The latest news on the MF Global bankruptcy and fallout, published in the John Lothian Newsletter (subscribe here) the morning of November 23, 2011.

In the wake of the MF Global bankruptcy, John Lothian Newsletter has created a special section on devoted to news, information and commentary. The section features archived news stories featured in the John Lothian Newsletter, analysis and breaking news. Check regularly for updates. See the MF Global news section here.

JP Morgan to buy MF Global stake in LME – sources
Douwe Miedema – Reuters
J.P. Morgan will soon announce it has bought a 4.7 percent stake in the London Metal Exchange (LME) from defunct U.S. brokerage MF Global, two people familiar with the situation said, making it the exchange’s largest shareholder.

MF Global and the Chicago connection
Chicago Tribune editorial
Not long ago, CME Group looked like the answer. The question: How can America head off another financial crisis?
If only swaps and other over-the-counter derivatives had been traded on exchanges such as CME’s, the theory went, the meltdown of 2008 might have been averted. Congress embraced that idea through the Dodd-Frank financial reform, which promoted the transparency and discipline of exchanges and their clearinghouses. The final rules for putting the legislation into practice were still being written at the end of last month when — wham! — MF Global Holdings went bankrupt.

MF Global’s Trustee to Receive $1.3 Billion From Harris Bank
By Tiffany Kary – Bloomberg
Nov. 22 (Bloomberg) — The trustee liquidating broker- dealer MF Global Inc. will get $1.3 billion from Harris Bank in Chicago, the last significant flow of cash into the estate, his spokesman said today after a court hearing.

CME Group Increases MF Global Guarantee Payment to $550 Million
By Matthew Leising – Bloomberg
Nov. 22 (Bloomberg) — CME Group Inc., the world’s largest futures exchange, increased the amount it’s willing to guarantee to the bankruptcy trustee of MF Global Holdings Ltd. to $550 million from $250 million.

CME Group Increases Guarantee to $550M to Accelerate Return of 75 Percent of MF Global Inc. Segregated Funds to All Customers
Press Release
CHICAGO, November 22, 2011 – To accelerate the return of additional securely held funds to MF Global Inc. customers, CME Group today announced it has increased its financial guarantee to the SIPC Trustee from $250 million to $550 million.

Corzine Called to Testify at House Hearing on MF Global Fall
By Zeke Faux and Phil Mattingly – Bloomberg
Jon S. Corzine, the former U.S. senator and New Jersey governor who ran MF Global Holdings Ltd. until the firm filed bankruptcy last month, has been called to testify at a House hearing on the failure next month.

MF Global to get new oversight as Congress probes
Nick Brown, Christopher Doering and Jonathan Stempel | Reuters
(Reuters) – Jon Corzine, who has been publicly silent since resigning as MF Global Holdings Ltd’s chief executive on November 4, was asked to appear before Congress next month to explain how his futures brokerage collapsed into bankruptcy so fast. The request was made as U.S. Bankruptcy Judge Martin Glenn at a hearing in Manhattan approved the appointment of a bankruptcy trustee to oversee what …

MF Global customers get hope; Corzine asked to testify
Reuters via Yahoo! News
(Reuters) – Former customers of MF Global Holdings Ltd got some good news on Tuesday, as the bankruptcy trustee secured more assets and the CME Group Inc expanded a guarantee to speed the return of frozen funds. Meanwhile, Jon Corzine, who has been publicly silent since resigning as MF Global’s chief executive on November 4, was asked to appear before Congress next month to explain how his …

$1.7 Billion Customers’ Money Missing From MF Global
Robert Lenzner – Forbes
The amounts of customer funds missing from MF Global have multiplied from $633 million to $1.2 billion yesterday– and now $1.7 billion today, according to Vincent (Trace) Schmeltz III , the attorney for the 80 member Commodity Customers Coalition. Schmeltz is a member of the Barnes & Thornburg law firm in Chicago

‘Bad Recipe’ for Risk Management
Wall Street traders who make bets with a firm’s own money usually have at least several sets of bosses looking over their shoulder. At MF Global Holdings Ltd., where Jon S. Corzine made $6.3 billion in trades on European sovereign debt that sank the company last month, a different set of rules applied.

Janet Tavakoli: MF Global Revelations Keep Getting Worse
The Huffington Post
When MF Global collapsed on October 21, it was the biggest financial firm to collapse since Lehman in September 2008. Then Chairman and CEO Jon Corzine is connected to the head of one of his key regulators, the Commodity Futures Trading Commission (CFTC), through his former protégé at Goldman Sachs, Gary Gensler. He also knows the Fed’s William Dudley, a key member of the Fed’s Open Market Committee, from their days at Goldman Sachs. The Fed approved MF Global’s status as a primary dealer, a participant in the Fed’s Open Market Operations, just before Jon Corzine took its helm and beached it on a reef called leveraged credit risk.

MF Global: Fraud, Incompetence, or a Bit of Both?
By Matt Koppenheffer | Motley Fool
In the wake of its futures-market-rattling bankruptcy, there is a huge shortage of client funds at MF Global (OTC: MFGLQ). But when we look back at what led to the broker’s collapse, one thing is clear: There’s no shortage of incompetence.

Insight: Farm belt rage over MF Global could chill markets
By Bob Burgdorfer and Philip Shishkin – Reuters
(Reuters) – When the CME Group pledged $300 million of its own money to help former MF Global customers get their cash back faster, the exchange was likely thinking of customers like Kansas cattle rancher Tim Rietzke.

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