Customer Money Stolen from MFGlobal Found but Still Lost

Even though investigators have figured out where most of the money stolen from customer accounts with failed commodities broker MFGlobal we are still no closer to knowing who got paid and whether it can be clawed back.

Citing the worry that releasing who got paid with stolen money would hurt their chances at actually recovering said funds, a convoluted piece of logic to say the least,  we are still no closer to knowing what actually happened in the days leading up to the Oct. 31st bankruptcy event.

Well, that is officially, of course.  The investigation into the matter is dragging on without resolution because no one is willing to do the right thing and make whole those who were stolen from.  Bankruptcy trustee Louis Freeh is working on behalf of the creditors, who have lined up in front due to the way the bankruptcy was filed… to their benefit.  This is the prime reason for the delay.  His staff is reviewing his clients documents at a snail’s pace.

Everyone knows where the money went but those involved don’t care because they represent the people who initiated the theft. Mr. Freeh’s concerns for his charges, the creditors, would not be an issue at all had MFGlobal bankruptcy been filed with the firm as a clearing house rather than a securities broker.  That is what has allowed the creditors to set the terms of this case and, in turn, bankrupt thousands of small account holders to cover for JPMorgan who is the 800 lb. gorilla in the room and where most of the stolen money wound up.

 

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Tom Luongo

About Tom Luongo

Tom Luongo is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.

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