The latest news on the MF Global bankruptcy and fallout, published in the John Lothian Newsletter the morning of November 4, 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.

Corzine Resigns From MF Global Four Days After Bankruptcy Filing
By Cristina Alesci – Bloomberg
Nov. 4 (Bloomberg) — Jon Corzine resigned as chairman and chief executive officer of MF Global Holdings Ltd., the broker- dealer that filed the eighth-largest bankruptcy in U.S. history this week. Corzine, 64, the former co-CEO of Goldman Sachs Group Inc., quit all of his posts, New York-based MF Global said today in an e-mailed statement. Corzine won’t seek severance pay, the company said.
http://jlne.ws/w4ZOeB

MF Global Masked Debt Risks
Firm Cut Borrowing Before Reports; Corzine Lobbied Against Trading Curbs
BY MICHAEL RAPOPORT – WSJ
For the past two years, MF Global Holdings Ltd. may have disguised its debt levels to investors by temporarily slashing the debt it was carrying before publicly reporting its finances each quarter, according to an analysis by The Wall Street Journal.
http://jlne.ws/sCb14D

MF Global Auditor PwC Subpoenaed for Client Fund Information
By Jesse Hamilton – Bloomberg
Nov. 3 (Bloomberg) — U.S. regulators have subpoenaed MF Global Holdings Ltd.’s auditor, PricewaterhouseCoopers LLP, requesting information on the segregation of assets belonging to clients trading on U.S. commodity exchanges, according to a person briefed on the matter.
http://jlne.ws/trkp3v

KPMG apologises over MF Global disruption
By Jeremy Grant in London – Financial Times
KPMG, the administrator for the UK arm of stricken futures broker MF Global, on Thursday said it was working to transfer positions held by clients of the firm “wherever possible” and apologised for the “inconvenience” caused by the disruption.
http://jlne.ws/vA5VT7

Interactive Brokers’ Peterffy Warns On MF Global Customer Transfers
By Jacob Bunge Of DOW JONES NEWSWIRES
Former customers of MF Global Holdings Ltd. (MFGLQ) and the firms that on Thursday agreed to take on their business face a potentially messy process, according to the chief executive of Interactive Brokers Group (IBKR), which nearly bought the struggling broker-dealer earlier this week.
http://jlne.ws/uvRmWn

ICE Pursues ‘Bulk Transfer’ Of MF Global Customer Accounts
By Jacob Bunge – Dow Jones Newswires
IntercontinentalExchange Inc. (ICE) aims to transfer customer accounts of failed broker-dealer MF Global Holdings Ltd. (MF) to other clearing firms in large chunks, the derivatives market operator told traders Thursday.
http://jlne.ws/s6yy5J

Rivals Move to Sort Out MF Global’s Client Base
By JERRY A. DICOLO, JACOB BUNGE and DAN STRUMPF – Dow Jones
A group of 10 clearing firms began dividing the former clients of MF Global Holding Ltd.’s U.S. brokerage among themselves—one of the first steps by rivals to fill the vacuum left by the huge commodities firm’s collapse.
http://jlne.ws/ukj5hy

Investors Still Without Full Access To MF Global Funds
Dow Jones
NEW YORK (Dow Jones)–Investors with assets tied to MF Global Inc. (MFGLQ) Thursday still did not have full access to their funds — despite a bankruptcy trustee’s order Wednesday releasing some of those assets to new clearing firms.
http://jlne.ws/s5NDMM

CFTC’s Gensler: Regulators Still Trying To Explain MF Globals’ Customer Funds Shortfall
By Jamila Trindle and Andrew Ackerman Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)–Regulators are taking “all appropriate action” to figure out why there’s a shortfall in customer funds at the failed broker-dealer MF Global Holdings Ltd., Commodity Futures Trading Commission Chairman Gary Gensler said Thursday.
http://jlne.ws/vxJq1i

MF Global Has Customer Shortfall of $633 Million, CFTC Says (1)
By Linda Sandler and Tiffany Kary – Bloomberg
Nov. 3 (Bloomberg) — MF Global Inc.’s commodity customer funds have a shortfall of $633 million, or about 11.6 percent, out of a segregated fund requirement of about $5.4 billion, the Commodity Futures Trading Commission said.
http://jlne.ws/t765VN

CFTC’s Gensler Seeking MF Global Fund Recovery, Shortfall Cause
By Gregory Mott – Bloomberg
Nov. 3 (Bloomberg) — The U.S. Commodity Futures Trading Commission, in dealing with MF Global Holdings Inc.’s bankruptcy, will aim “to ensure that customers maximize their recovery of funds and to discover the reason for the shortfall in segregated customer money,” CFTC Chairman Gary Gensler said in remarks prepared for a Senate hearing today.
http://jlne.ws/t1vKEa

Anger Builds Over MF Global Mess – And Spells Trouble
Forbes
It’s been busy in Lincoln, Nebraska, where David Fiala, president of the introducing brokerage firm FuturesOne, has been trying to help clients survive a wild week. Farmers, grain elevators, ethanol plants and feedlot operators trade futures contracts, and that trading dictates how they “operate every day, how they manage risk as a company and for …
http://jlne.ws/szBA7S

Regulators dig in at MF Global in money pursuit
Reuters via Yahoo! News
WASHINGTON (Reuters) – U.S. regulators are launching a broad review into the business practices of failed futures brokerage MF Global Holdings Ltd as their hunt continues for over $600 million in missing customer money.
http://jlne.ws/tZx4b6

Regulator leading MF Global investigation has close ties to Corzine
The Star-Ledger
The former governor turned CEO of the derivatives brokerage that filed for bankruptcy Monday spent 18 years on Wall Street with Gary Gensler, now chairman of the Commodity Futures Trading Commission.
http://jlne.ws/tQWtH0

Chinese May Look at MF Global Metals Business
CNBC
Collapsed futures broker MF Global ‘s metals operations are being dismantled but its traders are likely to be snapped up by new entrants – such as Chinese banks – eager to secure a foothold in London’s metals market, industry sources said.
http://jlne.ws/rpN8KM

Insight: MF board seen beholden to Corzine as risk grew
Reuters via Yahoo! News
(Reuters) – Following MF Global’s sudden meltdown, the company’s board of directors is under harsh scrutiny.
http://jlne.ws/uEOHIS

Corzine retains leading white-collar defense lawyer
Reuters via Yahoo! News
NEW YORK (Reuters) – Jon Corzine, chief executive of collapsed securities firm MF Global Holdings Ltd. hired leading white-collar defense lawyer Andrew Levander to represent him, a legal source briefed on the matter said on Thursday night.
http://jlne.ws/uAEU1k

Regulators Working Round-the-Clock on MF Global: Schapiro
International Business Times
U.S. regulators have worked around-the-clock for the past week as they sort through the collapse of futures brokerage MF Global Holdings Ltd securities regulator Mary Schapiro said on Thursday.
http://jlne.ws/sSMoYq

US Sen Shelby: Hearing On MF Global Would ‘Be In Order’
By Siobhan Hughes Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)–Sen. Richard Shelby (R., Ala.), the top Republican on the Senate Banking Committee, said Thursday that a hearing on the collapse of MF Global Holdings Ltd. (MFGLQ) would “be in order.”
http://jlne.ws/tlabKH

Congressman shuns regulation in reaction to MF
Market Watch
Rep. Michael Grimm (R., N.Y.) cautioned Thursday against expanding financial regulation in reaction to the failure of broker-dealer MF Global Holdings Ltd. “I’d like to caution my Democratic colleagues who may seek to use MF Global as an excuse to expand Dodd-Frank and impose further job-killing restrictions on the financial sector,” Grimm said in a statement.
http://jlne.ws/t4Yz3w

SGX Suspends MF Global Singapore Pte Limited
Press Release
Singapore Exchange Limited (“SGX”) has suspended the membership of MF Global Singapore Pte Limited (“MF Global”) on Singapore Exchange Securities Trading Limited, Singapore Exchange Derivatives Trading Limited and Singapore Exchange Derivatives Clearing Limited with immediate effect.
http://jlne.ws/swj7kU

NYSE CEO: MF Global Shows Need For Systemic Risk Oversight
By Jacob Bunge Of DOW JONES NEWSWIRES
The top executive of NYSE Euronext (NYX) said that the rapid downfall of broker-dealer firm MF Global Holdings Ltd. (MFGLQ) highlights the need for “systemic risk management,” which will be aided by the Big Board parent’s planned merger with Deutsche Boerse AG (DB1.XE, DBOEF).
http://jlne.ws/uouOjR

Jefferies faces possible liquidity crunch
CNN Money
The contagion from the rapid downfall of the once little-known financial firm MF Global continues to spread through Wall Street. The investment bank Jefferies is the latest potential casualty.
http://jlne.ws/tNyT29

MF Global and Jefferies Raise Concern for Oversight
New York Times
MF Global’s failure and the midday plunge in shares of the Jefferies Group have raised concern over the adequacy of regulation of midlevel finanical companies.
http://jlne.ws/sU5GqL

SEC Said to Review Possible Insider Trading in MF Global Bonds
By Joshua Gallu and Shannon D. Harrington – Bloomberg
Nov. 3 (Bloomberg) — The U.S. Securities and Exchange Commission is reviewing trades in MF Global Holdings Ltd. convertible bonds to determine whether some investors sold the debt based on confidential information before the firm’s demise, according to two people with direct knowledge of the matter.
http://jlne.ws/uFo6Zo

NFA: Proposed Guidance for CPOs with Pool Funds Held at MF Global, Inc.
Press ReleasePreview
NFA recognizes the need for our CPO Members to keep their pool participants informed as to what has occurred with MF Global, Inc. (MF Global) and how it may affect future operations. In this regard, NFA, in consultation with the CFTC, is providing guidance on disclosures that CPO Members with pool funds held at MF Global must make to their participants. At a minimum, CPO Members must provide their pool participants with a disclosure statement that includes the disclosures summarized below. Members are also encouraged to provide any additional disclosures that are necessary given their specific business operations.
http://jlne.ws/v9IgUr

CFTC must act on rule opposed by MF Global: Chilton
Reuters via Yahoo! News
WASHINGTON (Reuters) – The U.S. futures regulator was encouraged by bankrupt MF Global to delay work on a rule that would prohibit brokerage firms from borrowing money from their own customers, said a top official who called the company “the new poster child for regulation.”
http://jlne.ws/uROkXQ

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