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A legal loophole in international brokerage regulations means that few, if any, clients of MF Global are likely to get their money back. Although details of the drama are still unfolding, it appears that MF Global and some of its Wall Street counterparts have been actively and aggressively circumventing U.S. securities rules at the expense (quite literally) of their clients. 

MF Global's bankruptcy revelations concerning missing client money suggest that funds were not inadvertently misplaced or gobbled up in MF’s dying hours, but were instead appropriated as part of a mass Wall St manipulation of brokerage rules that allowed for the wholesale acquisition and sale of client funds through re-hypothecation. A loophole appears to have allowed MF Global, and many others, to use its own clients’ funds to finance an enormous $6.2 billion Eurozone repo bet. 

If anyone thought that you couldn’t have your cake and eat it too in the world of finance, MF Global shows how you can have your cake, eat it, eat someone else’s cake and then let your clients pick up the bill. Hard cheese for many as their dough goes missing. 

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“7. Consent To Loan Or PledgeYou hereby grant us the right, in accordance with Applicable Law, to borrow, pledge, repledge, transfer, hypothecate, rehypothecate, loan, or invest any of the Collateral, including, without limitation, utilizing the Collateral to purchase or sell securities pursuant to repurchase agreements [repos] or reverse repurchase agreements with any party, in each case without notice to you, and we shall have no obligation to retain a like amount of similar Collateral in our possession and control.” 

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With weak collateral rules and a level of leverage that would make Archimedes tremble, firms have been piling into re-hypothecation activity with startling abandon. A review of filings reveals a staggering level of activity in what may be the world’s largest ever credit bubble. 
Engaging in hyper-hypothecation have been Goldman Sachs ($28.17 billion re-hypothecated in 2011), Canadian Imperial Bank of Commerce (re-pledged $72 billion in client assets), Royal Bank of Canada (re-pledged $53.8 billion of $126.7 billion available for re-pledging), Oppenheimer Holdings ($15.3 million), Credit Suisse (CHF 332 billion), Knight Capital Group ($1.17 billion),Interactive Brokers ($14.5 billion), Wells Fargo ($19.6 billion), JP Morgan($546.2 billion) and Morgan Stanley ($410 billion). 

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ORIGINAL: Termyn8or
Where do you think BP started?

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ORIGINAL: Fellow

I am sure there is an another "loophole" that would allow to put MF Global crooks behind the bars. Of course it will not happen to friends and donors to Obama (like Jon Corzine). It is basically organized crime and looting these people are doing. What we need is political will to prosecute. Obama administration is there to back up this kind of criminal behavior. 

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ORIGINAL: Fellow

I am sure there is an another "loophole" that would allow to put MF Global crooks behind the bars. Of course it will not happen to friends and donors to Obama (like Jon Corzine). It is basically organized crime and looting these people are doing. What we need is political will to prosecute. Obama administration is there to back up this kind of criminal behavior. 

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ORIGINAL: willbeurdaddy

There are almost certainly Sarbannes-Oxley violations in their financial reporting regardless of any other loopholes. The problem is this administration hasn't pursued even the most egregious violations of S-O.

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ORIGINAL: MrRodgers

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ORIGINAL: willbeurdaddy

There are almost certainly Sarbannes-Oxley violations in their financial reporting regardless of any other loopholes. The problem is this administration hasn't pursued even the most egregious violations of S-O.

It was under Bush that it was finally passed and signed during which those violations never been vigorously pursued.

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ORIGINAL: Owner59

So what has the majority party in power in the house done about it other that make it easier to flout the law?

It`ll be entertaining to see the ass-hats who promote bush-policy, criticizing what the results are.

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ORIGINAL: willbeurdaddy

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ORIGINAL: MrRodgers

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ORIGINAL: willbeurdaddy

There are almost certainly Sarbannes-Oxley violations in their financial reporting regardless of any other loopholes. The problem is this administration hasn't pursued even the most egregious violations of S-O.

It was under Bush that it was finally passed and signed during which those violations never been vigorously pursued.

1. "Bush did it too" is not a defense.
2. You are wrong that they werent vigorously pursued under the Bush administration. Health South and numerous FCPA violations enabled by S-O were pursued. Obama administration? Not a single prosecution related to the banking crisis that I can find.

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Yeah, sweetheart, because we know all this mess began with Obama.

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ORIGINAL: MrRodgers

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ORIGINAL: willbeurdaddy

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ORIGINAL: MrRodgers

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ORIGINAL: willbeurdaddy

There are almost certainly Sarbannes-Oxley violations in their financial reporting regardless of any other loopholes. The problem is this administration hasn't pursued even the most egregious violations of S-O.

It was under Bush that it was finally passed and signed during which those violations never been vigorously pursued.

1. "Bush did it too" is not a defense.
2. You are wrong that they werent vigorously pursued under the Bush administration. Health South and numerous FCPA violations enabled by S-O were pursued. Obama administration? Not a single prosecution related to the banking crisis that I can find.

Well you regularly point out 'this admin,' so I point out 'that admin,' is as guilty. The HealthSouth case was the first big case, (2002) under the law and there wasn't much at all after that.

We have not heard the last from DOJ on this most recent bank fleecing and the FCPA enforcement you speak of resulted from a pick-up by the DOJ in 2007 and now continues through this admin.

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ORIGINAL: submittous

Just another example of the privileged 1% playing the rest of us in the 99% as suckers. It's not an issue of conservative or liberal, Democrat or Republican it is an issue of haves and have-nots. It you have to ask who the sucker at the table is the answer is you. Those of us that didn't come from families worth hundreds of millions of dollars are ALL part of the 99%.

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ORIGINAL: Fellow

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Yeah, sweetheart, because we know all this mess began with Obama.

Obama administration near-absolute avoidance to prosecute financial crime is a scandal. Accounting fraud by banks for example is highly encouraged by the administration. Compare Obama administration handling the crisis with Savings and Loans scandal (that was about 40 times smaller problem) and you understand what I am saying.

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ORIGINAL: Fellow

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Yeah, sweetheart, because we know all this mess began with Obama.

Obama administration near-absolute avoidance to prosecute financial crime is a scandal. Accounting fraud by banks for example is highly encouraged by the administration. Compare Obama administration handling the crisis with Savings and Loans scandal (that was about 40 times smaller problem) and you understand what I am saying.

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ORIGINAL: willbeurdaddy

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ORIGINAL: submittous

Just another example of the privileged 1% playing the rest of us in the 99% as suckers. It's not an issue of conservative or liberal, Democrat or Republican it is an issue of haves and have-nots. It you have to ask who the sucker at the table is the answer is you. Those of us that didn't come from families worth hundreds of millions of dollars are ALL part of the 99%.

That lie was put to rest long ago. Take a look at the richest people in the US now and every 5 years going back. The change in names toally debunks this bullshit.