m.f. global went bankrupt less than a year ago taking one point six billion dollars in customer money with it we'll talk to a man fighting for m.f. global customers to get him back about why he's having deja vu in the wake of this pia news johndroe co-founder of the commodity customer coalition will join us let's get to today's capital account. all right p.f.g. best according to its website which i took a look at as soon as i heard this news that has broken it has been ranked one of the nation's top fifty brokers for thirteen years it strives again according to its website to be an industry leader in innovation while at the same time recognizing that it is success rather is absolutely driven by the diligent and respectful care of customers and their accounts then yesterday customers received this e-mail according to one that i spoke to due to a recent emergency involving russell watson door senior that's the firm c.e.o. a suicide attempt some accounting irregularities are being investigated regar

we know the story with m.f. global we've covered it extensively and i've talked about a lot about it chapter eleven bankruptcy no receiver really. a difficult situation for customers they haven't gotten a lot of their money back it's unclear where they fall in priorities with customers versus the creditors you were talking about the importance of a receivership which was not applied in that case the friend it needed to at the beginning so first explain the importance of a receiver in a case like this and then tell us why it's a big deal that that there will be one for parenthood well in both the made off case and him afloat will you have a trustee who's running the bankruptcy process he's basically there to recover as much assets for the company as possible but he can't quit for the third parties every time mr pickard in the made off fraud tried to sue j.p. morgan to the big banks he lost in court and that's because he doesn't have that power a receiver on the other hand could look at anything and i think what happened

or m.f. global contributing to what our guest calls a bubble and perceived safe havens that you will hear the answer to that plus in a very special friday the thirteenth loose change dimitrios xenos our producer and i found a church and graveyard right near wall street where we discuss a tone meant and invoking the spirit of the law when it comes to financial crimes let's get to today's capital account. we are back on wall street today now after yesterday we descended upon the floor of the new york stock exchange behind me today we're crossing the street for what you could call an alternative exchange we have the opportunity to sit down one on one with jim grant editor of grant's interest rate observer from where he really does is observing jim grant let me just say it is a real honor to sit down with you thank you so much for allowing us into your domain my pleasure well great thank you so let's start with because there is a huge outrage about this life or scandal and when we actually first process

global now the possible m.f. global redux p.f.g. best we're going to get into the details of these scandals with our panelists tonight but i'd say that overall it's safe to say that wall street won't change until you force it to change and that's something that neither the president nor mitt romney are really to do despite the fact that wall street is a whole lot to do with the state of the economy right now but again if they don't see it on the campaign trail that probably doesn't exist that at least seems to be the mainstream media's approach while the rest of it they choose to miss. all right so let's roll up our sleeves dig into the details of the latest scandals to rock the financial world new information has come out of the new york fed may have known about flaws with live bores early as august two thousand and seven so the blame game begins as the investigation spreads to top u.s. banks like citigroup j.p. morgan and b. of a deeply the banks or do you blame the regulators then if the f.t.c. is accused i would based broker p.f

m.f. global refco and now. max keiser tweet next time geitner accuses china of currency manipulation they can point to libel or in tell tim to s t f. well yeah exactly right this is an amazing pan global manipulation scheme out of the city of london once again focusing on a lie bore it's a massive manipulation of interest rates that affects all the currencies around the world including the chinese when and you know timothy geithner the united states has been pointing his finger to china saying you're a currency manipulator and you need to adjust devalue the can currency you. continue to export your way into super power status and now the next time they have this conversation china is going to say to me geithner look you know you're the manipulator stop manipulating a lot more the second you stop military manipulating a lot more is when you know we'll consider your request on the currency front and of course to me geithner and mervyn king and bob diamond is associated barclays can't stop manipulating interest ra

of course is where we had lehman brothers a i j bernie madoff m.f. global why is london such a crap regulator i think the wrote really set in a big bang in eighty six when he says that should government deregulated the financial sector and she demolished the silo like structures and the partnerships that used to exist within the city and in those days i'm not saying it was totally clean but it was less less easy for conflicts of interest and corruption to occur and the various key dates that as i said one thousand nine hundred two was a key day when there was the last ever criminal trial of high level bankers from the city of london which was the blue arrow trial three senior executives of a bank at west was given suspended sentences for rigging a rights issue and one that one stop broker who helped them from u.b.s. phillips and drew was also given a suspended sentence for rigging a rights issue now the trouble was this didn't go down particularly well with the establishment so they they engineered. a court of appeal case in july ninety two where. the sente

. >> susie: it looks like a repeat of m.f. global, but this time, the fraud appears to be smaller. more than $200 million in client money is missing from p.f.g. best, the futures brokerage firm. federal regulators today sued the firm and its chairman russ wasendorf, sr., for misappropriating client funds and submitting phony bank records for at least the past two years. the national futures association froze p.f.g.'s accounts late yesterday, after the company reported wasendorf had attempted suicide. he remains in critical condition. we spoke with wasendorf back in november as the futures industry was grappling with the m.f. global debacle. >> f.c.m.s are required to keep their customer funds segregated from their operating capitol. that's religion in the f.c.m. world. we don't ever violate that. >> susie: also today, p.f.g. best's clearing agent, jefferies group, unloaded positions held by p.f.g. customers after the firm failed to meet a margin call. jefferies says it does not expect to incur any losses. as we mentioned, worries that corporate earnings will fall short of expectati

morgan situation where that two billion dollars was accidentally taken out of the m.f. global accounts hoops yes so again you know in the headline of build the biggest magazine in germany read germany's dumbest bank k f w again the bimbo route to the bimbo disguise you know i got this until i got this idea of maybe get americans to save more by creating the k.f.c. bank so they think it's going talking fried chicken and they go in there to gorge themselves on fried chicken or mashed potatoes you charge them five or ten percent put into a savings bank and so you know as i said willie sutton said he never robbed a bank when a woman screamed her baby cried so at least he had some integrity he there was a limit to who he wouldn't kill he wouldn't mean he wouldn't hurt a woman he wouldn't. heard of little baby but these bank robbers of today max they have no scruples like this they don't care they'll pull out a tommy gun to trading their credit default swap experiences that are going to blow up your economy destroy your economy they're going to take the i.m.f. as the supernational u

i am working on a case of deja vu in the worst kind of way the m.f. global saga it's gone on since october the firm declared bankruptcy taking one point six billion dollars in customer money with it that went missing still. being recovered these are customer funds that are never supposed to be touched they are sacrosanct this was dismissed by some as one bad seed one chaotic case guess what happened again liz another firm called p.f.g. best two hundred million dollars in customer money reportedly apparently missing according to regulators it appears to be that they were fraudulent submitting false bank statements we're going to get to the bottom of it we're talking to a couple customers we're talking to someone trying to recover the funds for m.f. global we're going to see what the big takeaway is here it's deja vu all over again and learn lister is going to get to the bottom of it next thanks learn for that update that's going to do it now for the news for more of the stories we cover check out our you tube page you tube dot com slash artsy america we will

some point it's finished at some point it's over but in these a commodity brokers accounts of this m.f. global are now peregrine. when they run out of fraud to engage with on some superficial level they just still customer money so peregrine has stolen two hundred million dollars m.f. global j.p. morgan stole over a billion dollars so you see that as a growing trend is just brokerage accounts a commodity brokers just stealing people's money as the ability to suppress interest rates using financial accounting trickery and terrorism plays out yeah unfortunately we have this problem for a long time that. people here has been stalling the financial industry and governments have tried to put in some rules the rules have been watered down and this is an ongoing issue some an issue in japan they had a pension fund collapse there with two billion dollars evaporating and it's an issue in europe it's an issue states there is a lot of money out there and a lot of reckless people and it's usually the little people with small investments that end up holding the bag now it's amazing in the in the u.k. or am

her zero zero zero or straight out to like m.f. global and p.g. i mean the kids are obviously wising up and we're aware of this what maybe there's hope in this new generation of teens but i think this they know they know the story they know the enemy we're out of time but this is the is the generation that perhaps has their parents losing their jobs losing their homes to these wall street banks and so i think that might inform them in a different way that's very experiential villa going to the bankers yeah forget the bankers but yeah well i would use another word but yeah i was down there is only going to be around there ok well that's all we have time for it so thank you so much for joining us and don't forget to come back tomorrow and in the meantime you can follow me on twitter at lauren lyster and give us feedback at youtube dot com slash capital account watch any shows you missed and subscribe watches in h.d. on hulu and have a great night. for sure is that so much and there's a huge music history lesson on the market so bring syria witnessin

in the m.f. global scandal we see that again here that they want us to believe that these regulators are purely incompetent but at the same time we see time and time again that in fact they look the other way and or are complicit in many of these crimes and what about ethics here profits then coming before any sense of morality in the banking industry. well absolutely and i think that it's probably a false false idea or somehow unrealistic to believe that ethics and morality would emanate out of wall street where we see some of the most unethical behavior and some of the most rampant criminal behavior anywhere in the world so the banking in the finance industry is not governed by ethics or morality it's governed by profit and it's governed by power what is interesting about this particular report is the fact it highlighted saudi arabia as a terrorist financing center now that's not something that the u.s. often mentions obviously being a closeout i why no what do you make of that. well there is always b

but last fall, more than $500,000 of money he had in a trading account at m.f. global went missing when the brokerage went bankrupt. he's still waiting to get some of that money back. >> based on the last check we got two or three weeks ago, we're still hoping to recover about $110,000. >> reporter: that experience shook johnson's confidence in the futures industry. it's been shaken further by p.f.g. best founder russell wasendorf's arrest last week for misappropriating customer money for two decades. at a senate agriculture hearing in washington today, the chairman of the commodities futures trading commission admitted the system failed. >> just like the police cannot prevent all bank robberies, market regulators cannot prevent all financial fraud. having said that, the system failed to protect peregrine customers, and we all must do better. >> reporter: last friday, the c.f.t.c. approved new customer protection rules. they require senior managers at futures brokerages to approve excessive withdrawals from customer accounts, detailed daily reports on customer segregat

of failed brokerage m.f. global. the rule requires a firm's chief executive to sign off on big withdrawals from customer accounts. >> for the third year in a row some are worried about a global sdmk slowdown. stay on the defense. jasob is back with us investor of strategy with us in philadelphia. jason. the scare is over the past couple of years ended with a nice fall rally for stocks. could it be the same this fall? >> yeah, we did think eventually we may see the monetary policy come in more sig kantdly, but in the near term basis economic indicators continue to point in a negative direction indicating that we'll see further weakness, and the reality is in order to get the federal reserve and other central banks that we want to have in order to get that lift in the equity market, we might have to see some further weakness in the economy first, and for that reason, we're remaining more on the defensive line. >> tom: and you're looking to consumers to stay defensive to colgate pal mauliv palmolive. >> would you put mo