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MF Global’s General Counsel Didn’t Sign JPMorgan’s “This Transfer Does Not Contain Customer Money” Assurance Letter On The Off-Chance It Did Even Though That Is Thing That Would NEVER HAPPEN

MF Global General Counsel Laurie Ferber twice resisted providing assurances to JPMorgan Chase that the company was complying with rules to segregate customers’ collateral, saying language in a draft provided by the bank was too broad. JPMorgan was “specifically interested in two transfers” that occurred the morning of Oct. 28, Ferber said in testimony prepared for a House Financial Services subcommittee hearing tomorrow. The first was a $200 million transfer from a segregated account at the firm’s brokerage to a “house” account, followed by a move of $175 million from the house account to a London subsidiary’s account at JPMorgan, she said. “Although I had no reason to believe that any non- compliant transfers from segregated accounts had occurred or would occur, I did not think that any individual officer or employee should be asked to issue such a broad certificate,” Ferber said in in her testimony. Any employee making such an assurance would have had to personally handle all the transfers or been able to review all the transactions within the available timeframe, she said. [Bloomberg]

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37 Responses to “MF Global’s General Counsel Didn’t Sign JPMorgan’s “This Transfer Does Not Contain Customer Money” Assurance Letter On The Off-Chance It Did Even Though That Is Thing That Would NEVER HAPPEN”

  1. H.R. Cohen says:

    "Well, Laurie, without those certificates, there is just no way that we here at JPMorgan will accept those wires and potentially be taking client money improperly. We're reversing that wire back to you until you straighten this out. We're a reputable house, not a bunch of scavenging thieves."

    -What JPMorgan folks definitely didn't say in response to not receiving the certificates that they "required" MF Global to deliver

    • internal transfer says:

      The money was already at JP, get it ?

      BOTH THE SEG MONEY/Acct AND THE HOUSE ACCOUNT WERE IN FACT AT JP, so kudos to them for actually saying we are not going to simply move the funds that you owe us from one of your accounts to the other, because we think they represent customer deposits though we don't have complete visibility on it.

      When someone funded a man financial account ( i refuse to say mf global an longer ) you wired money to chase or harris

      • H.R. Cohen says:

        You are a generous person if you think JPM should be congratulated for recognizing that they might possibly be covering MF Global's obligations with client money, trying to ascertain whether or not they were, and when they couldn't get clarity that they were not in fact doing so, doing it anyway.

        • Violation ? says:

          I suppose it sounded that way, but given that the money was to cover a liability in a man account at JP, and the funds were in an identical account in the name of man at JP ( the exact account will have sad ,"for further credit seg funds" It does show some restraint at least not to simply do the internal transfer in response to a customer request.

          Think about it in your own biz, if you have two identical customer accounts and one is debit or undermargined you better believe your going to relate the two accounts pretty quickly.

          • JPM Teller says:

            Totally agree.

            I mean, if a guy walks into my local branch, ski mask, pump shotti, the works, robs me blind. I'm unhappy, okay, given. But if he takes that ski mask off, greets me with a smile, and asks to open a new checking account with said money, am I supposed to turn him down? I mean, I work for a bank dude, it's doesn't really matter who's money is where, as long as its all here.

            Moron.

          • cooked rock says:

            JP seemingly had no liability in following the customer instruction it seems, and indeed moved the money internally to cover the MAN/MF liability.

            Let me guess you maxed out your debit card again.

            ( not a jp apologist/lost money on man bankruptcy, shares and trading accoutn )

          • Guest says:

            They covered the liability with money they knew wasn't MF Global's.

            It's no different than taking receipt of stolen property, which is a crime. Nail em.

      • Guest says:

        I agree, that they were actually attempting to verify the source of the funds says that they had some controls in place and actually intended to follow them. Whether those controls were sufficient is another question, but it's more than what would have occurred at many other financial institutions, which is to say, nothing.

        Executive: Yes, we'd like to wire money from [insert obvious customer account here] to [insert account in name of firm partner here], please.

        Banco de Panamá: Si, señor!

  2. PermaGuestII says:

    Translation: "While I didn't think my operations people were theives per se, I knew that our backoffice was such a complete flustercluck that I couldn't rule out some peon making a stupid mistake that would not be caught by our laughably inadequate systems."

    • guest says:

      nailed it.

    • wahwah says:

      Guarantee that JC and his management team didn't give a flying fuck about the state of ops. Too bad they reaped what they sowed. You don't have to be a thief to let this happen, just extremely arrogant and probably greedy.

  3. _guest says:

    "Any employee making such an assurance would have had to personally handle all the transfers or been able to review all the transactions within the available timeframe, she said."

    So if you don't sign memos or personally shepherd wires through, what would ya say ya do here?

    • Laurie Ferber says:

      Give vague verbal assurances that attempt to keep our firm afloat will keeping my personal freedom afloat. Why don't you understand? I'm a people person!

    • JPMMortageServicing says:

      Yes, that is precisely how we deal with foreclosure documentation.

  4. CSPAN says:

    "I had no reason to believe that any non-compliant transfers from segregated accounts had occurred or would occur", said Ms Ferber. When asked why, she replied that the only section of the Wall Street Journal that she read was the Personal Journal. Furthermore, she never socialized with her coworkers and didn't have a company email account. And, finally, she never drove past the office at 3 AM last October to note that every light in the building was on.

    • Man financial says:

      was this on cspan ?

      SHIT I missed it all.

      If you heard eith obriens voice you must be still laughing. She had one of teh strangest voices I've ever encountered.

  5. Safe Harbor says:

    Money? What money?

  6. Chicky says:

    Corazine emerges a hero after this disappears and that appears.

  7. Guest sausage maker says:

    Whatta guy!!!

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