Corzine Ordered $200M Moved to JP Morgan Days Before MF Global Collapse Phil Mattingly and Silla Brush Bloomberg March 23, 2012 Jon S. Corzine, MF Global Holding Ltd.’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund account to meet an overdraft in a brokerage account with JPMorgan Chase & Co. (JPM), according to a memo written by congressional investigators. Edith O’Brien, a treasurer for the firm, said in an e-mail quoted in the memo that the transfer was “Per JC’s direct instructions,” according to a copy of the memo obtained by Bloomberg News. The e-mail, dated Oct. 28, was sent three days before the company collapsed, the memo says. The memo does not indicate whether that phrase was the full text of the e-mail or an excerpt. O’Brien’s internal e-mail was sent as the New York-based broker found intraday credit lines limited by JPMorgan, the firm’s clearing bank as well as one of its custodian banks for segregated customer funds, according to the memo, which was prepared for a March 28 House Financial Services subcommittee hearing on the firm’s collapse. O’Brien is scheduled to testify at the hearing after being subpoenaed this week. “Over the course of that week, MF Global’s financial position deteriorated, but the firm represented to its regulators and self-regulatory organizations that its customers’ segregated funds were safe,” said the memo, written by Financial Services Committee staff and sent to lawmakers. Steven Goldberg, a spokesman for Corzine, said in a statement that Corzine “never gave any instruction to misuse
customer funds and never intended anyone at MF Global to misuse customer funds.”
JPMorgan Overdraft Vinay Mahajan, global treasurer of MF Global Holdings, wrote an e-mail on Oct. 28 that said JPMorgan was “holding up vital business in the U.S. as a result” of the overdrawn account, which had to be “fully funded ASAP,” according to the memo. Barry Zubrow, JPMorgan’s chief risk officer, called Corzine to seek assurances that the funds belonged to MF Global and not customers. JPMorgan drafted a letter to be signed by O’Brien to ensure that MF Global was complying with rules requiring customers’ collateral to be segregated. The letter was not returned to JPMorgan, the memo said. The money transferred came from a segregated customer account, according to congressional investigators. Segregated accounts can include customer money and excess company funds.
Corzine Testimony Corzine, 65, in testimony in front of the House panel in December, said he did not order any improper transfer of customer funds. Corzine also testified that he never intended a misuse of customer funds at MF Global, and that he doesn’t know where client funds went. “I never gave any instruction to misuse customer funds, I never intended anyone at MF Global to misuse customer funds and I don’t believe that anything I said could reasonably have been interpreted as an instruction to misuse customer funds,” Corzine told lawmakers in December. In his statement, Goldberg said Corzine did not specify which funds should be used to replenish the JPMorgan account. “He never directed Ms. O’Brien or anyone else regarding which account should be used to cure the overdrafts, and he never directed that customer funds should be used for that purpose,” Goldberg said. “Nor was he informed that customer funds had been used for that purpose.”
$1.6-Billion Shortfall The bankruptcy trustee overseeing the liquidation of the company’s brokerage subsidiary has estimated a $1.6-billion shortfall between customer claims and assets available.
Lawmakers and investigators from the Commodity Futures Trading Commission, Securities and Exchange Commission and Department of Justice have been reviewing events leading up to MF Global’s bankruptcy filing. Executives including Corzine, a Democrat who served in the Senate before he was elected governor of New Jersey, gave testimony on the collapse at three congressional hearings last year. “If client funds were transferred at his direction, it raises new questions,” Seth Berenzweig, managing partner at Berenzweig Leonard LLP, a law firm in McLean, Virginia, said in an interview with Bloomberg Television. “This is a new storm cloud that is now headed for Jon Corzine and it raises a lot of issues.” Representative Randy Neugebauer, a Texas Republican and chairman of the Financial Services oversight and investigations subcommittee, is preparing a final report on his investigation into the firm’s failure.
‘What Went Wrong’ “One of the goals of our investigation is not only to find out where the money went but to identify what went wrong in order to prevent this from happening again,” Neugebauer said in a statement. O’Brien is scheduled to appear before lawmakers with Christine Serwinski and Laurie Ferber, two other MF Global executives named by Corzine as being involved in the transaction, according to the memo. Henri Steenkamp , the firm’s chief financial officer, is also scheduled to testify, as is a representative from JPMorgan who has not yet been identified. MF Global and its brokerage sought Chapter 11 bankruptcy after a $6.3 billion bet on the bonds of some of Europe’s most indebted nations prompted regulator concerns and a credit rating downgrade. Corzine quit MF Global Nov. 4. During his testimony, O’Brien was identified by Corzine as someone with knowledge of a transfer of funds from customer accounts before the firm sought bankruptcy protection Oct. 31. Reid H. Weingarten, O’Brien’s lawyer, did not immediately respond to a phone call and e-mail seeking comment. The memo’s account of the e-mail exchanges aligns with what Terrence Duffy, the executive chairman at CME Group Inc. (CME), told lawmakers during a December congressional hearing. Auditors at CME, which had authority to oversee MF Global, learned from an employee of the brokerage that Corzine knew about the loans involving a European affiliate, Duffy told committee members.
You Read It Here First: Google’s ‘Ambient Background’ Spy Tech Paul Joseph Watson Prison Planet.com Friday, March 23, 2012 ‘Internet of things’ also a surveillance tool for authorities Six years ago we warned readers that Google was planning to use the ambient background noise of a person’s environment to spy on their activities in order to direct targeted advertising at them through technological devices. That has now come to fruition with the search engine giant filing a petition for “Advertising based on environmental conditions.” “As that title implies, it’s not just background sounds that could be used to determine what adverts you seen on your mobile phone. The patent also describes using ‘temperature, humidity, light and air composition’ to produced targeted adverts,” reports the Daily Mail. In other words, Google is going to spy on your private conversations, music preferences, TV watching habits, your choice of radio station, and whatever else is happening in your immediate environment, in order to build a psychological profile of your entire life. The current patent relates to smart phones, but any Inter-connected device could ultimately be used for the same purpose. Indeed, back in 2006 when we first reported on the issue, Google was already finalizing plans to spy on an individual’s ambient background environment by means of the microphone embedded in their personal computer. In an article entitled Government, Industry To Use Computer Microphones To Spy On 150 Million Americans, we reported how Google was “planning to use microphones in
the computers of an estimated 150 million-plus Internet active Americans to spy on their lifestyle choices and build psychological profiles which will be used for surveillance and minority report style invasive advertising and data mining.” Google’s efforts to spy on users via their cell phones is part of the wider move towards the ‘Internet of things’ where virtually every technological appliance will be connected to the web, opening a pandora’s box of surveillance opportunities. Given that the private industry is already licking its lips at the commercial prospects for this technology, don’t be naive to think that the state isn’t too far behind. CIA Director David Petraeus recently lauded this development as “transformational” because it would open up a world of new opportunities for “clandestine tradecraft,” or in other words, make it easier for intelligence agencies and governments to spy on you via your dishwasher. Petraeus said the emergence of so-called ‘smart’ devices would “change our notions of secrecy,” allowing authorities to track individuals via their household appliances. “Once upon a time, spies had to place a bug in your chandelier to hear your conversation. With the rise of the “smart home,” you’d be sending tagged, geolocated data that a spy agency can intercept in real time when you use the lighting app on your phone to adjust your living room’s ambiance,” reports Wired. “Items of interest will be located, identified, monitored, and remotely controlled through technologies such as radio-frequency identification, sensor networks, tiny embedded servers, and energy harvesters—all connected to the next-generation Internet using abundant, low cost, and high-power computing—the latter now going to cloud computing, in many areas greater and greater supercomputing, and, ultimately, heading to quantum computing,” Petraeus told attendees at a meeting for the CIA’s venture capital firm In-Q-Tel.
New Ron Paul Ad Slams ‘Etch-a’Sketch’ Idiocy Steve Watson Prisonplanet.com March 23, 2012 While the other candidates are playing games, Paul is fighting to Restore America Now For the past week the media, along with GOP presidential candidates Mitt Romney, Rick Santorum and Newt Gingrich, as well as the incumbent president, have fixated on a throw away remark about an ‘etch-asketch’ by a Romney communications advisor. That’s right, while the economy continues its seemingly never ending spiral into a black hole, while innocent people continue to be slaughtered needlessly in Afghanistan, while the rhetoric over attacking Iran increases, and while everyday Americans are stripped of more and more basic freedoms, the candidates have held up plastic toys and beat the American voting public around the head with a distinctly average metaphor. Enough is enough for Ron Paul, who today released a new ad outlining the idiocy of the spectacle and how it reflects a wider picture where the presidential race is concerned. The internet only ad uses cringe inducing clips of Santorum and Gingrich brandishing Etch-a-Sketches at campaign events, along with corporate media hacks relentlessly filling their already comatizing schedules with fluff and nonsense about the children’s game. “Tired of the games?” the hollywood trailer style video asks, before touting Paul as the only candidate who is “principled” and “consistent” with a “serious” plan to address the real
problems America faces. The ad “will be pushed to conservative email lists” and websites, according to a press release from the Paul campaign. “In the context of $15 trillion in federal government debt, 12 million Americans jobless, and a country perpetually at war there is zero justification for treating the election as something to be toyed with.” the statement reads. “Conservatives and Constitutionalists have long been concerned about Mitt Romney’s track record of position changes and flip-flops, and his top adviser’s slip of the tongue only reinforces this suspicion,” said Ron Paul 2012 National Campaign Chairman Jesse Benton. “It is equally off-putting to see Santorum and Gingrich react like carnival barkers, not the statesmen America sorely needs. But, none of this is surprising,” added Mr. Benton. “While the other candidates and the political chattering class are obsessed with horse-race politics and scoring public relations points, Dr. Paul stands alone in offering real solutions to difficult problems. He is the only candidate with a ‘Plan to Restore America’ that cuts real spending and balances the budget in one term, ends the foreign wars and nationbuilding, cuts taxes and regulations to create jobs, and reigns in the Federal Reserve,” the statement concludes. Watch the Etch-a-Sketch ad below: Ron Paul Ad: Etch A Sketch http://www.youtube.com/watch?v=d5pLrwINs1o
Published on Mar 23, 2012
Published on Mar 23, 2012
Jon S. Corzine, MF Global Holding Ltd.’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund a...