The latest news on the MF Global bankruptcy and fallout, published in the John Lothian Newsletter (subscribe here) the morning of December 12, 2011.

In the wake of the MF Global bankruptcy, John Lothian Newsletter has created a special section on JohnLothianNewsletter.com 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.

CME Group’s Duffy reverses course on regulation in wake of MF Global crisis
By: Paul Merrion – Crain’s
Exchanges like those owned by Chicago-based CME act as the industry’s beat cops, with the US Commodity Futures Trading Commission in a spot-checking role. But CME auditors tracking customer accounts on a daily basis were unable to detect or prevent the…
http://jlne.ws/s2nEdh

Trades Are Linked to Missing MF Global Funds
By MICHAEL J. DE LA MERCED – NY Times
The trustee liquidating MF Global’s brokerage unit has spotted suspicious trades in customer accounts that appear connected to a $1.2 billion shortfall, the trustee’s lawyer said Friday.
http://jlne.ws/u0cjrn

MF Global probe reveals oversight blind spots
By Gregory Meyer and Kara Scannell in New York and Hal Weitzman in Chicago – Financial Times
As Jon Corzine apologised to lawmakers over the collapse of MF Global, the chief overseer of the firm’s futures broker sounded a different tone. Terry Duffy, chairman of the CME Group, vigorously defended his industry before the House agriculture committee, saying the fact that “a firm failed to comply with applicable rules” did not mean the system used to protect customer accounts had failed.
http://jlne.ws/w57Vfx

Quick View: MF Global’s unanswered questions
By Jeremy Grant – Financial Times
Friday’s hearing into the collapse of MF Global revealed many things except an answer to the most pressing question of all: where is the $1.2bn in customer funds held by the firm?
http://jlne.ws/vhTqjB

The Denials Begin: Interactive Brokers Is First To Claim It Has Not Engaged In Commingling Rehypothecation
Zero Hedge
Now that the rehypothecation bogeyman has been let loose, and the question of just how many paper (and apparently physical) assets have been double, triple, and n-counted (where n can be a number up to “infinity”) by the infinitely daisy-chained modern global financial system in which one’s liability is someone else’s asset….apparently up to infinity times, the next logical step was for the …
http://jlne.ws/rBlYZY

DealBook: A Romance With Risk That Brought On a Panic
New York Times
Jon Corzine’s $6.3 billion bet on European sovereign debt turned out to be profitable, but the fear it induced brought down MF Global. In the meantime, the search is on for $1 billion in customer money that has gone missing.
http://jlne.ws/txbp5t

Mr. Corzine Goes to Washington, With No Pull: William D. Cohan
BusinessWeek
When it comes to shining a light on the cozy relationships between Wall Street and Washington, and how the rich and powerful get access to things the rest of us don’t, there can never be too many juicy examples.
http://jlne.ws/sDReST

HSBC Sues MF Global Trustee Over $850,000 Worth of Gold
BusinessWeek
An HSBC Holdings Plc unit sued the MF Global Inc. brokerage trustee to establish whether he or another person is the rightful owner of gold bars worth about $850,000 and silver bars underlying contracts between the brokerage and a client.
http://jlne.ws/sTLE7G

MF may happen again
New York Post
Dodd-Frank was enacted to avoid the collapse of firms like MF Global, but according to a Commodities Futures Trading Commission chief, we don’t have the tools to stop it and won’t for some time.The roughly 1,000-page Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010…
http://jlne.ws/tLcBsi

CFTC Backs MF Global Trustee’s Proposed $2.1 Billion Payout Before Hearing
Bloomberg
The Commodity Futures Trading Commission defended a planned $2.1 billion payout to U.S. commodity customers by the trustee liquidating the MF Global Inc. brokerage, saying customer claims take priority over all other claims.
http://jlne.ws/vvFMZI

How To Pay Back MF Global Customers 100%
By Robert A. Green, CPA – Forbes via Yahoo! News
I have a common-sense solution for returning MF Global’s customers 100% of their money quickly, well before forensic accountants find it.
http://jlne.ws/vIzUp0

Corzine’s American dream that turned sour
By Tom Braithwaite in Washington and Shahien Nasiripour and Michael Mackenzie in New York – Financial Times
Jon Corzine’s return to Washington was hardly supposed to be like this. The former New Jersey senator was widely expected to return to political office after a successful stint running MF Global, rather than being grilled about running the company into the ground.
http://jlne.ws/t9RMu8

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