First it was $600 Million. Now it’s $1.2 Billion. Who knows how much higher the number could get before all is said and done.
Our old Governor John Corzine is testifying today on what happened to at least $1.2 Billion dollars of his client’s money from his company MF Global. About all he can say is that he doesn’t know what happened to the money and he is very sorry. Wow, that really helps. That would kind of be like if you went to a fancy restaurant and had your car valet parked and when you came back to get your car after dinner the valet attendant said to you : I can’t find your car, I don’t know what happened to it but it is gone. I am very sorry. And the attendant gives the same sad story to everyone else that dined at that restaurant that night as well.
The money in question represents customer funds. Analysts believe that the funds were raided by MF Global executives to cover huge losses on bad investments and to keep the day-to-day operations of the company going. Of course this is completely illegal. When MF Global ran out of money, they were supposed to go out of business and simply return the money owed to their customers. Not only did they not do that, but they covered it up as well. It’s easy to have money on paper as long as no one calls you on it.
Did this really surprise anyone? After seeing all of the greed, stupidity and outright fraud that has been exposed from various businesses as well as the Government over the last few years, don’t people understand that there is plenty more that is simply hidden and will remain so until something happens that calls for the non-existent money. Like the Bernie Madoff Ponzi scheme, the clients all thought they had tons of money on paper for many years because they didn’t ask him for the money. When they did ask, he reeled in new investors to pay for the withdrawals. This works up until too many people need to take money out and he can’t get enough new investors to contribute. After Madoff was uncovered, hundreds more have been found out in the last few years and I am sure there are many more to come.
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