MF Global Hid Debt From Investors

While Corzine lobbied, successfully, to curb financial regulation
By Kevin Spak,  Newser Staff
Posted Nov 4, 2011 8:20 AM CDT
MF Global Hid Debt From Investors
Jon Corzine did all of MF Global's lobbying himself, using his clout as an ex-senator, ex-governor, and ex-Goldman Sachs chief to fight financial regulations.   (AP Photo/Mel Evans, File)

MF Global appears to have spent the past two years hiding its debt risk from investors by temporarily slashing debt right before issuing its quarterly reports, in a shady-but-legal process known as “window dressing,” the Wall Street Journal reports. The company insists borrowing fluctuated due to “client facilitation activities,” but one accounting professor scoffed at that. “Every quarter, for seven quarters in a row, it’s always lower,” he said. “I’m left to wonder why client needs are always reduced at the end of the quarter.”

Other recent revelations include:

  • CEO Jon Corzine personally lobbied against new regulations limiting how futures-trading firms could invest customer cash, using his clout as an ex-senator and governor to successfully quash the proposals, the New York Times reports—which looks fairly bad given that his firm is now under investigation over $630 million in missing client funds.
  • MF Global seems to have been the investment of choice for Ponzi schemers—it has faced two lawsuits seeking to recover purloined funds invested in the firm by two different convicted fraudsters, USA Today reports.
(More MF Global stories.)

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