as director of Yum! Brands effective October 7, 1997, and is a member of the Audit Committee.
Langone is also a trustee of New York University. On July 8, 2010, Geeknet announced that Kenneth Langone was elected Chairman of its Board of Directors and is now serving as CEO. Langone has an estimated worth of $1.3 billion.
Trick or Treat? Well that did not take long!
MF Global is the 7th largest BK in US History that is not small friends at all!
FBI To Probe MF Global’s
Use Of Client Money
by THE ASSOCIATED PRESS
WASHINGTON (AP) — MF Global, the securities firm led by former New Jersey governor Jon Corzine, admitted using clients’ money as its financial troubles mounted, a U.S. official says. The FBI is expected to investigate whether the firm’s actions violated criminal laws, according to two people familiar with the situation.
An MF Global executive told regulators early Monday that the company had diverted client money, according to an official familiar with a separate probe by regulators. It isn’t clear where the money ended up or what it might have been used for, the official said.
All three people spoke on condition of anonymity because they weren’t authorized to discuss the matter publicly.
This is the latest public embarrassment for Corzine.
He was ousted as chairman of Goldman Sachs Group Inc. in 1999 by executives including Henry Paulson, who later became U.S. Treasury secretary. Later, he lost his bid for a second term as New Jersey governor after sinking millions of his own money into the campaign. Frustrated voters had hoped his banking experience would help him clean up the state’s finances.
After taking over MF Global last year, Corzine led MF Global to make more trades for the company’s own profits, a practice known as proprietary trading. Proprietary trading helped turn Goldman into a trading powerhouse in recent years.
Under Corzine’s leadership, MF Global bet $6.3 billion on debt issued by Italy, Spain and other European nations with troubled economies. Those bonds have lost value in recent weeks as fears have intensified that some European countries might default.
MF Global reported its biggest ever quarterly loss last week, mainly because of losses on proprietary trading. Credit rating agencies downgraded the company’s bonds to junk status. And business partners demanded that it put up more cash to guarantee its trades. The result was a cash crunch that forced MF Global into bankruptcy court.
Earlier Tuesday, the head of the Chicago Mercantile Exchange said that MF Global had violated rules requiring it to keep clients’ money in separate accounts.
Securities firms are required to keep clients’ money and company money in separate accounts. That makes it easier to repay clients if a broker fails.
Derivatives are investments whose value is based on the value of some underlying asset. MF Global was one of the biggest players in the derivatives market.
The Securities and Exchange Commission and the CFTC have said they and other regulators were monitoring MF Global’s situation for days “in anticipation of a transaction that would include the transfer of customer accounts to another firm.”
The regulators said MF Global had reported “possible deficiencies” in client accounts, but they did not reveal that the company had diverted client money.
The proposed sale through after regulators and the potential buyer, Interactive Brokers, couldn’t make the numbers add up. The discrepancies led to MF Global’s admission at 2 a.m. Monday, the official said.
Trading of MF Global shares was permanently suspended on the New York Stock Exchange Tuesday afternoon.
Hays reported from New York. Associated Press writer Larry Neumeister and AP Business Writer Pallavi Gogoi in New York contributed to this report.