Live Feed House MF Hearing

#PFGBest Customers

Are you a customer of PFGBest? The CCC is working with regulators and monitoring the court on behalf of PFG customers. At this stage, we are advising customers to gather their statements and prepare for a claims or account transfer process.

Stay tuned to our website for more information.

http://www.c-span.org/Events/Jon-Corzine-Testifies-on-MF-Global-Again/10737426329-1/

#MFGlobal Customers

Are you a customer of MF Global? The CCC formally represents more than 200 clients in the bankruptcy process of MF Global on a pro bono basis, and informally represents thousands more in the public domain.

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About John Roe 91 Articles
Co-Founder of the CCC and head of BTR Trading and Roe Capital Management.

42 Comments

  1. James or John,
    I live in Cong. Bill Posey’s dist. and know him personally. If I can get in contact with him during the Christmas break, what would be the most important issue(s) that I could convey to him. Also received my 72%. Keep up the good work.
    Thanks,
    GL Goolsby

    • We spoke with Congressman Posey the day of the hearing and have worked with his staff. Please thank Congressman Posey for everything he has done to date and let him know we are interested in working with his office going forward.

  2. I have learned that the Trustee has given all Treasuries a 95% haircut before then applying the 72% haircut. Treasury Bill owners may have an issue with this as you are likely to not get the full 72% of your account value. No doubt the Trustee did this for simplicity, as they will not have to value each Treasury Bill separately.

    • Way to go Don. T he whole industry can’t tell a BIG LIE that segregated funds are safe and then when they’re not safe turn around and say the theft was legal and it was all in the fine print in the contract we signed. That is just not Truth Justice and the American way.I think a jury of our peers would agree.

    • Nice of them to see that you got a email that, to me, looks like it is an auto-response.

      BTW Don, very well worded email to her from you….ensures that the MFG customers know that the CFTC is failing them.

  3. It’s obvious now that the missing 1.2 billion came from MFG borrowing cust funds to back house margin calls. On Friday they sold 1.3 billion in commercial paper to replace cust funds just like rule 1.25 demands. Somehow 1.2 billion in commercial paper never got back to MFG. I think we can now assume where it ended up.

    Rule 1.25 calls for customer funds to be instantly backed by the highest rated collateral. MFG violated the rule 1.25 when someone grabbed the 1.2 billion in commercial paper that MFG intended to back customer fund borrowings.

    It’s quite obvious now where the pressure needs to be directed as James and John demonstrated in yesterdays Forbes story. Hopefully public attention will cause JPM to release customer collateral.

    I’m not sure what the timing is in rule 1.25 that requires cust funds to be backed by the highest rated collateral it appears that MFG attempted to follow the rule and perhapse fines are in order and not jail time.

    • Assuming Sammy is right then we know who
      percipitated the entire mess .If the collateral wasn’t seized the accounts wouldn’t have been short and the accounts would have been transferred whole and we wouldn’t have suffered the emotional distress for the last seven weeks .Sounds like a class action suit to me! We should start a new rally call. GIVE IT BACK JAIME GIVE IT BACK !

  4. Yes, this is a huge mess, but today I checked my RJO acct and it now has 72% of my total @ time of transfer, so we are def moving in the right direction. I do think we’ll get more back from the claim, but will it bring us to 100%? I don’t know.

    Good thing is, regardless of the backstabbing and stonewalling by the govt agencies, John and James are still making great headway here.

    • It’s not 72% of our totals that hit new FCM accounts yesterday actually. They only have matched USD SEG (F1) part of our statements. I have some of my equity in USD SEC(F2) and foriegn currencies (SEC) so I’ve got 50%. Does anyone have any clue when SEC $$$ will be distributed and currencies will be converted to USD?

      • I’m in the same situation. Bulk transfer FCM is telling me I will only get true up to 72% of USD SEG (F1). Why is the trustee not including USD Sec (F2) account balances in the true up to 72%? What is the difference between F1 and F2 account types on the statement? I always look at converted total for my account balance.

        • The answer is neither Trustee nor SIPC has enough experience and knowledge in commodities industry. FCM must establish secured customer account to back up the customer trades in foreign exchanges. You get an equity call when your positions requires margin paid in say Can$ and a portion of F1 dollars go to F2 dollars via book entry and to CD SEC then. That does not make your money segregated. I had position in WGE Canola and RJO refused to get the position with no collateral under it and Winnipeg guys just liquidated my position by my request with no claims, forms etc. – it’s a good example of how self-regulated industry should act. Hopefully the SEC money and foreign currencies problem will be addressed soon. It’s a significant part of customer accounts I’m sure.

          • Whether or not trading on foreign exchange does or does not make the money segregated, I am not clear. However, the Trustee is not distributing it because he does not have it. Roughly $850 million of “secured” money (30.7 money, as opposed to 4d money which is the US segregated piece) that is backing trades on foreign exchanges was in the hands of MF Global foreign subs. It is now in the hands of foreign trustees/administrators. The bulk ($600m out of the $850m) is in the UK. The Trustee is persuing getting it transferred from UK Administrator so he has control of it. But it may be a long slog…

          • No entire amount of SEC $$$ is sitting in MFG account and as far as it is not converted into other currencies it’s under control of the Trustee. I would agree foreign currensies balances is out of reach of him so far and take additional efforts to get them back. Say you have 1MM in SEC$$ – where is this million in particular – UK, Germany, Canada? Correct answer is it’s in dollar account of MFG and it’s cleared via FED bank as any other $$$ asset and I see no probs to distribute it as any other segregated dollar. SEC dollar is as good as SEG one and the only reason Trustee makes distinction between them is he does not understand how the industry works. Look – he has transfered open positions thinking it’s in best customer interest but anyone who trades commodities would say it’s only good for FCM who collects extra commissions. Position is offset at MFG side and re-opened at new FCM with immediate margin call (hey, futures position differs from owing a stock – what a surprice!!!) and subj to immediate liquidation. Now, he’s ready to discover that true value of account is not it’s value in SEG $$$. Anyway we’ve purchased very expencive ticket and has any right to enjoy the show…

    • Well my RJO account is now at 58.5% of NLV based on the Triustee’s criteria (transaction date valuation). The only complication in the account are Treasuries. Despite numerous emails to the Trustee, they managed to screw it up. The right direction with two steps forward and one backward.

      • Looks like anyone who dares to hold anything except USD SEG (F1) cash by the end of business of 10/31/2011 is punished. The best way to get monies proved to be margined 100% in CME products and never trade foreign futures.

  5. MF Global Customers Target JP Morgan
    + Comment now
    Forbes
    Jamie Dimon, CEO of JP Morgan Chase; Image via Wikipedia

    James Koutoulas, the lawyer and futures trader who is representing MF Global customers in bankruptcy court, has a message for JP Morgan Chase Chief Executive Jamie Dimon: explain yourself. Koutoulas says he’s extending an “open invitation” to the head of the country’s biggest bank to meet with him, and he wants Dimon to tell him face-to-face why JP Morgan should get paid before farmers and other individual futures customers who are out money.

    • Way to go James! Ask him too why the biggest bank in the US one that should be respected continues to take positions opposite the public both in MFG and in the silver market as well.Is JPM a bank the public can rely on or a casino that is fading the small guys bets.If they want to be a casino why should they have acsess to the Fed ect ect .Is working against the small guy the image JPM wants?WE are 8000 strong and we will be heard and we will affect legislation.JPM needs to change it’s ways or they will reap a P. R. Disaster.Come out for the little guy the public.Support truth justice and the American way or be exposed as a member of the vampire squid club.

        • Absouletly! JPM is head of the creditors committee in the holding Co. Bankrupcy .Almost nothing will get done without them.We are certainly going to have to deal with JPM one way or another. There is probably enough for both of us but they have to keep their sticky fingers off of our pile. We might have to scream rape to get them to back off.

    • WOW just like in the comics.Our champion defender of Truth Justice and the American Way ,SUPERMAN, taking one the newest of the vampire squids whose tentacles are everywhere.Who lives by sucking the life blood out the little guy the defenseless.WHO has no shame and respects no laws.Go JAMES I mean Superman,watch out for kryptonite poison planted stories.The way to kill a vampire is with a silver stake.This particular vampire has a particular attraction to silver it’s been short 200,000,000 million oz and no one not even the CFTC could stop them.They ruined many little guys just like us! Fashion a silver stake and drive it through the vampire squids heart! Kill the beast the world will cheer you.But be careful because it might not even have a heart.

  6. Why does the CFTC (Sommers) keep making public statements hinting at no clawback rights for customers? Let me get this straight. The positions (repo to maturity) didn’t default and thus are still paying out full upon maturity. So… where is the excess $1.2 billion of customer funds? Someone has a $1.2billion profit from this and we can’t claw that back? It’s one thing to have a loss and no recovery, but someone has a profit and we still can’t claw that back? Am I missing something?

    • The distinction is that your account is in MF Global Inc, but those repo-to-maturity bonds and other big investments are OUTSIDE of MF Global Inc. Therefore, the trustee of the MF Global Inc liquidation can’t immediately reach out and grab them.

      He’s going to have to break down the legal wall and reach into the OTHER proceeding, the liquidation of MF Global Holdings Ltd. The legal groundwork for that isn’t laid yet.

      Meanwhile, you saw the motion where the trustee of MF Global Holdings (Louis Frees) tried to stop the trustee of MF Global Inc from distributing customer funds because he thought we should prove that our money is ours first. Luckily the judge didn’t fall for that.

      However, this event informs us that we’re going to have to deal with fighting between these two estates. Each has stakeholders, and each would like to claw money from the other. We know which direction the money should flow! However, I suspect there is going to be a lot of legal work to establish the legal basis for MF Global Inc’s estate reaching into MF Global Holdings to grab cash needed to make customers whole.

      We also know where the darn regulators sit. They have said several times in the hearings that we’re going to have to establish criminal intent. That seems nutty to me. I surely hope that the legal basis for getting our money back doesn’t involve establishing criminal intent, because that could take many years.

      • I haven’t seen anything about this. Can you point me to a few resources where I can read about what Sommers/the CFTC said about no clawbacks and/or the criminal intent requirement?

        • a few references are mentioned in the Salute Duffy thread. Also listen to Sommers last and final testimony this week in front of Ag committee when asked if she felt we should get clawbacks. Duffy said yes, she dodged it by saying “its complicated”. It was one of the first posed to her. She hid.

    • Yes you are missing the role of theCFTC in this mess.The CFTC and just about the whole industry sold us a BIG LIE. The segregate funds LIE is the reason I left my money with MFG.I will never forgive the CFTC for not backing us up,for essentially telling us we are on our own in bankruptcy court. Sommers is the worst of the lot .She has history of siding with the big interests and that probably explains her comments.Imagine if we all had to hire lawyers at 500 dollars an hour for say three years ?

      • CFTC delegated to CME (as DSRO).. I have that documented by GG.. At some point we have circle the wagons around the CME! In a talk with the NYT the reporter and I danced around the following question; If this problem was only $1B why was it not easily solved; and why has ti been allowed to fester? For the answer look at the boiler plate of many a brokerage.

      • I completely agree that the CFTC failed in its duty to protect our segregated funds. I don’t yet know exactly how they failed, but they failed.

        I want the resignation of all CFTC commissioners. …because they failed.

        A lot of people (and especially the congressmen today) seem to glom onto one theory, such as “rule 1.25 wasn’t strong enough”. Well I want to see it stronger, but it is very likely that the problem here is that some bozo didn’t follow a rule, not that there weren’t enough rules.

        Once we have facts we can be more specific about exactly what failed.

        Meanwhile, arguing about what the CFTC should have done doesn’t get our money back. Our money is in a big legal tangle, and we have to fight by rules that courts follow now, like it or not. It is the interpretation of words in the bankruptcy code that will get our money back.

        • Agree wholeheartedly with last paragraph. The legal angle (bankruptcy code + CFTC 190 + other statutes) are what will get us restitution. The Trustee (Giddens) seems to be emerging as a strong advocate, with a lot of resorces (paid for by SIPC).
          Someone broke the rules. Arguing about what the rules shoud have been (and how that can be fixed) is good, but does zero to help us get our money back.
          CFTC is a puzzle to me. They could be a strong supporter in our legal arguments but seem to be a split personality. Berkowitz (I thought) was supportive in testimony today. Gensler seems to have been supportive before he recused himself. BUT Ms Sommers seems to be on the other side??

          • Bart Chilton has been a supporter too he came out saying return of customer funds is his and the CFTC top priority.To bad Sommers isn’t on board.The commission is often split along party lines.Chilton is a Democrat Sommers a Republican.I would guess most of the customers are Republican so I guess that makes Sommers dare I say a turncoat.She is obviously supporting big money interests when her job is to protect the public.Shame on her and the commission as well. She should be called on this in the media who absolutely love to vilify Republicans.Sommers needs to support truth justice and the American way not the big banks!

  7. Someone needs to ask corzine is there any reason or circumstances that would allow FCM customer funds to be transfered to the BD ?

    Also Is there any reason customer funds could be transfered to the bd in the UK?

      • I started this mess thinking I just want my money back I don’t care about retribution ,Now I see that it won’t happen this way.It’s time to start demanding jail time for say the top 20 or so executives at MFG .Some one in this group will crack and sing for immunity. Maybe it will be Sewinski, This was no accident it was no act of God.It was criminal and the only way we will know what really happened is from someone on the inside.

    • O.K. I’ll ask.O where is the dough joni boy joni boy? O where is the dough shifty joni? I don’t know where it went, but I had no intent,We were busy and I have no acess to find it.

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