missing, and former m.f. global c.e.o. jon corzine has testified he doesn't know where the money went. more than 250 m.f. customers have teamed up to get their money back, and they're hoping congress can uncover the smoking gun. diane eastabrook reports. >> reporter: for the past six months, the m.f. global scandal has consumed john roe's life. the veteran trader founded the commodity customer coalition last fall to help m.f. global customers like himself recover their missing money. roe hopes tomorrow's hearing before the house financial services committee will determine if m.f. global committed fraud. >> what we want to do is we want to establish that there was either general criminal intent or there was intent after the fact, that someone did something and then covered it up because they knew they had committed a crime or broken a rule. >> reporter: an email suggests former c.e.o. john corzine directed some customer money into a company account at j.p. morgan chase to cover a shortfall. at the time, j.p. morgan asked for

morgan as much of a story here as m.f. global and how so well it's a fascinating angle that's for certain a j.p. morgan had a number of conflicted rules that were could still be and. cleared and settled the trades so they want to position it pretty much see everything that was going on and probably better than us in the futures industry and in the futures industry there was significant talk about what was going on and what transpired that week before the bankruptcy that is not being made transparent to us and what is that and what role do you think it can morgan has and well from what you well there are a number of angles that i think j.p. morgan is interested in for one they received a significant wire transfer but we haven't discussed is j.p. morgan's role in the bankruptcy process you know they essentially have a significant role in selecting the creditors bankruptcy trustee who my sources tell me is given the task of investigating fraud but remember there's no fraud in m.f. global we don't talk about fraud that's the unmentio

m.f. global's and on what's to be uncovered with m.f. global is much larger than what's already been uncovered so in my opinion based on what i have seen and this is subjective it's really a j.p. morgan story but remember in lehman brothers j.p. morgan essentially took seven billion dollars out of the carcass of lehman brothers that was lehman brothers what j.p. morgan is now doing is taking money from farmers and retirees so here's my question to you if they're going to be able to take money from farmers and retirees whose next is a bank account knocks can they do this to individual savers with a checking account you know could they flip the rules around so they also want someone one day could wake up and boom the money out of their checking account is gone i don't know just asking some questions where's the national outrage because if you look at a group like occupy wall street protests remained pretty much silence about this m.f. global collapse they don't see the connection what what what what why is it just because they're illiterate

yesterday the m.f. global collapse took center stage on capitol hill as the threat of crony capitalism and the sanctity of customer money in u.s. markets really remains in the balance and as the unprecedented unprecedented ok disappearance loss. whatever you choose to call it of customer money one point six billion dollars the money had in segregated accounts supposed to be protected remains unexplained unaccounted for and as m.f. global executives yesterday the legal counsel c. oppose assistant treasurer came to answer eagerly anticipated questions eagerly anticipated issues what did they reveal you intend to invoke your fifth amendment as to any question that disappeared you only subjects to the ira i was not aware of that transfer before it was made. but i was away for the majority of that week and i apologize in advance if i'm unable to add a great deal of detail will survive responsibility was to oversee the global finance function i was not responsible for and i know you weren't responsible for a rigid s

regulations will not stop firms from going the way of m.f. global as long as they can go to the u.k. to take on virtually on limited leverage help tell us how m.f. global was getting around u.s. leverage limits this way similar to a idea in two thousand and eight and why it's going on unchanged and double reserve chief ben bernanke he gave his economic checkup to lawmakers today which meant to reacquaint is with republican presidential hopeful ron paul. something that i think would be a compromise that we could work along those reviews. but first of all good to see you again because most of. it's always entertaining while in europe eight hundred banks hit the e.c.b. for liquidity the longer term refinancing operation for five hundred thirty billion euro will fill you in on the easy money makers of the central banking regime meanwhile bank of america find yet another way to cash in on taxpayers and j.p. morgan c.e.o. jamie diamond find yet another way to cash in on attention as a drama queen or king i guess soundings gets a friend on regulation wall

but yes the m.f. global scandal is a high watermark in the malfeasance going on in the wall street led economy more wealth was simply stolen from customers right out of their accounts but you know the economy rebounding as such. by definition a poll only of those people that survived the last. the last financial hole a cost that wiped out millions those people aren't counted anymore they're considered to have been you know wiped off the system of the remaining group that's there then they say well all of this wealth that we stole those people are now wealthier and therefore the economy is growing and some people are feeling positive because they only had ten percent still and in the example of m.f. global banks with inside track take advantage of m.f. global mystery so this is from francine mccann and she says five months on from the m.f. global collapse we know less now than we did when they declared bankruptcy there's one thing we know for sure however and that is some banks must know where the missing cus

all right welcome back we're talking about m.f. global and we're looking into a nother player in this case which is the trustee or the trustee so i mentioned earlier that and this was something we reported on prior to this the wall street journal had reported that louis freeh said that he wanted to pay out bonuses possibly to m.f. global exacts well now the senate agriculture committee sent him a letter opposing the bonuses he said this it is they said that excuse me it's difficult to understand why you would even consider pay anyone a bonus while nearly one point six billion dollars in customer money is still missing and it is absolutely outrageous to propose paying bonuses to the very people who were responsible for the operational legal and financial management at the time that the customer money disappeared mark i want to bring you back in this is mark maleng host of uncorrelated investing show a veteran futures commodities industry how significant is it that they wrote him this letter well i think it sends a much deeper message it se

m.f. global's european administrator k.p.n. g.e. now expects litigation to deny payouts to clients or to delay payouts to clients after the landmark ruling and the bankruptcy of lehman brothers so in this ruling britain's supreme court said that lehman's clients whose cash the u.s. investment bank had mixed with its own have the same rights as clients whose cash was segregated into a segregated account so this means effectively for m.f. global that if your money was in a segregated account you have exactly the same right to claim it as if you didn't this just blows my mind and gerald celente who was once on our show telling us that his money was frozen in a segregated account as a result of this whole m.f. global debacle he said it was to the tune of six figures i want to bring him back in and just follow up with that notion of what we're talking about before the break because just on a personal level do you think you're going to get your money back and how does that make you feel. oh it's wonderful i love lou i love my body being s

does this make the case for m.f. global customers more difficult and does everybody need to be looking at the fine print of whoever they have an account with to make sure their money's not being moved in rehab propagated over and over again. quite frankly it's my belief that even if there are losses stemming from. us in the value of securities due to read about occasion that should not impact customers rights of recovery especially in this case for monies that were transferred to j.p. morgan chase the more it was the custodian of clients. they were also the primary lender global and they were clearing and settling the trades. you know how straight an operation because of this they had a lot of insight into the activities going on there and when they received. you know several hundred million dollars in transfers that looks like it came out of customer money they asked for a comfort letter saying will you please sign this saying that we're not actually receiving customer funds the reason they did all this is because in two t

a liquidation which is what a chapter seven years so m.f. global and you know internal controls so bad that it could allow the largest there. by bar of segregated funds in history perhaps the only major one in modern times. they should be gone instead of resurrected and continuing to receive significant salaries for places that destroyed wealth so i guess the question to follow up on that is i know you don't have a crystal ball but just having been on the inside and with your knowledge of this industry is there any kind of vested interests that could see that it was handled in this way in a way that benefits the executives that stay in this company that is a carcass and could even end up getting bonuses well to put the two stories together that you've discussed this extraordinary documentary by the federal reserve bank was. that a regulators failed in large part because they didn't believe in regulating or were unwilling to take on the largest most powerful folks and of course the former head of goldman sachs is a classic example of the people who

welcome back before the break we were talking about m.f. global and regulations that maybe are supposed to give the illusion of regulations when in fact they are not cracking down on the problem they are allowing it to continue possibly get worse i want to bring back our guest william black who is a former regulator he's also associate professor of economics and law at the university of missouri kansas city he was the director of litigation during the savings and loan crisis so he is the expert on this and how it's done if you want some justice in these cases professor black i want to bring you back in because just to stick on the m.f. global case for a little longer one of our friends in zero hedge who has been investigating this he brought up a letter from an m.f. global customer that had some choice questions for gary gensler and one that i want to close to you because i think it's a really good question as you're someone who has overseen prosecution of people in the financial services so again sort of on record stating that the c. f.c.c. rules

oddities markets let's get into m.f. global little bit more because what i'm interested in do you believe that these trades really got out of control and so john course i won't freak out or whatever. or do you think that for advice a longer john course i knew about the volatility of these trades and evidently customer funds would have to be reached until well you know i think he absolutely didn't know that he had a problem with those transactions but if i can look at the size of that transaction in their march two thousand and eleven report people keep saying it was a six billion dollar transaction actually that's not correct it was eleven billion plus he was long some of the weaker european credits and short credits like france now they didn't give the size of each individual position but that said given what he was long and given what he was short as stated in the march report at least when you look at what was happening during two thousand and eleven i believe that there were several days in two thousand and eleven when m.f.

morgan stole one point two billion from the m.f. global clients and this is the exact amount that they are claiming that they've made a head of goldman sachs over on their desk of death apparently there's this really lovely girl life masters is competing against isabel he let who is the goldman sachs head of commodities trading and isabel according to blith masters can't cope with our superior platform in industry connections a certain dark mistress of the universe has been heard to say if you are the queen you don't make markets you own the markets and everyone including goldman sachs pays exactly they own the market it's a rent seeking proposition they have a monopoly pricing there's no free market there's no competition they simply bludgeon these markets you know most spectacularly in the markets you know they would for example last week there was eight hundred million ounces of silver traded in one single day this is more than all the silver that's mine during the course of a year this is directly out of blights corrupt lawyer in this

funds one point six billion dollars represents a quarter of the entire balance of customer funds at m.f. global and exceeds the total net worth of m.f. prior to bankruptcy so it doesn't seem like this is a simple clerical error so is this clearing evidence in your mind of a criminal violation of c f.t.c. rules you've said that there was this criminal yes. simple answer so where is the case is it just too tough one thing that an attorney told us is that white collar crime is very difficult because of attorney client privilege and these financial firms everything they do is have a lawyer and so it's very difficult to build a case is that the problem. well there is a fraud of prime exception to attorney client privilege and as regulators and prosecutors and people bringing civil suits we use that very aggressively against the frauds and it's not being done i mean not much of anything but rest of it is being done in against the major financial frauds other than in an insider trading where they're actually have been some successful prosecutions but otherwise you can commit these fraud so far with im

rags that sounds like jamie diamond and blythe masters m.f. global what happened to the money well this is not a boat accident the facts suggest that the customer money at m.f. global stolen twice first by core sign next by j.p. morgan the system was twisted to hide the involvement of powerful figures with strong ties to the political system and multinational corporations operating out of new york and the city of london as richard dreyfus said in the movie jaws well this is not a boat accident now remember the response from richard dreyfus was to the corpse of the first victim of jaws and. to the public to the tourists coming to amity it was a boating accident that had killed this woman and one of course when he saw this the body he said this is not a boating accident and we see the same thing in the financial markets now is regulators and politicians seeking office to keep on telling us it was just a boating accident was just a little accident a few divisions glue up accidentally there is no predator involved here there's no violence be equivalent a

m.f. global's to use. roe wants the subcommittee to question bank witnesses about why it kept the money when it suspected it might belong to customers. >> if you knew there was a problem with the transfer and they refused to swear to you that this wasn't customer money, why do you still have it because, very clearly, it is customer money. >> reporter: roe says, to date, members of his coalition have received about three-quarters of their money back. he's still optimistic they will eventually be made whole. diane eastabrook, "nightly business report," chicago. >> susie: home prices in most of the nation's major cities dropped for the fifth straight month in january, a sign the modest sales increases seen recently have yet to boost prices. the s&p case-schiller index found the average home sold in january lost eight-tenths of its value from december. prices in 17 of the 20 cities the index tracks fell from january of last year. >> while this report is disappointing, it's disappointing for this particular mon

sent by a firm executive at m.f. global jon made that direct order to transfer customer funds to the tune of two hundred million dollars to j.p. morgan in london before the firm went bankrupt this should be a game changer we'll talk about it with our guests but now let's get to ben bernanke it's been a busy week in the spotlight for the federal reserve chairman today ben bernanke you spoke at the opening of a fed conference in washington with other central bankers this rounds out a week where he gave two lectures in his college class the first ever talk by a sitting fed chairman live streams for everyone to see not just the students they got the spot there now you could call it class or you could call it indoctrination or an attempt to rewrite history or a p.r. offensive in the face of criticism regardless it's friday so we have some time we took some time to look at his lesson plan with more scrutiny and yesterday he tackled the issue of the housing bubble and the debate over the role of the fed's loose monetary policy in

because mr rogers you said very early on that m.f. global broke the sacrosanct rules and the commodities market taking money out of segregated accounts mr rogers it has been five months since m.f. global declared bankruptcy customers are still missing their money. is still walking free there have not been a lot of consequences i'm curious where is this leading are we going to see next that you know chase customers wake up one morning and see that there is money taken from their accounts from j.p. morgan is that the message this is sending well it might have been that way but this certainly sending a terrible message to the world we were never supposed to. first rule one learns in the carotids business and somebody tries to let me know that it's that simple law and this is a bigger issue here nobody's going to jail. in the thirty's a lot of people with the president of the new york stock exchange went to jail in the ninety's when we had the you know what we call the s. and l. problems hundreds of people went to jail who has gone to jail this

now before i get to our guest today let me just give you a repack out of this m.f. global hearing because it's going on right now on the hill when we went on air with the house financial services oversight committee and executives from m.f. global who basically are saying nothing you saw edith o'brien the assistant treasurer plead the fifth which was actually more valuable as one lawmaker even said than what other m.f. global executives were saying which was basically oh yeah it's bad that the money of customers is missing we know that's wrong but was a my responsibility i don't remember anything suddenly they all have amnesia this is the c.f.o. the general counsel the another executive as well one lawmaker said it reminded him of hearings back in the day when he had enron executives in front of him so tomorrow on the show we will have a founding member of the commodity customer coalition and the global customer also a fund manager who saw his account vaporized ok he's one of the victims and he was consulting with congress on the hearing he'll be here to debrief us tomorro

oh and still ahead bonuses for m.f. global exactly that's a joke right big idea and we'll break it down with a reality check but first your closing market numbers. you just put a picture of me when i was like nine years old i like to tell the truth. i confess and i am a total ghetto friends that i love driving hip hop music and pretty. she was kind of good but yesterday. i'm very proud of the role without she has played. oh. you know sometimes you see the story and the scene so. you think you understand it and then something else here's some other part of it and realize that everything is ok you don't know i'm sorry welcome to the big picture. what drives the world the fear mongering used by politicians who makes decisions to break through that sort of way who can you trust no one who is you know view with a global missionary zeal where we had a state controlled capitalism is called sessions when nobody dares to ask we do our t. question more. welcome back so as i was starting to get into before the break greece's bailout is r

guest on yesterday who is the bankrupt and he's an attorney and he's representing eight thousand m.f. global customers who lost their money or his money has it turned up yet and he's been very critical of j.p. morgan throughout the process and he's done it mainstream media interview rounds being critical of j.p. morgan throughout the process and he told us that he was told by at least one mainstream media channel that they had received a call from j.p. morgan who said we're going to pull our ads you can't have this guy on does that jive with with real stories that you've heard in real examples because i thought i found that pretty darn right and shocking. i think it does but you know most people in the media have what i would call a built in radar they know how to push an issue they know where the line is and how not to step over it so a lot of the censorship that takes place is really self-censorship it's inforced maybe by their bosses you really by someone from the outside calling and it's not really done so blatantly but i wouldn't be surprised if it was there was just a report yesterday

m.f. global's customer agreement for customers trading in cash bodies futures and a bunch of other options and futures it said that they pledged to. hereby loan or pledge to grow. in writing the global to write excuse me in accordance with the click of a law to borrow pledge pledge transfer hypothecate re take a loan or invest any of the collateral so there you can see how this was going on and global in allowing them to lever up in the u.k. through their subsidiary which they did so given all of what we just talked about and the additional leverage and temporary liquidity that can be created through this shadow banking process now you understand why for example at thomson reuters and alice and up with this considering that real hypothecation may have increased the financial footprint of euro zone bonds by at least four fold that a euro zone sovereign default could be apocalyptic and now you know what real hypothecation is. are right before we go let's bring. in the newsroom and shannon dunn know in the control room two. stories that we that caught our eye so politicians we know they don't

is expanding its m.f. globalinquiry and it's got what looks like its first victim popular contributor to c n b c r fisher. but the legend around all these unless you know show this he knows he's a legend they say you're a legend when you go and i'm only fifty god like seven years ago when you saw the tree when you were like thirteen so there it was on c. and d. c. ok fisher's m.d.f. clearing corps has allegedly been performing the same activity m.f. global engaged in is being sued by the c f t c and there is a saying that he didn't segregate customer money from his own accounts but apparently this just came out as we've had a chance to look at it but apparently he pulled money and put it into j.p. morgan during during during and after the financial crisis for about two years and he didn't take care to make sure that those accounts were segregated were taken morgan would have been able to use that money for their own positions or whatever it is so i think this is this is really interesting this week are getting mo

morgan why are they always involved in any of these money trails with m.f. global with this guy yet they're never punished gambino family they're like they're happy they're like a top family i think that they like goldman sachs is more like a special little especially operation like i am of called was like the big honcho ok so i mean them of course sorry j.p. morgan so i'm not surprised what they did with. customer accounts and customer money so ok while we're on the media some of our viewers i actually noticed and so did dimitri we noticed that they wanted to hear our opinion on the whole coney story of course the documentary that was this huge viral sensation created by the invisible children group about just a colony of uganda became viral less than two days jon stewart may have taken the words right out of our mouths when it comes to the mainstream media response. we have seen and been following for years we've been strong for years our work in central africa for years is somebody who asked president obama about this last october and there was very little inter

according to the judge involved in this case you know well what about the packers who hacked into m.f. global accounts but what about the hackers that hacked into the live or business multi hundred trillion dollar business they hacked into little goldman sachs they hacked into greece to stabilize the country were the penalties for these people exactly because all these guys are charged with in most of these cases in the sony and fox case that they just basically took down the site and they took some e-mail addresses and passwords ok that's the extent of it now who got involved with the feds that f.b.i. and with them apparently it looks like from the time line that they in fact hacked strout four and then the feds encouraged them to use the credit card information they stole and used that to purchase seven hundred thousand dollars on these credit cards so that is a financial crime but a seven hundred thousand dollars where are the same thing where is rupert murdoch in jail why isn't he facing one hundred twenty two years because according to u.s. attorney preet brewer off are said in a stateme