By Matt Taibbi
April 24, 2012
So the Senate Banking Committee is beginning hearings todayon the MF Global scandal, hearings entitled, “The Collapse of MF Global: Lessons Learned and Policy Implications.” Apparently the government has already moved to the reflective, introspective, South Park-ian, “You know, I learned something today!” stage in its examination of the scandal, despite the fact that the government’s official “response” hasn’t even started yet, i.e. authorities have yet to arrest a single person in this brazen billion-dollar theft story.
To make an obvious comparison: Much like the Trayvon Martin/George Zimmerman case, the outrage here goes beyond the fact of the horrific crime. An equally profound insult in both cases lay in the fact that that serious crime obviously had been committed, and yet authorities refused to act for months. This situation with former Goldman chief and U.S. Senator Jon Corzine and the officials of MF Global involves a less physically savage offense, but the authorities’ refusal to act is every bit as incredible.
Nobody disputes the fact that MF Global officials dipped into customer accounts and took over $1.6 billion of customer money. We not only know that company officials reached into customer accounts, we know they brazenly lied to bondholders, ratings agencies and investors about the firm’s financial condition (“MF Global’s capital and liquidity has never been stronger,” wrote the CFO of MF Global’s holding company, on the same day Moody’s downgraded it to junk status).
We even know that eighteen days before the firm went bust, company officers discussed how quickly to return money to customers, and even contemplated, in writing, the possibility of not returning the money right away. This is from a risk-assessment document prepared by company officers entitled “Break the Glass”: