Late last week, as Jon Corzine attempted to sell MF Global, it was reported that that probably wasn’t going to happen on account of the fact that those who’d taken a look at MF’s books weren’t comfortable with the approximately $600 million in customer funds that had gone “missing.” Days later, despite a manhunt for the money and a false alarm at JPMorgan, the cash still has not yet turned up. For his part, Bart Chilton, a commission at the CFTC, is pretty pissed. “We shouldn’t have to go on this magical mystery tour looking for the loot. It shouldn’t have taken this long,” he said at an energy-trading conference in Houston. “For us, job one is always–no excuses–to ensure that customer funds are held sacrosanct. In this case, as the Stones sing, we ‘got no satisfaction.’” Possibly tripping on magic, Chilton, pictured at left, concluded that: “It’s a distinct possibility, some would say probability, that somebody has done something with the money, and that it’s not going to be ‘all of a sudden discovered’ with an innocent explanation.”
So….okay. We’ll play along. Where is the “loot” and what was “done” to it? Continue reading »
Treasury Secretary Hank Paulson’s “blueprint” for revamping the financial regulatory system is already coming under fire from powerful agency heads. As early as Friday, even before the details of the plan were widely-known, the plan was lambasted by John Reich, the director of the Office of Thrift Supervision, which oversees the savings and loan industry. Immediately after Paulson’s speech this morning, Commodity Futures Trading Commission big shot Bart Chilton released a colorful and blisteringly critical statement describing the plan as “moving boxes around in Washington DC.”
Paulson’s plan would combine the Securities and Exchange Commission, which regulates equities and debt markets, with the Commodity Futures Trading Commission, which that regulates the exchanges trading commodities and financial futures. The two commissions have very different regulatory approaches, with the SEC favoring direct regulation and a rules-based approach and the CFTC favoring a principles based approach that relies heavily on self-regulation by commodities and futures exchanges. SEC head Chris Cox has been described as being disposed to supporting the plan.
After the jump, we delve into the dirty, metaphor-strewn past of the CFTC commissioner.
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