MF Global- enter George Soros stage left
The latest about MF Global.
Immediately after the bankruptcy, the trustee for the bankruptcy sold $2 billion of Italian government bonds to JP Morgan and George Soros. Today we learn that the trustee sold these assets AT A 5% DISCOUNT to the market value of those bonds at the time of the sale. The bonds were trading for 94% of their face value when the sale occured. The sale was for 89% of their face value. Now they are selling for 96% of their value.
Further, it turns out that there are no controls over the trustee for the SIPC, a guy named James Giddens of the law firm Hughes Hubbard & Reed LLP. This past March the SEC Office of the Inspector General audited the actions of the SIPC and pointed out that there are no controls whatsoever over the amounts charged by the trustee. Of course, the Obama adminstration has done nothing to correct this. How much are the fees? Well for Lehman the fees were $642 million. A New York judge found them to be excessive- but he had no choice but to approve the charges.
We also have learned that JP Morgan, an unsecured creditor of MF, was already paid amounts owed to it before the less influential individual or small company customers of MF who famously have lost over $1 billion of their own money which was supposed to be held in segregated accounts, and about which the estimable Mr. Corzine knows nothing. (And why should he? Before the bankruptcy, MF had total shareholder equity of about $1.3 billion. So the amount of funds that Corzine et al really don’t know about was only equal to the entire net worth of the company. I mean, what self-respecting CEO can keep track of such trivia? It’s lunch money.
To summarize, our list of perps and perp-enablers in this theft of $1.2 billion from innocent investors include the following Democrats: John Corzine, Democrat former Senator and governor, fundraiser for Obama; George Soros; Bill Clinton (through MF Global advisory fees); and Gary Gensler, head of the CFTC, Democrat fundraiser and office-holder.