MF Global and the great Wall St re-hypothecation scandal Christopher Elias http://newsandinsight.thomsonreuters.com/Securities/Insight/2011/12_-_December/MF_Global_and_the_great_Wall_St_re-hypothecation_scandal/
(EXCERPT FROM Business Law Currents) "A legal loophole in international brokerage regulations means that few, if any, clients of MF Global are likely to get their money back. Although details of the drama are still unfolding, it appears that MF Global and some of its Wall Street counterparts have been actively and aggressively circumventing U.S. securities rules at the expense (quite literally) of their clients.
MF Global's bankruptcy revelations concerning missing client money suggest that funds were not inadvertently misplaced or gobbled up in MF’s dying hours, but were instead appropriated as part of a mass Wall St manipulation of brokerage rules that allowed for the wholesale acquisition and sale of client funds through re-hypothecation.
A loophole appears to have allowed MF Global, and many others, to use its own clients’ funds to finance an enormous $6.2 billion Eurozone repo bet.
If anyone thought that you couldn’t have your cake and eat it too in the world of finance, MF Global shows how you can have your cake, eat it, eat someone else’s cake and then let your clients pick up the bill. Hard cheese for many as their dough goes missing...."
MAJIA HERE: MF Global was playing with its clients' money, unbeknownst to them. The missing money amounts to approximately $1.2 billion. Yesterday, The Wall Street Journal ran a story about all of the farmers who had invested with MF Global.
WSJ: "MF Global Collapse Felt in Farm Country: Hedging Positions Caught Up in Firm's Bankruptcy Filing" by J. DiColo p. C1,
The article explains that in order to secure loans and stabilize income, most farmers purchase futures contracts. Futures enable farmers to predict with some degree of certainty the price at which they will sell their crops. Farmers who had contracts with MF Global are not clear whether or not they will be "made whole."