Did MF Global Help Koch Brothers Withdraw Their Money Before Collapse?

[stockholmer]

http://www.huffingtonpost.com/daniel-dicker/the-koch-brothers-and-mf-_b_1089906.html

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But perhaps the most stunning piece of news we’re getting in the wake of the MF Global collapse is in the clients of the firm who managed to get away scot-free, with no freezing of accounts or capital — particularly the accounts of the mega-cap independent oil company Koch Industries, run by the politically active Koch brothers.

A recent report in Reuters http://www.reuters.com/article/2011/11/11/us-mfglobal-clawback-f-idUSTRE7AA38A20111111 has described the billions of dollars of client accounts that were withdrawn from MF Global in the last few weeks before their collapse, including 8 accounts from Koch industries engaged in oil trade that were transferred to Mizuho Securities after years of a steady and profitable relationship with MF. The Reuters piece concentrates on the possibilities of legal “clawback” of client money if the bankruptcy does not allow remaining client accounts to be made whole.

The Reuters piece misses the point.

Both the Commodity Futures Trading Commission and the Chicago Mercantile Exchange were charged with overseeing MF Global, their clearing member. If we are to believe them, they had no idea of any difficulties within the firm before customer accounts went missing just a few days before the collapse. But someone clearly knew of the cratering positions and imminent collapse of MF Global, as billions of dollars of accounts were “coincidentally” withdrawn. And what do the Koch brothers say was the reason for these withdrawals? There’s been no comment.

For those still battling the excesses of 2008 and those occupying Wall Street, this has been another proof of the inside, “fixed” operation of the financial markets. When banks go wrong, betting big with other people’s money and losing, they can be sure of a bailout that guarantees their bonuses and businesses. And when firms are tailspinning to disaster, the richest and most financially influential partners are sure to get a phone call — a “heads-up” – to save their assets and leave regular people with the mess.


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[Wilms]

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