You are here
Wall Street Journal: Where was the CFTC?
From The Wall Street Journal
Thursday, November 4, 2011
http://online.wsj.com/article/SB1000142405297020439480457701222082986529...
How are the regulators going to explain this one?
MF Global, the failed firm whose chairman and CEO is Jon Corzine, has already destroyed the wealth of its investors and roiled the banking world. But now we are learning that it may have lost customer funds as well.
A major Wall Street broker in derivatives markets with $41 billion in assets, MF Global filed for bankruptcy on Monday after Mr. Corzine made disastrous bets on bonds issued by European governments. It initially appeared he was (only) gambling with his firm's own capital, but a federal official tells the Journal that MF Global has admitted diverting money out of customer accounts, which may be a violation of federal law.
... Dispatch continues below ...
For Continuous Wealth Creation, the Hera Research Newsletter
The life cycles of companies that produce natural resources allow investors to allocate assets among companies at different stages of development and to profit from transitions between stages.
Based on natural resource company life cycles, the Hera Research Newsletter maximizes profits through deep, fundamental analysis at each stage of development and by moving gains back to earlier-stage companies in a continuous wealth-creation process.
Hera Research covers a pipeline of high-quality natural resource companies at different stages of development. The companies span discovery and production of gold, silver, and platinum group metals, select base metals, oil and gas, green energy, agriculture, rare earth elements, uranium, and more.
Discover the unique value of the Hera Research Newsletter by visiting:
http://www.heraresearch.com/newsletter.html
Or call Ron Hera at 360-339-8541x101.
This follows a report from futures exchange operator CME that MF Global was not complying with federal rules on segregating client funds. In bankruptcy court yesterday an MF lawyer said, "To the best knowledge of management, there is no shortfall" in customer accounts. But the Journal reported late yesterday that the FBI is investigating the matter.
If reports of missing funds are true, it's a significant embarrassment for the firm's regulators at the Commodity Futures Trading Commission. CFTC Chairman Gary Gensler has been leading the Beltway chorus for years in reciting the (false) story that the absence of regulation allowed AIG and its credit-default swaps to wreak havoc in 2008.
Never mind that the Treasury Department's Office of Thrift Supervision did regulate AIG, and that an OTS official testified before Congress that the agency signed off on the swaps because it didn't expect Armageddon in the housing market. Mr. Gensler nonetheless succeeded in gaining for himself and his agency broad new powers over the derivatives market as part of Dodd-Frank in 2010.
The MF Global case involves business that was unambiguously regulated by the CFTC long before Mr. Gensler built his new regulatory empire. In fact, the alleged MF Global failure goes to the basic regulatory blocking and tackling that the CFTC is supposed to perform, which includes ensuring that companies aren't raiding customer funds for their own trading.
It is also no small irony that MF Global was among the cheerleaders for Mr. Gensler's plans for new clearing arrangements under Dodd-Frank. Maybe if the regulators hadn't been so busy writing new rules, they would have checked if MF Global was following the old ones.
It was always fanciful to believe that the regulators who failed to prevent the last financial meltdown would somehow prevent the next one. The surprise is that this mirage of regulatory competence has been exposed so quickly.
* * *
Support GATA by purchasing gold and silver commemorative coins:
https://www.amsterdamgold.eu/gata/index.asp?BiD=12
Or by purchasing a colorful GATA T-shirt:
Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:
http://gata.org/node/wallstreetjournal
Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:
Help keep GATA going
GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:
To contribute to GATA, please visit:
Golden Phoenix Signs Definitive Agreement to Acquire and Reopen Santa Rosa Gold Mine in Panama
Company Press Release
Monday, September 19, 2011
SPARKS, Nevada -- Golden Phoenix Minerals Inc. (OTC Bulletin Board: GPXM) has signed a definitive agreement to acquire a 60 percent interest, with an option to buy an additional 20 percent interest, in the Santa Rosa gold mine in Panama, now owned by Silver Global S.A., a Panamanian corporation.
Santa Rosa produced more than 100,000 ounces of gold from 1996 to 1998 before being closed in part to low gold prices, which are now more than five times higher.
Golden Phoenix intends to acquire its initial 60 percent interest in Santa Rosa by acquiring 60 percent of the share capital of a recently created company under the name Golden Phoenix Panama S.A., formed to hold and operate the mine.
Tom Klein, CEO of Golden Phoenix says: "The agreement establishes a solid framework from which we can advance Mina Santa Rosa to production-ready status."
For Golden Phoenix's complete statement, please visit:
http://goldenphoenix.us/press-release/golden-phoenix-signs-definitive-ac...
