CME Chairman Testifies To Congress: "A Senior MF Global Employee Indicated To Us That Mr. Corzine Knew Loans Had Been Made From Customer Segregated Accounts"

August 25, 2012

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Source: Daily Bail

This is a must see. More evidence that Jon Corzine is guilty:

CME Group Chairman Terry Duffy tells the Senate that CEO Jon Corzine knew loans were made from customer accounts - Dec. 13, 2011.

Eric Holder: What the hell else do you need to hear...

The senior employee's name is undoubtedly Edith O'Brien.

O'Brien is the key to this case and she's not talking, at least publicly, but that hasn't stopped Corzine and his lawyers from implicating her for the impermissible transfers to JPMorgan.

She's not a lightweight:

Ms. O’Brien is considered an expert of sorts on the protection of customer money at futures firms. In the last year and a half, Ms. O’Brien has made several appearances before the Commodity Futures Trading Commission. On at least two occasions, she was a panelist at roundtable discussions held at the agency on the topic of safeguarding customer money, and also attended at least three meetings with agency officials, including one titled “Practicalities of Individual Customer Protection.”

Slammed by Corzine:

“I had explicit statements that we were using proper funds, both orally and in writing, to the best of my knowledge,” he told the panel. “The woman that I spoke to was a Ms. Edith O’Brien.” But JPMorgan was not satisfied. The bank once again contacted Mr. Corzine, this time requesting a guarantee in writing. Mr. Corzine handed the request to his general counsel, Laurie Ferber. Ms. Ferber would not authorize the document, according to one of the people close to the investigation, saying the firm did not offer such special assurances.

Two days later, at about 6 p.m. on Sunday, Oct. 30, Ms. Ferber notified regulators that there was an apparent shortfall in customer money. She blamed an accounting error, according to the CME Group, the firm’s primary regulator and an exchange where it conducted business.

At about 1 a.m., Ms. O’Brien and another executive in Chicago told the exchange that the shortfall in the customer accounts was real, according to the CME.

Continue readng at Dealbook...

Janet Tavakoli adds detail:

Jon Corzine claims he didn't know about improper transfers of customer funds and of shortfalls in customer accounts until October 30, yet on Thursday, October 27, four days before the bankruptcy and again on Friday, October 28, three days before its bankruptcy, dozens of MF Global customers asked for wire transfers when they closed accounts, and they didn't get them. Instead, MF Global wrote paper checks and sent the checks via snail mail. The checks bounced, since customers received them after MF Global declared bankruptcy on Monday, October 31.

Clients Raise Questions About MF Global Checks - NY Times Dealbook

MF Global and the Rubber Check - Reuters