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USANews版 - Investigators probe cash moves at MF Global
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发帖数: 29846
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The Wall Street Journal
23 Feb 2012
Investigators probing the collapse of MF Global are scrutinising two money
transfers made during the securities firm's final days in an effort to
uncover what happened to $1.6bn in missing customer funds.
Investigators probe cash moves at MF Global
Federal regulators at the Commodity Futures Trading Commission and the US
bankruptcy trustee for MF Global's brokerage unit are examining two separate
transfers from customer accounts, including a previously undisclosed $165m
transaction, said people familiar with the matter.
They said some of the investigators are poring over emails and records
related to these and other money transfers.
MF Global collapsed into bankruptcy on October 31, hurt by repercussions
from an outsize bet its chief executive, Jon Corzine, made on bonds of
troubled European countries.
Among those at the centre of money transfers in the days leading up to the
collapse was Edith O'Brien, an assistant treasurer at MF Global.
On the morning of October 28, according to people familiar with the matter,
O'Brien received a call from Corzine, who asked her to resolve a problem:
the firm's bank account at JP Morgan Chase in London had run out of money,
creating an overdraft.
After the call, O'Brien sent an email to about a dozen colleagues. "I need $
175m sent immediately," said the message, a copy of which was reviewed by
The Wall Street Journal.
Money to cover the overdraft was transferred to the London bank account
later that day from MF Global's customer account, according to regulators
and former MF Global officials.
As the chaos mounted at MF Global, O'Brien stopped leaving the office at
night, napping on a bench in between long spells of trying to juggle
transfer demands.
Corzine later thrust O'Brien into the spotlight when he told a congressional
panel in December that she had assured him the $175m transfer was proper.
Federal rules for futures trading allow brokerage firms to keep some of
their own money in customer accounts, for reasons that include providing
clients with ease of trading, and this money can be withdrawn. But customer
funds are never to be touched.
O'Brien later declined to sign documents presented by JP Morgan affirming
that the $175m transfer had been proper, said people with knowledge of the
matter.
Prosecutors and lawmakers have sought to meet with O'Brien, but she has so
far declined, asking for legal immunity before agreeing to talk with them,
people familiar with the matter said.
Neither O'Brien, Corzine nor other MF Global officials have been accused of
any wrongdoing.
This article is based on a review of internal MF Global emails and documents
, as well as interviews with people with knowledge of the circumstances
surrounding the securities firm's frantic final days.
The emails and other documents reviewed by the Journal disclose new details
about the $175m transfer as well as revealing the other transaction - for $
165m - that may have contributed to the shortfall in accounts of MF Global
customers.
JP Morgan, as a clearing bank for MF Global, played a part in both transfers
. So did officials in MF Global's Chicago office, where O'Brien and several
dozen others worked in relative obscurity while Corzine - a former Goldman
Sachs chairman and later a senator and governor in New Jersey - sought to
remake the sleepy commodities firm into a risk-hungry trading house.
O'Brien was among those responsible for moving funds when customer accounts
were tapped, said people familiar with details of the securities firm's
demise.
To keep track of both customer and firm money, MF Global relied partly on a
computer spreadsheet that had to be updated manually.
The rush of activity in MF Global's final days caused many more erroneous
trades than the firm would normally have in a similar period, according to
James Giddens, the bankruptcy trustee in charge of MF Global's US brokerage
unit, who has raised concerns about whether anything close to the $1.6bn
total now estimated to be missing can be recovered.
O'Brien and some of her MF Global colleagues didn't realise there was a
shortfall in customer accounts until it was too late, according to people
familiar with the matter. They added that the Chicago employees expected
that some trades happening in those final days would bring cash back to the
firm's customer accounts. But not all the funds returned as anticipated.
On Wednesday, October 26, five days before MF Global's collapse, officials
in Chicago approved a $165m transfer between two units of the firm around
5pm Central time, the internal documents show.
Shortly after, $165m arrived at an MF Global account at JP Morgan, and these
funds had been pulled from the customer account, according to the documents
and people familiar with the transfer.
October 26 was the first day MF Global customer accounts showed a shortfall,
according to the bankruptcy trustee.
Two days later, MF Global officials tried to reverse the transfer from the
customer account, documents show. The result of those efforts is unclear.
By that day - Friday, October 28 - the situation had grown worse. O'Brien
was staying at work all night, napping occasionally on a bench in her office
, a person familiar with the matter said.
That Friday morning, when Corzine called about the overdraft in the London
JP Morgan account, he told O'Brien that unless the overdraft was remedied,
JP Morgan wouldn't make any more trades for MF Global, depriving the
securities firm of incoming cash.
When $175m subsequently landed in the JP Morgan account, it may have not
been clear whether the funds belonged to customers, since the customer
account handled both MF Global money and customer money, according to people
familiar with the situation.
After JP Morgan received the money to remedy the overdraft, Corzine called O
'Brien again, telling her the bank wanted assurances the transfer hadn't
improperly come from customer money, people familiar with the situation said
. O'Brien received a letter originally sent from the bank asking for a
signature acknowledging that the funds had been moved properly.
MF Global's general counsel, Laurie Ferber, and Dennis Klejna, assistant
general counsel, worked with O'Brien to try to find a version she was
comfortable signing, but were unsuccessful, people familiar with the
situation said. O'Brien and others felt the letter was too broadly written,
these people said.
The next day, JP Morgan sent a revised letter addressed to O'Brien, a copy
of which was reviewed by the Journal. She never signed the letter, according
to people familiar with the matter.
Corzine and others received daily reports about the customer accounts,
specifically information about how much of the firm's available money sat
alongside clients' funds. Corzine has said he didn't know of any deficit in
customer funds until hours before the Monday, October 31, bankruptcy filing.
- Write to Julie Steinberg at j*************[email protected], Aaron Lucchetti
at a*************[email protected] and Mike Spector at m**********[email protected]
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相关话题的讨论汇总
话题: global话题: mf话题: brien话题: customer话题: jp