The latest news on the MF Global bankruptcy and fallout, published in the John Lothian Newsletter the morning of November 7, 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.

MF Global’s Missing Client Funds Said to Be Located at JPMorgan
By Cristina Alesci and Matthew Leising
Nov. 4 (Bloomberg) — Customer funds missing from bankrupt brokerage MF Global Inc. have been located in a custodial account at JPMorgan Chase & Co., according to two people with knowledge of the matter.
http://jlne.ws/t7ARp6

**** This turned out not to be the case as it was first reported.

Questions from CFTC Delayed JPMorgan Statement on MF Global Account
FOX Business
Exclusive: JPMorgan was forced to delay the release of a statement concerning an MF Global account thought to be containing missing customer money amid questions from the lead regulator investigating the matter, FOX Business has learned.
http://jlne.ws/rTTcAa

Top U.S. regulator withdraws from oversight of MF Global
Washington Post
A top federal regulator and veteran of Goldman Sachs has decided to stay out of the government’s handling of MF Global , the brokerage firm that landed in bankruptcy days ago under the leadership of another Goldman alum , former New Jersey governor Jon S. Corzine (D) . Gary Gensler , chairman of the Commodity Futures Trading Commission, had played a key role in the decision to put MF Global …
http://jlne.ws/sJ9teJ

MF Global’s Repo Transactions Drew Regulator Attention in March
By Jesse Hamilton and Michael J. Moore
Nov. 4 (Bloomberg) — U.S. regulators questioned MF Global Inc.’s use of so-called repo-to-maturity transactions as early as March, concerns that eventually led them to demand the brokerage come up with more capital.
http://jlne.ws/seUOXQ

Angry MF Global Customers Get Organized
Forbes
David Rosen, a 32-year-old energy broker who works on the floor of the New York Mercantile Exchange, owns some of the $600 million in customer funds still missing from bankrupt commodities firm MF Global. Rosen had more than $100,000 in an account, which he considered even safer than a bank account. Despite being out the …
http://jlne.ws/vly8dV

MF Global Holdings Said to Be Subject of FBI Investigation (1)
By Patricia Hurtado, Tiffany Kary and Linda Sandler – Bloomberg
Nov. 5 (Bloomberg) — MF Global Holdings Ltd., which filed for bankruptcy protection almost a week ago, is the subject of a formal FBI investigation opened late this week, a person familiar with the matter said.
http://jlne.ws/vXIrYc

CFTC, Liquidator Delve Into MF
By JAMILA TRINDLE, JERRY A. DICOLO and JACOB BUNGE
Commodity Futures Trading Commission Chairman Gary Gensler said regulators are taking “all appropriate action” to get to the bottom of a $633 million shortfall in customer money at failed securities firm MF Global Holdings Ltd.
http://jlne.ws/usb0tC

MF Global Evidence of Misguided Regulation
FOX Business
One of the great ironies of Jon Corzine’s disastrous, hugely leveraged bet on European debt, is that when he was a senator and a governor, he was lecturing financial firms about the evils of exactly the same kind of leveraged bets.
http://jlne.ws/soKW5K

Broke broker
Economist
THE euro-zone crisis had already brought Dexia, a Franco-Belgian lender, low. This week it claimed its first American scalp. On October 31st, in the biggest collapse of a financial firm since that of Lehman Brothers in 2008, MF Global went bankrupt. Courts in more than half a dozen jurisdictions will be pressed to sort out billions of dollars in claims. Investigators are reportedly searching for hundreds of millions of dollars in missing client funds.
http://jlne.ws/u0UpOl

MF Global Customers Lament Safeguards as Regulators Work to Unfreeze Money
By Matthew Leising – Bloomberg
Nov. 5 (Bloomberg) — Customers of MF Global Holdings Inc. whose money is still trapped at the futures broker almost a week after filing for bankruptcy protection say the safeguards meant to protect them failed as exchanges and regulators work to move client positions.
http://jlne.ws/thFfe1

Ryan commodities broker stops the buck in MF Global mess
The Gazette
Commodities broker Ken Ries says it’s disgusting that nobody’s stepping in to guarantee the losses of his clients in bankrupt commodities clearing firm MF Global, so he’s going out on a limb.
http://jlne.ws/tTEryJ

Did Someone At FINRA Do Corzine A Favor And Waive His Registration Requirements?
Forbes Finance News (ext) Dropbox via Yahoo! Finance
Did FINRA waive its registration requirements for Jon Corzine? If so — who’s responsible and why were two waivers granted?
http://jlne.ws/sew3f1

Ex-Customers of MF Global Asked to Post More Collateral
By MICHAEL J. DE LA MERCED – NY Times
For MF Global customers, this past weekend provided both some good news and bad news. The good: most of their accounts were transferred to new homes. The bad: these clients will have to post additional money to maintain their trading positions, according to notices sent out over the weekend.
http://jlne.ws/v2f1ab

CME Temporarily Reduces Margin to Ease MF Global Account Shift
By Matthew Leising – Bloomberg
Nov. 5 (Bloomberg) — CME Group Inc. is reducing the initial margin required to back futures trades to ease the bulk transfer of accounts held by MF Global Holdings Inc. customers.
http://jlne.ws/uyMl3L

U.S. Clearing Houses Announce MF Global Bulk Transferee Confirmation Service
Press Release
As part of the bulk transfer process for MF Global customer accounts and collateral held at U.S. derivatives clearinghouses, CME Clearing, ICE Clear US, The Clearing Corporation, KCBOT Clearing Corp., MGEX, NYSE Liffe US and The Options Clearing Corporation have coordinated to provide clients with further information on the status of their account transfers.
http://jlne.ws/rU9HXG

CME Transfers Some MF Global Customer Business To Other Firms
By Jacob Bunge Of DOW JONES NEWSWIRES
About 5,300 of MF Global Holdings Ltd. (MFGLQ) customer accounts and more than $410 million in trading collateral were transferred to other trade-clearing firms Thursday, according to exchange operator CME Group Inc. (CME).
http://jlne.ws/vuNTHd

Clearing Advisory: CME Group Continues Transfer of MF Global Customer Accounts: 
Press Release
CHICAGO, November 4, 2011 – Today, CME Group continued to successfully transfer additional MF Global U.S. customer positions and CME Clearing-held collateral to other qualified clearing firms. The remaining customer segregated positions are expected to be transferred by the end of the day, completing the total transfer of customer positions at CME Group exchanges in approximately 15,000 MF Global accounts and approximately $1.45 billion in associated clearing collateral, as approved by the Trustee and bankruptcy court.
http://jlne.ws/ry6Hlh

CME Group Clarifies Maintenance Margin Ratios – Exchange to Reduce Initial Margin Ratio to 1.00
Press Release
CHICAGO, Nov. 5, 2011 /PRNewswire/ — CME Group today is clarifying its notice to clearing firms regarding margins. In light of the issues customers transferring out of MF Global are facing, while still maintaining appropriate risk management protections for the market, CME Clearing is setting the “initial” margin upcharge to zero. This upcharge is normally applied to customer accounts when they are receiving a margin call.
http://jlne.ws/cjpXe7

U.S. Clearing Houses Announce MF Global Bulk Transferee Confirmation Service
Press Release
CHICAGO, Nov. 4, 2011 /PRNewswire/ — As part of the bulk transfer process for MF Global customer accounts and collateral held at U.S. derivatives clearinghouses, CME Clearing, ICE Clear US, The Clearing Corporation, KCBOT Clearing Corp., MGEX, NYSE Liffe US and The Options Clearing Corporation have coordinated to provide clients with further information on the status of their account transfers.
http://jlne.ws/cjpXe7

CME Group Continues Transfer of MF Global Customer Accounts
Press Release
CHICAGO, Nov. 4, 2011 /PRNewswire/ — Today, CME Group continued to successfully transfer additional MF Global U.S. customer positions and CME Clearing-held collateral to other qualified clearing firms. The remaining customer segregated positions are expected to be transferred by the end of the day, completing the total transfer of customer positions at CME Group exchanges in approximately 15,000 MF Global accounts and approximately $1.45 billion in associated clearing collateral, as approved by the Trustee and bankruptcy court.
http://jlne.ws/cjpXe7

CME Group Statement on Transfer of MF Global Customer Accounts
Press Release
CHICAGO, Nov. 4, 2011 /PRNewswire/ — On November 3, 2011, CME Group successfully transferred nearly 5,300 MF Global customer accounts and more than $410 million of CME Clearing-held collateral to other qualified clearing firms. CME Clearing continues to hold MF Global proprietary and customer collateral that will be distributed upon instructions from the Trustee and the bankruptcy court.
http://jlne.ws/cjpXe7

MF Global: Exchange Clearing House Liquidations Website Statement
Press Release
Based on information received from the following exchanges and clearing houses, open trades and positions of MF Global UK Limited (in special administration) have been liquidated, with effect from the corresponding date listed. Accordingly, all open trades and positions with clients of MF Global UK Limited (in special administration) relating to products traded on these exchanges and clearing houses have been closed with effect from the corresponding date listed, and notifications are being sent to those clients that are affected.
http://jlne.ws/tj36Oj

ICE Clearing Houses Statement On Transfer Of MF Global Customer Positions
Press Release
IntercontinentalExchange (NYSE: ICE), a leading operator of global regulated clearing houses provided an update on its default management activities following the default of MF Global.
http://jlne.ws/sA44dP

CME Group Clearing Advisory
Press Release
IMPORTANT: CUSTOMERS WITH MF GLOBAL ACCOUNTS TRANSFERING
http://jlne.ws/s4Ok8i

CME Group Clearing Advisory
Notice of “Hold” for Any Accounts Transferred from MF Global, Inc. (“MFG”)
http://jlne.ws/s6C2KS

CME Group Clearing Advisory
Information for Clients of MF Global Canada
http://jlne.ws/tJ99DR

New York Portfolio Clearing Statement on Transfer of MF Global Customer Accounts
PR Newswire
NEW YORK, Nov. 4, 2011 /PRNewswire/ — Today, New York Portfolio Clearing (NYPC) successfully completed the transfer of all of its MF Global customer accounts and specified amounts of associated NYPC-held collateral to other qualified NYPC clearing firms according to the authorization and…
http://jlne.ws/spaxDM

MF Global UK Ltd – Transfer of segregated client positions
Press Release
LCH.Clearnet Ltd (LCH.Clearnet) is working with the LME and the administrators of MF Global UK Limited to facilitate the transfer of client positions held within LCH.Clearnet from MF Global UK Limited to other clearing members. All clients wishing to transfer positions, should visit the LCH.Clearnet website, follow the instructions and complete and return the documentation found at http://www.lchclearnet.com/mf_global_uk_limited_client_information.asp.

Hong Kong’s Securities And Futures Commission Gives Consent To MF Global Hong Kong Limited To Conduct Certain Activities
Press Release
http://jlne.ws/rMtE32

Former NJ Gov. Corzine steps down from collapsed securities firm, hires criminal attorney
Washington Post
WASHINGTON – He set out to create a mini-Goldman Sachs. In the end, he built a mini-Lehman Brothers. Former New Jersey Gov. Jon Corzine’s resignation Friday from the securities firm he led capped a week of high drama and swift failure. MF Global collapsed into bankruptcy Monday, and Corzine has since hired a criminal defense attorney amid an FBI investigation into the disappearance of hundreds …
http://jlne.ws/uo0oSm

MF Global Announces Resignation of Jon S. Corzine
Press Release
http://jlne.ws/cto7bF

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