frozen in this m.f. global account and he says now that he's thinking about closing his three other brokerage accounts because he said quote i'm a high net worth person and i don't want to see a million dollars get smoked by another misunderstanding this is the thing about the high end the top one percent now they're getting their accounts a blitter rated by the same terrorists because there's nothing there's no barrier between them and the money that they're supposed to be the custodian of they're just completely stealing out of people's accounts now now this guy ted mon cher that they talked to he said he thought the securities investor protection corporation he thought it covered any losses due to a meltdown such as that m.f. global he's now been told sipek may not cover the money because it wasn't a futures account and faces months of uncertainty as he files a claim seeking recoveries but over the past ten fifteen years all these groups like said baker as c c or f d c are all been undermined by new regulati

well speaking of m.f. global i have quite a few stories on that but first we're going to turn to a video here and this is bill fleckenstein and he's being interviewed on c n b c and he's asked by the presenter whether or not he thinks he'll see his money back i do think there's some possibility that the money will show up because it occurs to me if in fact funds are misappropriated that would have had to be several people involved with that and i'm surprised if that were the case someone else tried to climb into that hasn't occurred it might just be the sheer volume of people heading for the exits combined with. them could have resulted in this. hundred million that. well i don't know if like and dimed stain is a bimbo or he's desperately trying to talk his way into getting his money back or both this is kind of interesting that professionals who've written books you know bill's written a book about corruption in the banking sector and when it happens to them whether it's bill fleckenstein or gerald salon today o

m.f. global's missing seven hundred million dollars so m.f. global is a futures broker headed by john kors sign the former head of goldman sachs who then went on to be the governor of new jersey and was in line to replace timothy geithner at treasury now remember timothy geithner also committed a crime by failing to pay his taxes because he it was an accounting error he forgot for ten years and then went on to head the i.r.s. so who knows what will happen to john course sign but apparently m.f. global commingled. it's accounts yeah this is one of the worst things you can do is take your customer's money and just slap in the fund with everyone else's money or even your own money and then when you again have losses them somehow only the customer experiences those losses but when you have gains you take all the gains so instead of just people called socializing the losses and capitalizing on the gains but it's beyond that it's just outright co-mingling of funds putting a gun to people's heads and stealing their money i mean this is we're getting t

morgan bank of america creditors to m.f. global are saying their claims come ahead of the customers is that it is not proper you know when you're involved in this sort of bankruptcy litigation everybody says that sort of stuff i think that there's some insurance on the accounts and there's some guarantees but if it turns out that the creditors have a superior claim to people who are opening accounts why the hell would i ever open an account with anyone again mattress sales are going to take up because that's going to become the new banks it's unthinkable that somehow an outside credal or is going to have a superior claim to. somebody who actually had their money with a brokerage firm in this case it's a combination of s.b.c. and commodities futures regulators who are supposed to be watching this look at the key takeaway from all of this is regulators can only do so much if someone is intent on stealing they're going to steal what you have to do as a regulator or a government is make sure that when these people get caught they're th

the collapse of m.f. global, the 200-year-old trading firm led by former new jersey governor john corzine has been severe and sudden. >> reporter: as bankruptcy hearings for m.f. global began in this new york courthouse today, federal investigators said hundreds of millions of dollars of customer money is missing and they're looking into whether it was improperly used in last-ditch trades to prop up the company. if mfrplt. f. global tried to use customer money to save the company, how serious is that? >> a very serious charge if it's more than just a minor amount. >> reporter: sean egan is found jer of the egan jones ratings agency, one of the first to flag the company's troubles. >> they took major bets on some dicey assets and lost those bets. >> reporter: jon corzine took over m.f. global last year and the former c.e.o. of wall street powerhouse goldman sachs quickly took a major gamble on european debt. how significant was m.f. global's investment in troubled european debt? >> it was massive, it was $6.3 bil

m.f. global's investment in troubled european debt? >> it was massive, it was $6.3 billion. >> reporter: that $6.3 billion was invested in the debt of ,taly, spain, portugal, and ireland. considertries now considered in severe economic trouble. what's more, egan's agency calculates that m.f. global was leveraged at a rate of 40-1. that means for every dollar of equity it had, it held nearly $40 of debt. >> whi >> which is an incredibly high level to put in perspective lehman brothers had leverage of about 30-1 or 33-1. o> reporter: at the bankruptcy laaring today, attorneys for m.f. global claimed all monies have been accounted for, but federal officials say they're still looking for hundreds of millions of dollars. m.f. global's biggest client, jortt, include major financial ight becau fidelity and t.i.a.a. creft. >> reporter: anthony, thank you very much. the greek government is in e toardy tonight because the prime minister surprised veryone when he said the muropean deal to rescue greece aff. it own debts would have to be put befor

so with that she says although m.f. global j.p. morgan one point two billion as an unsecured creditor clients of m.f. global whose funds are still missing should not have to beg j.p. morgan for relief were simply asserting that if m.f. global commingled funds from customer accounts or cannot properly account for them k.p. morgan can't lay claim to those funds and so if they were their own says one investor in m.f. global like j.p. morgan is balance she is severely impaired a lot of smart money is sure j.p. morgan you know my guess is that jim rogers who said he is short of big money bank is doing give the name i'll just guess that is j.p. morgan he can comment on that if he wishes but i think the smart money is massively short j.p. morgan stock because this stock if you mark to market anything and everything is worth less. than zero but it's a theme here i'm really focused on max is that we've been focusing on is that the millionaires one hundred million or so if you make one of these hedge fund guys think oh i make two hundred mil

a key regulator says m.f. global made "substantial" transfers of customer money after an audit last week, and before the firm filed for bankruptcy. today's developments come as investors try to understand how a respected firm like m.f. global went wrong and what its collapse means for the american financial sector. suzanne pratt reports. >> susie: on wall street, sometimes perception is just as dangerous as reality. recently that's been true for the financial sector, where perception has grown that europe's debt woes will cause problems for u.s. that perception is partly why financial stocks have not had a good year. this financial e.t.f. is down nearly 20% since january, and it looks like investors were right to worry. m.f. global is the first u.s. victim of the europe's debt mess. the question is, will it be the last? banking analyst fred cannon says probably not. >> there certainly are other financials out there that have made large bets. you know, hopefully they're hedge funds and the size of m.f. or smaller who

morgan and bank of america is m.f. global commingled segregated funds with corporate assets it was a criminal act paying such a creditors claim with a portion of those commingled funds would make them a beneficiary of that crime and that's right this is a remarkable development in the recent history of bank pilfering of wealth from common people we are now just reaching into segregated accounts from solved and confiscating wealth directly going out using credit default swaps they're not using the r. kenia of derivatives anymore they're not the skies in their actions they're just stealing money directly from the accounts you open your account is like oh less money why because these banks stole it this is a new level of insidiousness so tight on management goes on to say that's the trustee involved in this is the same trustee the same lawyers that manage the bankruptcy of lehman brothers. they themselves received one hundred sixty million dollars for handling the bankruptcy of lehman creditors got nothing ok so this capital man

collapse presenting the first m.f. global casualty yes max has borne hard capital management and they ceased operations and in their matter to clients they say the reason for the decision to pull the plug was excruciating lee simple i could no longer tell my clients that their money's impositions were safe in the futures and options markets because they are not the entire system has been utterly destroyed by the m.f. global collapse he goes on to say what was the surprise was the reaction of the exchanges and regulators their reaction has been to take a bad situation and make it orders of magnitude worse specifically they froze customers out of their counts while the markets continued to trade refusing even allow them to liquidate oh it's not unprecedented on the branch level as i've been explaining the individual branches of brokerages with the compliance officer and the trader within eyeball distance of each other there's a tremendous amount of fraud that goes on this is more of an institutionalized fraud where the regulato