Corzine’s Testimony Contradicted, Auditor Outed — What Does it Mean?
- Posted on December 19, 2011 at 7:11pm by
Becket Adams
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After weeks of not knowing the whereabouts of the missing MF Global’s customer funds, events from last week’s Congressional hearings may have brought us one step closer to solving the mystery.
Corzine and the Missing Funds
Even before ex-CEO Jon Corzine appeared last week in front of the Senate Agriculture Committee to inform them that he didn’t know where the $1.2 billion of customer funds had gone, he has consistently denied any wrongdoing:
He reiterated this claim last Tuesday and added, “I never gave any instruction to misuse customer funds.”
The next day, the Commodities Futures Trading Commission (CFTC) claimed that the missing customer funds had been “found.”
Jill Sommers, who leads the CFTC investigation of MF Global, said in a Reuters article that regulators “are far enough along the trail” that they now know where the missing money went.
“Now it’s just finding out which ones of those transactions are legitimate and which ones of them are illegitimate,” she added.
However, it may not be as easy as Sommers makes it sound.
Another CFTC Commissioner Bart Chilton warned in a statement that the “thorough accounting of all customer funds remains a work in progress,” according to Reuters.
“Based upon the most up-to-date information available, I do not have confidence that we know where all the money went,” Chilton said.
CME’s Duffy Vs. MF’s Corzine
The star of last week’s hearing was the Chicago Mercantile Exchange (CME) Group Inc. Executive Chairman Terrence Duffy. Testifying as MF Global’s regulator and exchange, Duffy said the information would show that Corzine actually knew about the missing customer funds and the alleged improper transfers.
Terrence Duffy, executive chairman of the Chicago Mercantile Exchange (CME) Group (Source: Reuters)
In short, Duffy used his testimony to contradict Corzine.
“A CME auditor also participated in a phone call with senior MF Global employees wherein one employee indicated that Mr. Corzine knew about loans that had been made from the customer segregated accounts,” Duffy stated, emphasizing that Corzine was well aware of what was happening with the money.
“CME Group has provided this information and the names of these individuals to the Department of Justice and the CFTC who are investigating these matters,” Duffy said.
Needless to say, the committee was not pleased by the news.
Auditor Named
By Thursday night last week, the auditor noted by Duffy had been outed.
Meet Director of Audits Mike Procajlo. Procajlo has not yet spoken with the media and a CME spokesperson would not comment on a corporate timeline containing information about the missing funds.
Through the CME timeline for the House Financial Services Committee, the exchange paints the following picture:
Prior to the firm’s implosion, MF Global officials were adamant that the missing customer funds were an accounting error because it was “too big to be anything else.”
On the day of the firm’s bankruptcy, early on October 31, the MF Global executives told Procajlo the customer fund shortage was real with almost $700 million going to the broker-dealer side for liquidity problems due to transactions, possibly beginning from October 26.
In addition, Procajlo was also told by MF that a $175 million segregated fund loan went to the firm’s U.K. office.
Procajlo was involved in an early conference call with senior MF Global staff on October 31, “wherein one employee indicated that Corzine knew about loans that had been made from the customer segregated accounts,” according to Reuters.
A few hours later, the firm declared bankruptcy.
If investigators really want to know how MF Global was commingling funds, who was involved in those decisions, and where all that money went, Procajlo is probably their best bet. To put it plainly, he may be the person who implicates or exonerates MF Global’s top brass.
Corzine Responds
The former New Jersey governor, senator and Obama fundraiser answered to the timeline and its allegations by informing the House Financial Services oversight subcommittee last Thursday that he was unaware of the improper use of customer funds.
He told Congress he had no idea what Duffy was talking about.
“Let me be clear. I did not instruct anyone to lend customer funds to MF Global or any of its affiliates, nor was I told that anyone had done so,” the disgraced ex-CEO reiterated.
What does it all mean?
Although Corzine and Duffy “barely know each other,” as Reuters points out, their businesses were “enmeshed in the clubby futures trading world.”
The CME made money from MF Global’s trading, and was supposed to watch for violations of rules designed to protect investors. This business relationship has led some analysts to speculate that Duffy’s strongly-worded testimony was merely a “save face” ploy, and that he targeted Corzine in an attempt to draw attention away from CME.
But even if Duffy’s testimony was given only in the interest of self-preservation, and that he was singling-out Corzine as a scapegoat, he may have unintentionally outed one of the most important characters in the MF Global drama: Mike Procajlo.
[Editor’s note: portions of the above originally appeared on Wall St. Cheat Sheet.]
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Comments (116)
patbarker
Posted on December 19, 2011 at 8:59pmObama, DNC, Soros,lib media….lol, what a joke!!! follow the money trail…Dems get a pass
if this were a GOP type, lib fishwraps,media would be howling!!!!
It’s really amazing…how longsuffering and patient our Lord is. It‘s a wonder he hasn’t taking Washington down to the slab!!! he did send a warning via earthquake
He calls for men (and women) everywhere to repent….they will be a day of accounting one day for everyone.
“he that ears to hear what the Spirit is saying….”
Report Post »expatinontariocanada
Posted on December 20, 2011 at 8:53amOh Pat, you are so right…Renounce all oaths to men/women, Repent for ones sins and transgressions, and Return to the way of the Lord. The day is oh so near.
Report Post »tmplarnite
Posted on December 20, 2011 at 10:57amThey need to round up the his “hole” gang, Dodd, Frank, Pelosi, Reid, Schumer, Kerry, Obummer and his chicago thugs, Biden, Holder, Durbin, Waxman…….“Whew”… et all…then hang ‘em all in the town square!
Report Post »Ruler4You
Posted on December 20, 2011 at 11:40amI’ll tell you what it means, IMHBLO.
It means that Corzine knows he isn’t going to be held accountable for massive fraud and malfeasance, theft, robbery, conspiracy et al and the tax payer WILL be.
Report Post »CultureWarriors
Posted on December 20, 2011 at 11:48amLie to congress – go to jail. Have fun in your 6 x 9 wearing an orange jumpsuit!
Report Post »1654American
Posted on December 21, 2011 at 8:03amIt will be interesting to see if the Justice Department, Holder and Obama, will prosecute and jail Corsine. He’s who Biden and Obama call for economic policy and campaign funding. He’s also one of those 1% fat cat Wall Streeters with a corporate jet. Oh, Sweet Irony!
Report Post »South Philly Boy
Posted on December 19, 2011 at 8:51pmHe NEEDS to GO to JAIL
Report Post »V-MAN MACE
Posted on December 19, 2011 at 8:58pmYes.
Arrest him.
Report Post »GeorgieJo
Posted on December 19, 2011 at 9:33pmObummer and Biden PRAISED this guy—-Corzine—>Mr GOLDMAN SACHS/ex governor/ ex senator
Corzine is a crook. Whats that say about Barry and Joe???
Report Post »MIBUGNU2
Posted on December 19, 2011 at 9:50pmWHOOOP’S, Bernie‘s gonna’ have some company..
Report Post »This whole Administration needs to go down with
this *******.. Bunch of lying thieves !!
Whirling Dervish
Posted on December 19, 2011 at 9:52pmIn jail with half of the wall street and half the politicians from both parties.
Report Post »Him not being in jail so far shows you how bad the cancerous corruption really is.
PelositheGreat
Posted on December 19, 2011 at 10:00pmlet him stay with Bernie Madoff. They were made for each other.
Report Post »13th Imam
Posted on December 19, 2011 at 10:27pmDuffy and Procajilo will be sleeping with the fishes. Corzine is one of Barry’s protected bundlers
Report Post »JQCitizen
Posted on December 19, 2011 at 10:32pmSouth Philly Boy:
That‘s assuming he doesn’t end up adrift, face-down in the Atlantic Ocean, Right?
Report Post »MIBUGNU2
Posted on December 19, 2011 at 10:36pmBummer said he was going to raise a Billion $$$, HMMM !!
Report Post »Corzine is a fundraiser for the Savior.. ??????????????
Hell, as much Money as Obama has pis**ed away since
he has been office, we could ALL be rich !! Good Gawd !!!
Salamander
Posted on December 19, 2011 at 11:03pmYes, a little Federal vacation!
Report Post »db321
Posted on December 20, 2011 at 12:28amI would rather they make a deal with him – I think there is a mighty big fish or two at the end of that line. I hear Soros made Billions off of MF Gobal and now he’s bailing them out – Just seems a little fishy to me.
Report Post »Bill in Texas
Posted on December 20, 2011 at 11:13am13th Imam
Report Post »Even a Godfathers closest confidant would be cut loose once they became a liability. He’ll probably die of a sudden heart attack once he agrees to name names. Barry or George will make this problem go away.
Ohello
Posted on December 20, 2011 at 12:25pmThe buck stops at the top Obama and Holder should go to jail for fast and furious, This one should add years to the sentence. Oh wait, both are not whites, and the justice department policy of not prosecuting non-whites is still in effect. I guess both go home without penalty.
Report Post »ZeroOff4impact
Posted on December 19, 2011 at 8:50pmDon’t drop the soap there cutie pie… Your BUSTED…
Report Post »teamarcheson
Posted on December 19, 2011 at 8:52pmIt means Corzin lied. Barney Madoff needs a cell mate to talk with about those good old days. Corzin and Madoff, perfect together.
Report Post »Detroit paperboy
Posted on December 20, 2011 at 12:47amhey john, does you wanna be the pappa, or does you wanna be the momma ???
Report Post »LoisLane1951
Posted on December 19, 2011 at 8:43pmCorzine‘s been promised he won’t go to prison. He’s lying. Obama’s getting the money.
Report Post »median
Posted on December 19, 2011 at 8:40pmEveryone should go on strike and shut the nation down until all the vermin that is ruining this nation is either hanged or put in prison!!Let’s get back to the original constitution.
Report Post »Darmok and Jalad at Tanagra
Posted on December 19, 2011 at 8:55pmYeah, we could all get our tents and go poop on cop cars. We are the 99%.
Report Post »Veritas Libertas
Posted on December 19, 2011 at 8:37pmIf the $1.2 billion simply disappeared and there’s no record, does that mean the government can not collect the taxes on any gains made?
Report Post »Bernice Durdan-Rowland
Posted on December 19, 2011 at 8:35pmHe was an Obama fund raiser – that tells it all !!!!! Obama has more corrupt people , corruption breeds corruption. Its disgusting to say the least – a bunch of phonys and professional liars !!!!
Report Post »Ephesians six thirteen stand
Posted on December 19, 2011 at 8:27pmYou can always tell when this bunch, that is, Obama’s circle of people are trying to cover something up because they start the sentence with, “Let me be clear”.
Report Post »kcinco
Posted on December 19, 2011 at 10:15pmAnd does anyone think that the department of justice will do anything? eric holder do anything other than protect the crooks who surround him and the president? Not bloody likely.
Report Post »MoreC02
Posted on December 19, 2011 at 8:17pm“CME Group has provided this information and the names of these individuals to the Department of Justice and the CFTC who are investigating these matters,” Duffy said.
D……………….O………………J??? Erik Holder???
Report Post »ddg7
Posted on December 19, 2011 at 8:16pmIf Corzine ever see‘s a jail cell you can bet he’ll have a good view of the tennis courts.
Report Post »lukerw
Posted on December 19, 2011 at 8:16pmI’ll bet… Corzine… was suckered… via… a Soros Plot!
Report Post »nobull14
Posted on December 19, 2011 at 8:13pmI sure hope that Corzine is heading for a nice Jail cell soon?
Report Post »nobull14
Posted on December 19, 2011 at 8:16pmI have not figured out why he has sign in the picture calling Honorable ?
Report Post »barber2
Posted on December 19, 2011 at 7:57pmHave they checked Corzine’s freezer? Democrats do like hard, cold cash…
Report Post »tranymike
Posted on December 19, 2011 at 7:53pmhand him over to the ows and flim it live.
Report Post »mwhaley
Posted on December 19, 2011 at 8:00pmHe is part of the OWS family. All these crooks are intertwined.
Report Post »donh2
Posted on December 19, 2011 at 7:51pmProcajlo deserves entry into the Witness Protection program …only the FBI is too corrupt to provide adequate safety.
Report Post »RedneckJim
Posted on December 19, 2011 at 7:50pmNorman Hsu, meet your new cell-mate, John Corzine.
Oh, you two know each other? I’m shocked!
Report Post »possom
Posted on December 19, 2011 at 7:48pmAll road‘s lead to the whitehouse nowaday’s especially when it come’s to missing money, fraud, waste, corruption and the outright theft of our taxe’s!
Report Post »betterthantv
Posted on December 19, 2011 at 7:46pmSome things never change. Just like Enron, we’ll hear about a “suicide” or “car accident” a year from now and everything will fade away.
Just remember IT”S ALL THE TEA PARTY’S fault! (sarcasm)
Report Post »just slap me
Posted on December 19, 2011 at 7:37pmHmmmm…..
Report Post »TOMMYSURIA
Posted on December 19, 2011 at 7:34pmNice picture, liar liar is all over your face… To bad there is no capital punishment for ponzi boys…
Report Post »Pocono_Oathkeeper
Posted on December 19, 2011 at 7:30pmCorzine is a thief like most democrats
Report Post »ModerationIsBest
Posted on December 19, 2011 at 7:20pmI’d like to see some actual JUSTICE dished out, and not JUST US against the average person. This guy is an obvious thief and he bankrupts everything he touches.
I never understand how we can have people in power, fail horribly at what they do, and then go teach the same thing at a university. Unless they’re teaching “what NOT to do” any university that hires abject failures should be shut down.
Report Post »Snowleopard {gallery of cat folks}
Posted on December 19, 2011 at 7:28pmJustice needs to be served for everyone; from Mr Obama on down.
Report Post »Scarab Sport
Posted on December 19, 2011 at 7:20pmBottom line-Corzine bears responsibility. He was the head of the corporation and should be held accountable. How can over one billion just disappear and he be clueless? He should be brought up on charges and if guilty pay big time out of his own pocket. Then, he should spend some long term quality time with bubba in the slammer. Time for Corzine to man up.
Report Post »lodgerat
Posted on December 19, 2011 at 8:44pmEven if he is convicted he’ll only get 5 years or less.
Report Post »Salamander
Posted on December 19, 2011 at 11:07pmYep! Then, he’ll get out and collect his reward for clamming up about where the money went! You can bet it is stashed away somewhere safe for his ‘retirement’!
Report Post »georgeisn6
Posted on December 19, 2011 at 7:19pmDemocrats are allways the smartest people in the world, untill the get caught with their little crab scratchers in the cooky jar, then they allways know nothing.
Report Post »JimmyP
Posted on December 19, 2011 at 10:38pmcrab scratchers?
Souinds good
Report Post »What is it?
LOJ
Posted on December 19, 2011 at 7:14pmCulture of Corruption, just like Michele Malkin said. Some of these politicians would sell their mothers to make a buck.
Report Post »338lapua
Posted on December 19, 2011 at 7:48pmSOME???
Report Post »Please, you are being far to kind.