EIC/Wall Street investigations
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Dec 2, 2011
via Unstructured Finance

The curious Mr. Kotz and the SEC

By Matthew Goldstein

If we’ve learned nothing from the financial crisis, it’s that we need smart regulators to be minding the store. And we need someone to make sure the regulators are up to that job and not shirking their responsibilities.

So it was a breath of fresh air when David Kotz assumed the role of inspector general of the Securities and Exchange Commission in 2007.

Nov 27, 2011
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MF Global a month later and still a mystery

By Matthew Goldstein

It’s been about a month since MF Global began spiraling towards bankruptcy and still there’s no clarity about what happened to the missing customer money that was supposed to be kept in untouchable, segregated accounts. It’s not even clear how much money is missing.

When the Jon Corzine-led firm filed for bankruptcy on Halloween, it was believed some $900 million in customer money couldn’t be accounted for in MF Global’s segregated accounts maintained at Harris Banks and other institutions. That sum was quickly revised downward to about $600 million. And the number remained at $600 million until the court-appointed liquidation trustee surprised everyone last week by saying more than $1.2 billion in customer money might be missing.

Nov 19, 2011
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Tyrone Gilliams keeps going and going despite charges

By Matthew Goldstein

It’s been an eventful month for hip-hop promoter and commodities trader Tyrone Gilliams, the man federal authorities allege defrauded investors out of at least $5 million.

The self-styled Philadelphia philanthropist was indicted by federal prosecutors on securities fraud charges on Nov. 14 after being arrested on criminal complaint in October. The Securities and Exchange Commission this week also filed civil fraud charges against the 44-year-old former University of Pennsylvania graduate and college star basketball player.

Nov 18, 2011
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At the intersection of Wall and Main

By Jennifer Ablan and Matthew Goldstein

Whether you agree with it or not, the Occupy Wall Street protests that began two months ago in New York have ignited a debate over income inequality and the political clout of the nation’s banks.

Before the protesters began camping out in Zuccotti Park in lower Manhattan, much of the conversation had  focused on the federal government’s debt and not the equally big debt run-up by U.S. consumers in the years before the financial crisis. Now it seems you can’t go a day without reading a story about the vast gulf between rich and poor and the shrinking middle class, or how the housing crisis won’t get fixed until something is done to alleviate the burden for millions of homeowners who are underwater on their mortgages.

Nov 18, 2011

Why Wall Street still doesn’t get it

NEW YORK (Reuters) – It was a telling moment at the height of the Occupy Wall Street protests.

John Paulson, the hedge-fund trader who famously made billions betting on the collapse of the housing market, was threatened by the demonstrators with a march on his Upper East Side home in New York last month. Paulson responded by putting out a press release that described his $28 billion, 120-person fund as an exemplar of the American Dream: “Instead of vilifying our most successful businesses, we should be supporting them and encouraging them to remain in New York City.”

Nov 18, 2011

Insight: Why Wall Street still doesn’t get it

NEW YORK (Reuters) – It was a telling moment at the height of the Occupy Wall Street protests.

John Paulson, the hedge-fund trader who famously made billions betting on the collapse of the housing market, was threatened by the demonstrators with a march on his Upper East Side home in New York last month. Paulson responded by putting out a press release that described his $28 billion, 120-person fund as an exemplar of the American Dream: “Instead of vilifying our most successful businesses, we should be supporting them and encouraging them to remain in New York City.”

Nov 15, 2011

Harris Bank subpoenaed, workers sue over MF Global

By Matthew Goldstein and Jonathan Stempel

(Reuters) – Fallout from MF Global Holdings Ltd’s bankruptcy intensified as a U.S. regulator subpoenaed a bank that held some of its customers’ money, while some of the 1,066 workers fired from the futures brokerage last week filed three lawsuits over their sudden dismissals.

The U.S. Commodity Futures Trading Commission within the last week issued a subpoena to Bank of Montreal’s Harris Bank unit, seeking information about customer accounts at MF Global, two people familiar with the situation said.

Nov 10, 2011

MF Global executives hire lawyers as inquiry grows

NEW YORK (Reuters) – The federal investigation into the collapse of MF Global is ramping up with several more executives, including a long-time colleague of former CEO Jon Corzine, hiring criminal defense attorneys.

Executives at the failed futures brokerage house are in the process of hiring lawyers as a federal grand jury in New York recently began issuing subpoenas seeking information and records, say people familiar with the inquiries.

Nov 8, 2011

Chicago’s Harris Bank plays role in MF Global mess

By Matthew Goldstein, Lauren Tara LaCapra, David Henry and Jennifer Ablan

(Reuters) – The hunt for the missing $600 million in customer money at MF Global Holdings Ltd (MFGLQ.PK: Quote, Profile, Research, Stock Buzz) may begin with Harris Bank, a Chicago-based lender that often holds client money for many large futures brokerage firms.

A Harris Bank branch office in downtown Chicago was the main repository for money from many of MF Global’s 150,000 customers, according to customers and representatives with smaller investment firms that introduced clients to the New York-based brokerage.

Nov 5, 2011
via Unstructured Finance

MF Global and the rubber check

By Matthew Goldstein

With the mystery of the missing $600 million in customer funds at MF Global Financial still unresolved, a lot of customers of the failed futures firm are starting to complain about getting bounced checks.

It appears that 10 days ago, with speculation swirling that the Jon Corzine-led firm would soon file for bankruptcy, a good number of customers started to put in requests to pull their money from the New York-based outfit. But instead of simply wiring that money back to their customers, it seems MF Global tried to buy some time for itself by sending that money back via snail mail in the form of an old-fashioned check.