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Missing MF Global customer money ended up with JPMorgan, NYTimes says
E-Mail Clues in Tracking MF Global Client Funds
By Ben Protess and Azam Ahmed
The New York Times
Tuesday, December 20, 2011
http://dealbook.nytimes.com/2011/12/20/e-mail-clues-in-tracking-mf-globa...
Federal authorities investigating the collapse of MF Global have uncovered e-mails that detail the transfers of money in the firm's last days, including transfers that contained customer money, according to people close to the investigation.
One e-mail chain refers to the transfer of roughly $200 million that MF Global owed JPMorgan Chase on Oct. 28 -- the firm's last business day before it filed for bankruptcy. In that chain, a senior official in the firm's Chicago office was told to make the transfer, said the people close to the investigation who requested anonymity because the inquiry was still open.
That official, Edith O'Brien, a treasurer at MF Global, is considered a "person of interest" in the investigation, said two of the people, who added that authorities expected to interview her in the coming days. It was not clear who had directed Ms. O'Brien, whose job was to oversee the customer money, to make the Oct. 28 transfer. The roughly $200 million that JPMorgan Chase received is said to be entirely customer money.
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Prophecy Drills 384.9 Meters Grading 0.623 g/t PGM+Au,
0.3% Ni, 0.15% Cu (0.45% NiEq) From Surface At Yukon Wellgreen Project
Company Press Release
Thursday, December 8, 2011
VANCOUVER, British Columbia -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) has announced the final drill results from 2011 drilling at the company's fully owned Wellgreen platinum group metals, nickel, and copper project in the Yukon Territory.
Borehole WS11-192 intercepted 384.9 meters of 0.45 percent nickel equivalent starting from 9.45 meters depth. Included in this greater interval of continuous mineralization is a platinum group metals-rich zone with a combined platinum-palladium-gold grade of 1.358 grams per ton over 19.23 meters (nickel equivalent 0.74%).
The final drilling results for 2011 have shown the Wellgreen Central-East and Central-West deposits to be one contiguous body, whereby there is good potential to broaden significantly the Central-West resource base, which currently contributes only about a quarter of the current 43-101 compliant resource at Wellgreen. Overall the drilling program met with good success in expanding the resource to the east and south. The long drill intercepts suggest the deposit remains very much open in those directions.
For the complete drilling results and the full company statement, please visit:
http://prophecyplat.com/news_2011_dec08_prophecy_platinum_wellgreen_dril...
Ms. O'Brien has hired a prominent criminal defense lawyer, Reid H. Weingarten of Steptoe & Johnson, according to one of the people. Ms. O'Brien has not been accused of any wrongdoing. And there is no indication that she had reason to suspect that the money being transferred included customer money.
MF Global's sloppy recordkeeping and a flurry of transactions in its final days may have obscured that the firm was dipping into the cash of farmers, traders, and hedge funds to cover its own needs.
Still, the interest in Ms. O'Brien and the e-mails suggest that, nearly two months after some $1 billion in customer money went missing, investigators have identified employees who may have played an important and perhaps unwitting role in the improper use of customer money.
Ms. O'Brien could not be reached for comment. Mr. Weingarten did not respond to several requests for comment. A spokesman for the Commodity Futures Trading Commission, which is leading the investigation, declined to comment.
Mr. Weingarten, a former Justice Department official, has also represented Bernard J. Ebbers, the former chief executive of WorldCom, and other top corporate executives. Lloyd C. Blankfein, the chief executive of Goldman Sachs, hired Mr. Weingarten this year.
The transfer to JPMorgan was not the only questionable one. Investigators suspect that later on Oct. 28, MF Global continued using customer money to settle payments with trading partners and others, leading to the roughly $1 billion hole in customer cash.
Regulators have spent nearly two months hunting for the missing money. Angry customers, who have yet to receive roughly a third of their money, have taken their grievances to Washington. Jon S. Corzine, the company's former chief executive, has testified on Capitol Hill three times this month about the firm's collapse.
Mr. Corzine, a former United States senator and New Jersey governor, testified that on the morning of Oct. 28, JPMorgan told him that one of the firm's accounts at the bank in London was overdrawn. He said he passed the notice along to his staff.
"At that time, I was trying to sell billions of dollars of securities to JPMorgan Chase in order to reduce our balance sheet and generate liquidity," Mr. Corzine told lawmakers. "JPMorgan Chase told me that they would not engage in those transactions until overdrafts in London were cleaned up."
After the transfer, JPMorgan, one of MF Global's main banks, questioned Mr. Corzine about the source of the money.
"Since I had no personal knowledge of the issue, I asked senior people in the back office and the legal department to become directly involved in responding to JPMorgan Chase's request," he told the House Financial Services Subcommittee on Oversight and Investigations.
Mr. Corzine testified that Ms. O'Brien assuaged any concerns that MF Global had been improperly using customer cash.
"I had explicit statements that we were using proper funds, both orally and in writing, to the best of my knowledge," he told the panel. "The woman I spoke to was a Ms. Edith O'Brien."
But JPMorgan was not satisfied. The bank once again contacted Mr. Corzine, this time requesting a guarantee in writing. Mr. Corzine handed the request to his general counsel, Laurie Ferber. Ms. Ferber would not authorize the document, according to one of the people close to the investigation, saying the firm did not offer such special assurances.
Two days later, at about 6 p.m. on Sunday, Oct. 30, Ms. Ferber notified regulators that there was an apparent shortfall in customer money. She blamed an accounting error, according to the CME Group, the firm's primary regulator and an exchange where it conducted business.
At about 1 a.m., Ms. O'Brien and another executive in Chicago told the exchange that the shortfall in the customer accounts was real, according to the CME.
Ms. O'Brien is considered an expert of sorts on the protection of customer money at futures firms.
In the last year and a half, Ms. O'Brien has made several appearances before the Commodity Futures Trading Commission. On at least two occasions, she was a panelist at roundtable discussions held at the agency on the topic of safeguarding customer money, and attended at least three meetings with agency officials, including one titled "Practicalities of Individual Customer Protection."
Since MF Global's collapse, Ms. O'Brien has been working for the trustee overseeing the liquidation of the firm's brokerage unit, helping lawyers and accountants understand the firm's operations.
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Sona Discovers Potential High-Grade Gold Mineralization
at Blackdome in British Columbia -- 13.6g over 1.5 Meters
From a Company Press Release
November 22, 2011
VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling.
"We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company."
Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered.
For the company's complete press release, please visit:
http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf
