Much like Fast and Furious, the failed Department of Energy loans, and Congressional insider trading accusations, the MF Global scandal is getting worse and worse with each passing day
“Investigators looking into the disappearance of customer funds during the implosion of MF Global last month are coming to the conclusion that the money is likely gone for good,” sources with direct knowledge of the matter told the FOX Business Network.
And while many analysts are confident that the money is gone for good, nobody is currently aware of just how much is missing.
However, this may change Friday, when bankruptcy trustee James Giddens gives his updated report on the missing funds.
But before MF Global customers learn just how much cash is missing from Giddens' report, the House Agriculture Committee is scheduled on Thursday to hear testimony from several MF Global witnesses.
As reported earlier on The Blaze, one of the witnesses called to give testimony is none other than MF Global’s former chief executive and former New Jersey governor, senator, and Obama fundraiser Jon Corzine who was subpoenaed earlier this month.
“It was Corzine who changed MF Global’s business model from a simple brokerage firm of commodities to a risk-taking outfit not unlike a hedge fund that ultimately led to its sudden downfall last month,” reports FOX Business
It’s been predicted that when he goes before the committee, Corzine will plead the fifth. However, people close to Corzine disagree with this prediction and maintain that he will testify, but keep his testimony to the bare minimum.
“It’s just too embarrassing for a former U.S. Senator and someone close to the president to take the Fifth,” said one person who knows Corzine.
Undoubtedly, the missing funds will be the focal point of the hearings. One can only imagine what we will learn Thursday if Corzine does in fact decide to testify.
“Meanwhile, Giddens, the bankruptcy trustee for the brokerage firm, is preparing to meet a request from judge Martin Glenn, who is overseeing the case, on disclosing an update on the amount of money still missing,” reports FOX Business. “While the bankruptcy hearing won’t contain the same drama as Thursday’s Congressional hearing, for customers of MF Global its importance looms large.”
Currently, as much as $1.2 billion of customer money is feared missing. Many analysts believe that it disappeared when MF Global executives mixed customer funds with those used to run MF Global’s operations. Needless to say, this is highly illegal and against SEC regulations.
What’s worse is that investigators believe that even if the missing funds are recovered, they can't be returned to investors when the investigation is complete, according to people with direct knowledge of the matter.
If investigators recover the lost funds, they won’t be able to return them to customers? How does that work?
Here’s the disturbing reality of the situation: even if the missing funds are located and it turns out they were used to pay off legitimate claims of creditors, those creditors are still legally entitled to the money.