morgan was mf global's banker.igators are now trying to determine if, in those last desperate days, mf global executives intentionally transferred customer money to j.p. morgan to meet a margin call from the bank. >> smith: is it legal for them to take the money from the customer account to meet their margin calls? >> no, definitely not. >> smith: i mean, that's different than internal repo. >> it is different from internal repo. and i would argue it's actually an act of fraud. >> smith: an act of fraud. >> yeah, i think it could be prosecuted. >> narrator: corzine says he did not order the transfers. >> please. >> out of the way, folks. >> narrator: but, he insists, he will cooperate with investigators to find out what happened. >> do you solemnly swear that the testimony you are about to give before this committee is the truth, the whole... >> narrator: his only public comments came at congressional hearings last december. >> i remain deeply concerned about the impact that the unreconciled and frozen funds have o

i'd like to go back to mf global if i can. chairman gensler, i'm referring to -- this committee, the banking committee here is due diligence has revealed to a loufts that you played an active role in the oversight of the mf global during the week leading up to his failure. how many conversations did you have with mf global's ceo jon corzine. and during these final weeks was there any discussion about possible shortfalls in customer accounts? this is central to what we're looking at. >> i thank you for that question. i had no individual conversations with jon corzine. i did participate on that sunday on a group call with chairman schapiro, our staff, her staff, i think new york fed and the london regulators were on as well with presentations coming over a conference call with 40, 60 people on it which i believe once or twice jon corzine spoke up and gave some information. if i could answer your further question, i think about what was my role that weekend, would that be helpful? >> you were the chairman of the -- you still are

chairman, receive this disc from mf global? >> i'm not familiar with the disc. >> you're not familiar? okay. it's our understanding that the cftc did receive the disk and that the cft began reviewing the documents of the disc and we would like to know when, and i'll ask you for the record, and what was the result of this review of these documents and did it show any shortfall? >> i'll make sure you get the information that you asked for, for the record. >> chairman gensler in may of 2011, finra determined that mf global had a capital deficiency. mf global ceo jon corzine personally appealed that decision, chaired by chairman schapiro. the sec upheld to determination. and the mf global publicly recorded a deficiency in august of 2011. when did the cftc first learn that mf global had a capital deficiency? did you learn it then? or did you never learn it? >> again, if i could have the general council follow up in the specifics. but as i recall it, my own memory was over the course of that summer. but it could follow specifics if t

do you think it's realistic that we can prevent something like mf global from happening? is that a realistic goal? >> i don't think it's realistic. i don't think you can prevent it. i think what you can do is create enough checks and balances in the system to deter a lot of what we're seeing. i grew up in brooklyn, new york, we used to have a word for what we're seeing at mf global. we called it fraud. people who commit fraud lie, steal, check, what have you. there's only so much you can do with regulations. they have to build in other processes that create an interarm effect that in the interim people will get caught if they do the long thing. one of the concerns that i think mf global points out if you've got a wonderful regulatory agency in the cftc and they have about 600 employees. shooting at a herd of buffalo with a pea shooter there is absolutely that no way that the cftc or the sec can help police the markets when they are deprived of critical resources or given the authority to help constrict resources out of the private sector. that's a big that i think what ha

while i am pleased to see that mf global trustee is making progress in returning funds to mf global customers, chairman gensler, nonetheless owes the public, i believe, a full accounts of how they failed to protect those customer assets in the first place. unfortunately, chairman gensler continues to recuse himself from all matters pertaining to mf global which effectively insulates him from congressional scrutiny. mr. chairman, i believe the public deserves more from their financial regulators. we need regulators who are willing to explain their actions rather than run for the hills. if there were regulatory failures, the responsible parties need to be held accountable for their actions and they need to admit what happened. chairman gensler's recusal impeded congress' ability to examine every facet of the mf global failure. i hope today chairman gensler will be morecourt following about his involvement so that congress can finally begin to understand what role he played and how congress should respond. i also hope that chairman gensler will be more forth coming about his management of the cf

when did the cftc receive this disk from mf global? >> i am not familiar with the disk. >> it is our understanding that the cftc did receive the disk and that it began reviewing the documents of the disk, and we would like to know when, and i will ask for the record, what these documents, and did it show any shortfall? >> if the general counsel could follow up and make sure you get >> ok. year ago, finra determined mf global had a capital deficiency. the sec upheld the determination and mf global reported deep deficits in august, 2011. when it did the cftc learn that mf global had a capital deficiency? did you learn and then, or did you never learn it? >> if i could have the general counsel follow up on the specifics, but as i recall, my own memory was over the course of that summer. they can follow up on the specifics, the date the staff learned it. >> that goes to the heart -- and i will be interested in the answer of the sec and the cftc's coordination of the regulation. if the sec did something they should not have, and if cftc did

>> mf global? >> i think actually with respect to both. >> with respect to both. okay. in essence, it is the agencies that are conducting civil reviews, i assume, and to the extent that there are criminal reviews that are being conducted they are being conducted by law enforcement entities, is that correct? >> that's right. >> so it is not the senate banking committee that's conducting >> i would not tell the banking committee what to do or not to do. >> at this point, as far as i know, we're not. let me ask you this. do you interpret -- do you hope to interpret the volcker rule in a way that what took place at jpmorgan would not have taken place or would not have taken place without real consequences? >> i think we've obviously been thinking a lot about this and the volcker rule is foremost in everyone's minds because of where we are in the process of reviewing comment letters. but also because of this activity. and it strikes me that the statute is pretty clear that in order to rely on the risk mitigating hedging exemption to the volcker rule, that there has to be som

mf global? >> with reference to both. >> it is the agencies that are conducting civil reviews, i am assuming. and criminal reviews are being conducted by law enforcement entities. is that correct? >> that is correct. >> as far as i know -- let me ask you this. do you hope to interpret the volcker rule in a way that what took place at j.p. morgan would not have been possible to take place are would not have taken place without real consequences? >> i think we have been thinking a lot about this. the vocal role is foremost in everyone's mind because of where we are and because of this activity. it strikes me that the statute is pretty clear that in order to rely on the risk mitigating and hedging exemption, there has to be some pretty strong criteria that needs to be met. whether or not the j.p. morgan traded meets that standard or not, we do not have a view on that yet. they have to be correlated to the risk. they cannot give rise to significant new exposures. they are subject to continuing monit

. >> i would like to go to mf global. this committee's due diligence has revealed that you played an active role in the oversight of mf global in the week leading up to its failure. we would like to know how many conversations did you have with jon corzine during the final weeks, and during these conversations, were there discussions about possible shortfalls in customer accounts? this is central to what we're looking at. >> i thank you for the question. i had no individual conversations with jon corzine. i participated on that sunday on a group call with chairman schapiro. presentations were coming over a conference call, which i believe once or twice jon corzine spoke up and gave information. to answer your question, i think about what was my role that weekend. would that be helpful? >> you are chairman -- you still are -- of the cftc. your role is chairman. >> as that week developed and the firm looked to develop and be in a frail shape, to ensure customer movement of money, and we were informed in that we can, by othe

one of the concerns that mf global.saddam is you have a wonderful and -- agency and they have 600 employees. this is, in my view, like shooting at a herd of buffalo with a pea shooter. there is no way that the cftc can help police the markets when they're deprived of resources or given the authority to help conscripts resources out of the private sector. that is a big thing that house to come out -- has to come out of mf global. >> a lot of them are trying to strip funding from your agency while you are being given more responsibilities. what is your feeling on the resource issue? >> i do not disagree with what harvey said. you cannot deprive an agency of resources while we are being asked to implement almost 100 new rules and have an enormous responsibility for the market. which should keep in mind that four years ago when i came to the cftc, we had 450 employees and now we have almost 750. the agency has grown rapidly. >> proportional with your duties. >> those duties have not kicked in yet. we have grown exponentiall

. >> dana: how is it different from mf global, jon corzine, the big democratic supporter? used to be the governor of new jersey. now they're under investigation for using -- actually, using customer money to make that. allegedly -- >> eric: allegedly broke the ball. everything i know about the company and jon corzine, mf global has define, they broke the law. >> greg: allegedly means definitely, right? >> eric: on t, yes. one more. quickly, robert downey junior is expected to get big payday for avengers. does he deserve $50 million? >> kimberly: this guy has been through tough times. bob, you should appreciate this. >> bob: i do. >> kimberly: he was down and out on his luck, getting arrested. no financial means available. multiple stints in rehab. happily married now. has a child, he just had another baby. doing fantastic. he has been box office gold. i love the success story. he is hardworking. i'm happy for him. >> dana: he was on the movie i saw on the airplane that i like. >> greg: one of his best movies. >> kimberly: very talented. >> bob: so many people in hollywood

. -- i would like to go back to mf global. were there any discussions about possible shortfalls in customer accounts? >> i think you for the question. i had no individual questions with john core resigned. i did participate on that sunday on a group called the chairman shapiro and our staff and her staff and the london regulators were on as well with presentations coming over a conference call with 40-60 people on it, which i believe once or twice he spoke up and gave information. if i could answer your further question about what was my role that weekend? >> you are chairman of the cftc. >> my role as chairman is as that week developed and the chairman look to be in for real- estate, to insure for the movement of customer money over the weekend we were informed by other regulators that there was negotiations going on to move the positions, so we wanted to ensure those customer positions were removed. we were ushered from their first line regulators, that all of the moneys were there. it was only 2:30 in the morning that was w

. >> i would like to go to nfl global -- mf global. diligencettee's due as revealed that you played an active role in the oversight of an f global in the week leading up to its failure. we would like to know how many conversations did you have with jon corzine during the final weeks, and during these conversations, were there discussions about possible shortfalls in customer accounts? this is central to what we're looking at. >> i thank you for the question. i had no individual conversations jon corzine. i participated on that sunday on a group called with chairman schapiro. presentations were coming over a conference call, which i believe once or twice jon corzine spoke up and gave information. to answer your question, i think about what was my role that weekend? would that be helpful? >> you are chairman -- you still are, of the cftc. your role is chairman. >> as that week developed and the firm looked to develop and be in a frail shape, to ensure customer movement of money, and we were informed in that we can, by other regulators, an

a lot of people on the street said mf global should not have been where it is and everyone knows thats why corzine was brought in. >>neil: a primary deal, less than two doze who are the chief distributors of government. >>guest: they can go dot -- go to the fed auction. >>neil: small are players. >>guest: much smaller. and you look at, even, things that happened and there has been a bond offering during the summer where they offered and it says in the bond oring they would give up 1 percent increase if corzine left the firm, because at time the speculation was he would be the next secretary of the treasury. and that lens itself to believe the company was not worth as much unless corzine had the relationships with government. >>neil: what at the least, congressman, if there is nothing sinister going on but the guy was overrated, and we have seen many on wall street if this situation, so, at best, he wasn't too bright. >>guest: if that is the case because you have so many people that are out this is segregated customer funds and that is a big deal. >>neil: when you raid customers funds

>>neil: more than they would go after a certain former goldman official from another firm, mf global.: the house held hearings on mf global with jon corzine was testifying and that had to do with customer money being essentially misused. some would say stolen. i don't think there was a single question posed it corzine, from democrats, maybe one or two. maybe one. i can't remember. >>neil: you not saying party politics. >>guest: most of the democrats left halfway through the hearing. on core design. and this is a case where clearly customer money was misused. and they --. >>neil: they drag this out. >>guest: we tag about jamie dimon screwing up? both sides have political objectives. the democrats clearly want to use this to show dodd-frank --. >>neil: raise both points brilliantly but in the mean tomorrow they are questions and raked over the coals, and digging us $4 billion deeper every day, so every day this drags on nothing to address the $4 billion deeper to debt where half of what this firm lost on this debacle. >>guest: i think this is a legitimate congressional response here. it

so there is some new fallout this morning in the mf global scandal.uments show that former chief executive jon corzine got more than $8 million in cash and stock options in the monthsing up to the collapse of this brokerage firm. keep in mind this is the 8th largest bankruptcy in the history of this country, folks. now the company is still trying to trace $1.2 billion of client money that disappeared in all of this. so here's the question that is on a lot of folks minds? why hasn't corzine or anyone else faced charges in this scandal yet? who better to ask than judge andrew napolitano. fox senior judicial analyst. we get a lot of e-mail about this. we see a lot of this in social media. what is going on with jon corzine and why is this investigation not underway? >> this is, martha, the unfortunate intersection between government and politics where the government has what is called, proscutorial discretion, a fancy phrase meaning it can decide who to investigate, who to prosecute, when to investigate it and when to prosecute. so it chooses to investiga

it was a huge mess at the end of the -- during mf global's final days.have the controls in place. basically, according to the head of the cme, front line regulator, mf global was a commodity exchange. by the way, that customer money -- >> steve: that was used by farmers. >> gretchen: when would we expect any impending charges? we remember when jon corzine was on capitol hill at the hearing testifying. >> right. there is lots of e-mails and there is a potential witness they're looking to that's basically asking for complete immunity. that's where this gets held up. the f.b.i. is kind of balking at complete immunity. a lot of people on the ground are saying just give it to her. >> steve: hypothetical question, if jon corzine were a republican, do you think there would have been charges? >> i think by now. does anybody really think there is going to be job charges against this guy before the election? as close as he was to the president, do you remember the comments the president made about jon corzine. >> brian: he was going to be treasury secretary! >> ab

not mf global money, just holding other people's money.ing their bets. they made a huge bet in the greek bond market. it was wrong. they had to post mar i didn't mt at that point they had to come up with more money or come up with the bet. they thought the bet would be right. they took customer money, brought it over that wall. it's fire wall, supposed to keep fire away from the customers. brought it over the wall, put it towards and added that -- >> steve: it's so illegal! >> once you jump that wall, right, steve, it's completely illegal. now the question is, did jon corzine call for that jump over the wall or did someone else? most likely -- it would most likely have to come from someone as high up as jon corzine. the problem is when you look at jon corzine, you think of this, take a look at this. >> when barak obama and i were literally sitting at a desk in a high-rise in chicago beginning to plan how we would try to get this economy out of a ditch, literally, the first guy i called was jon corzine. not a joke. not a joke. first of all,

the governor resigning from mf global dayings after the company collapsed. >>> it is 16 after the hour. now for the big talker this morning 43 catholic institutions suing obama administration targeting the hhs ban dates which requires them to pay for contracepti contraception. they say it is a threat to freedom. university of dote name the archdiocese of new york. >> he would like to see what we have said from the beginning and the cause for religious freedom. if the president wants to go ahead with his proposal to offer this type of reproductive services we don't agree with that at all. that's not the issue here. the issue here is he himself admitted there should be an exception for churchesment it prevents freedom of religion and rights rights of conscience. if it would stop there it would be fine. >> we will have a live report in a few moments. we will hear more from cardinal dolan on what it will take to put the contraception fight to rest. >> more on that one. it is a heated issue. >>> should nothing can off the table? denouncing a campaign ads with river right ha reverend jeremia

money is still missing from mf global funds. >> former fbi agent himself.ee what happens with this. he is from my home town. >>> thank you very much, lauren. good job with that fox exclusive. 10 minutes after the top of the hour. the service stinks, so does the food. should you be forced to tip your waiter if gratuity is already added to the bill. wait until you hear what happened when one family refused. >> chris christie getting an unusual request. an 11-year-old boy asking him for a note excusing him from school. wait until you hear how the governor responded. wait until you hear what's next on jay leno. >> he has come up with a slogan, forward. if unemployment doesn't conclude by november it will forward my mail. >> 15 minutes after the hour. major curve ball for the baseball. he admitted to using human growth hormone but now says he may have misunderstood the conversation. a college student filing a $20 milli $20 million lawsuit against the dea. he was mistakenly locked up for five days with no food or water after a federal drug raid. he was interviewe

at the history, a lot of people feel he has been given special treatment since he started about mf global i should note that jon corzine has raised $500,000 for the obama reelection campaign. it's a significant donor and fund-raiser for the campaign. i'm curious, where is in money. how did the money disappear and nobody knows where it is? >> i think at this point, the money has been found, but keep in mind it doesn't mean it has been recovered. which is another reason we need an independent counsel because the way the entire bankruptcy was structured. that is a problem in and of itself because some of the money was taken as collateral and shipped overseas. now these poor customers that were never creditors, they were customers and their money was supposed to be protected in accounts. it was illegally taken out of those accounts and sent as collateral. now it's overseas and it was taken as collateral and could take years. we learned from bear stearns and lehman brothers, it could take four years or not more to fight with foreign banks to get that money back putting these customers at a mas

new developments on the investigation into the collapse of mf global.f the largest hedge funds to collapse in american history. six months later after all sorts of investigations got underway. still no answers. $1.6 billion in investor money still missing and the head of the failed company jon corzine who is a political friend of president obama. he helped bring in big bucks for the reelection for the president, and there is a question about what's happening. where is the accountability? fox business network charlie gasparino wrote a column asking if the investigation is slow because of the political ties. why do you say it's slow. six months having worked in law. why do you think this is slow? >> reporter: mf global was not a hedge fund it was run like a hedge fund. it was a brokerage firm. jon corzine former governor, rams up the risk the place implodes and $1.6 billion in customer money disappears. that's not supposed to happen at a brokerage firm. terry duffy, the head of the cme said there was illegality here. megyn: what is the cme. >> >> reporter

if individual investors should be confident in the markets given everything that we've seen from mf globalto jpmorgan to facebook. and here's how he answered that question. take a listen. >> i think there's a lot of reason to have confidence in our markets and the integrity in how they operate. but there are issues specifically with respect to facebook and as we testified to, we're all looking carefully at the jpmorgan trading. >> can you tell us what you focused on in your investigation? >> i can't tell you just yet. we're clearly focused on what happened with the trading and whether there are any implications on that. still under way. >> do you have a time frame as to when you might have some answers? >> no, i don't. sorry. >> no answers about exactly what they're learning but they are clearly looking into the situation and no sense yet of when we'll get the details of what they've uncovered so far. >> thank you. >> you bet. >> we had a late-day selloff on the street because greece remains the word. european fears, remember those, kept back into play after former greek prime minister sai

. -- mf global. is pretty significant risk management failure. our system is much stronger debt was before the crisis, but still, this points out how important it is that these reforms are strong enough and effective enough that they can meet the key test. not to protect shareholders from losses, to prevent the unpredictable, but to picture when the mistakes happen, that they are modest enough incise that the system can handle them. we want work hard to make sure the system meets the basic test. the fed and sec and other regulators will be part of the process. we will take a very close look at this and make sure we review the implications for the design of the roles. -- rules. >> you mean that about the size the volcker rule? >> capital, leveraged and liquidity sizes. reforms and derivatives markets so there is more transparency and oversight. better capacity to understand and see when you see a large position like this take hold. that is a set of courre controls we need. i think this helps make the case. >> when you talk about fiscal issues, one

news corp., chesapeake energy, how do we have so many in the shadows of mf global?in some ways i understand the first look at boards, members of the board. when you look at it, so many people sitting on boards are distracted because they are on other boards and have their own day jobs and don't have the time to do the full due diligence sometimes. i know it's not an excuse but that is the reality, isn't it? >> it's an excuse and it's not a good excuse. there has to be more accountability by boards and directors. these are publicly traded companies and i think sometimes the management forgets that but they are accountable to shareholders. if they don't like that, they need to take themselves private. there are crazy things going on distracting them. they have to start internal review committees and go high hire outside lawyers and accountants and distracts from the day to day business and you wonder why companies like green mountain and best buy and others are down. a lot of them 50% or more from their highs. look how shareholders are being trashed by this misbehavio

we're talking about mf global, halloween surprise, seventh largest bankruptcy by assets in u.s.n you tell me what letter you circulated yesterday and what it may mean for this investigation. >> sure. it's very simple. we're calling on the attorney general to put in place a special prosecutor. there are so many different things surrounding mf global that i believe public perception is that it's been -- the system is compromised. and i think that it makes a lot of sense right now to give the special prosecutor an opportunity to come in and give that, if nothing else, the public an opportunity to believe that there is a fair system in place and that someone is going to protect these customers. there's just too many things that have gone on that lead to the inference of impropriety, and for that reason customer service is certainly warranted. >> just to get the viewers up to speed, let's run through it real quick who some of these characters are. we have governor and senator jon corzine, a bungler for the current president, but also one of the co-authors of sarbanes-oxley. he had he

and those clients didn't want mf global to invest in a euro position.-year-old industry futures that rose based on transparency and liquidity. i'd like to see more activity by the fed and the department of justice to protect that franchise and protect people whose money was taken without their permission with regard to how much risk that money was put through and how it just went adios. now granted, this fbi and department of justice might be following the 24-hour news cycle with jp morgan but if it isn't, having them pick and choose the industries they like and don't like for points of investigation, boy, it doesn't get any worse than that. carl, back to you. >> let's hope that's not the case, rick. we'll see where they go on that. it started with four friends in business school that came up with an idea to zigs, manufacture and distribute affordable and hip eyewear. since the launch in february of 2010, warby parker exploded on the start-up scene. it's a fashion brand, e-commerce company with a social conscious. they distribute a pair to a person in n

. >> this is like mf global, like jpmorgan. just rich people run amok. >> obviously there is a glitch in the system there are going to be brokers filing claims, no about. >> all eyes on nasdaq today. >> mark zuckerberg has lost a couple billion dollars today with the decline in facebook. >> on the best day for technology in who knows one, facebook shares down 11%. a new. so you can kill invading weeds down to the root. without harming your lawn. guaranteed. ortho weed b gon max. mcallen, texas. in here, heavy rental equipment in the middle of nowhere, is always headed somewhere. to give it a sense of direction, at&t created a mobile asset solution to protect and track everything. so every piece of equipment knows where it is, how it's doing or where it goes next. ♪ this is the bell on the cat. [ male announcer ] it's a network of possibilities -- helping you do what you do... even better. ♪ >>> which stock would you prefer? the newly merged eaton cooper as of this morning, or the brand-new facebook that came public friday. one

corzine received more than $8 million in cash and now worthless stock options in the months before his mf globalrokerage collapsed. >>> the supreme court has not yet ruled on obamacare, but the high court did rule that a man's children who are born through artificial insemination after his death cannot get social security survivor benefits. >>> and finally tonight, mark zuckerberg got married over the weekend. but a british legal services reports that facebook was the cause of one-third all divorces last year. >>> next, why is wall street defriending facebook? "the kudlow report" will be back in just a moment. ♪ ♪ [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the 2012 c-class with over 2,000 refinements. it's amazing...inside and out. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. through mercedes-benz or creates another laptop bag or hires another employee, it's not just good for business, it's good for the entire community. at bank of america, we know the impac

they wanted to know about mf global, too. the senators haven't forgotten about that. and facebook was in the air today as well. just after the hearing i had a chance to catch up with mary shapiro of the sec. and i asked her whether individual investors can still have confidence in these markets given everything that we've seen going on. take a listen. >> i think there's a lot of reason to have confidence in our markets and the integrity of how they operate. but there are issues that we need to look at, specifically with respect to facebook and as we just testified to, we're all looking carefully at the jpmorgan trading. >> can you tell us about what you've learned about facebook so far in your investigation? >> i really can't talk about it just yet. as we said, we're very clearly focused on it. what happened with the trading. and whether there are any implications beyond that still under way. >> reporter: do you have a time frame for when you think you might have some answers? >> i don't. i'm sorry. >> reporter: clearly here we're seeing that mary schapiro doesn't wan

and that was agear and mf global.s not really good company to be in. >> paul, don't go anywhere. stay with us for a second. we want to bring in somebody else here. >> that's right. you got to take a look at dell. this is our disaster du jour. the stock is having its worst day in 11 years. and we've got cnbc contributor, abigail doolittle with us. remember in our nfl stocks draft dell was abigail's stock draft pick. so, abigail, i'm going to ask you right now, would you buy dell right now? again? would you draft it again? >> above $11.34, yes. i would still draft dell. and when we take a look at the chart, the pattern that i was bullish on this stock for in the first reason, it's called an ascending triangle. it is failing currently right now. however, it's traded into a bigger symmetrical triangle. this pattern can break up or down. currently it's breaking to the downside. if it continues and it does go below that $11.34, dell is going single digit probably below its $8 cash per share. i think it's found nice support