Another Cockroach

Another futures brokerage is put on liquidation-only with a major shortfall – $200 million – in customer segregated funds. This seems only to have come to light because the company’s owner failed in a suicide attempt.

I guess the CFTC staff has the same porn-viewing penchant as the SEC staff. Or else maybe they are just asleep.

And while crime happens all the time, what is truly stunning is that as we reported previously, the CFTC gave the firm a clean bill of health in its January inspection of Peregrine Financial Group. That’s 6 months ago. The CFTC, as a reminder, was it regulator. The entity whose sole charge is to make sure that firms at least have real, not rehypothecated, cash in their segregated client bank accounts. PFG never did for the past two years. And somehow the CFTC missed this. MF Global was a warning shot, and the CFTC missed it entirely. And not only that but 2 months later it pronounced PFG clean.

Meanwhile the administration’s program to shield its prominent contributor and bundler, Jon Corzine, from any accountability in the $1.6 billion theft of customer funds at MF Global is going well. Attorney General Holder is sitting on the case, allowing the evidence to grow cold and the likelihood of successful prosecution (or any prosecution at all) shrivel up and blow away.

This administration has changed government and not in a good way, bringing Chicago-style corruption and cronyism to a whole new level.

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