What is in this article?:
- MF Global a year on: reports, investigations and a nervous agricultural sector
- Reports and prosecutions
- It has been just over a year since the collapse of commodities brokerage MF Global and the disappearance of some $1.2 billion -- much of it invested by the U.S. agriculture sector -- in illegally-accessed, and supposedly segregated, customer funds.
- Despite numerous investigations and hearings on Capitol Hill, disgraced MF Global head Jon Corzine and other executives of the brokerage have thus far escaped prosecution.
It has been just over a year since the collapse of commodities brokerage MF Global and the disappearance of some $1.2 billion -- much of it invested by the U.S. agriculture sector -- in illegally-accessed, and supposedly segregated, customer funds. Despite numerous investigations and hearings on Capitol Hill, disgraced MF Global head Jon Corzine and other executives of the brokerage have thus far escaped prosecution.
For full coverage, see here.
During several hearings, Corzine -- a former New Jersey senator and governor -- claimed he was unaware of the “misuse” of customer funds at the brokerage, a word he used repeatedly. “I didn’t authorize it, didn’t intend to have it happen,” he told the Senate Agriculture Committee last December.
On Thursday (Nov. 15) morning, the House Financial Services Committee’s Subcommittee on Oversight and Investigations is expected to release a report on its MF Global findings. The House report follows a recently published 400-plus page Commodity Futures Trading Commission (CFTC) proposal pushing for better customer fund protections.
On Nov. 13, Farm Press spoke with John Roe, principal at BTR Trading Group, and co-founder of the Commodity Customer Coalition, a group that has been working to ensure MF Global customers are made whole and needed trading reforms put in place.
For more on Roe, see here.
Among Roe’s comments:
On making MF Global customers whole…
“The trustee may look at doing another distribution -- between 5 and 10 percent -- before the end of the year. We’re not sure if he’ll have the funds to do that but, if he does, we’ll be very happy.
“If that doesn’t happen before the end of the year, hopefully it’ll be during the first quarter of 2013.”
On the House report due out on Thursday…
“We’ve met with (Texas Rep. Randy Neugebauer, chairman of the subcommittee) and his staff about that report. I think it’ll be a very nice summary of everything that’s transpired. They’ve worked very hard to put together the information. I’m told there are boxes and boxes of evidence that they’ve been going through.
“I’m not sure what new information will be revealed but I think there will be some. They’ve certainly interviewed a great number of witnesses. Other than the SIPA (Security Investors Protection Act) trustee’s investigation report, it probably will be the most comprehensive, publicly-available report on the collapse of MF Global.”
On the continuing fall-out in the trading industry and agriculture’s concerns…
“I think, for the most part, people have the exact same feelings (as shortly after MF Global’s collapse). Obviously, a lot of the passion has died down because it’s a year later and people must move on with their lives. But the negative sentiment is still there and remains very palpable.
“The victims are still upset. Those who weren’t victimized still worry they could become victims and are still nervous about the safeguards.
“In the agriculture sector, especially, we’re seeing renewed concerns from farm credit system banks. They’re worried about how segregation works in the commodity industry.
“People still have the same desires they had the day MF Global went down: better, more efficient regulation, enforcement of laws on the books and, perhaps, insurance or an alternative method of segregation when all else fails.
“Some have taken note of the lack of clamor and determined that’s a sign people have renewed confidence in the industry. I think that misreads the situation. Again, people still have the same concerns they had a year ago.
“There have been some positive developments. The NFA (National Futures Association) has made some positive rule changes. The CFTC has adopted some rule changes, as well. However, the situation is still fundamentally the same.”
Note: Created by the CFTC, the NFA is a self-regulatory organization tasked with policing the futures industry.