Sat, Nov 28, 2015
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Opalesque Futures Intelligence

Independent Investigation Required: Did Criminal Activity Lead to Damage to US Price Stability?
Opinion: MF Global isn't a fight against Wall Street or capitalism. It's a fight against a criminal minority.

Wednesday, November 14, 2012

Independent Investigation Required: Did Criminal Activity Lead to Destruction of US Price Stability?


By Mark Melin

The regulated derivative markets in Chicago, New York and around the world offer key mechanisms for price stability.  They offer market participants the opportunity to hedge everything from interest rates to physical commodities.  Around the world a certain type of professional is drawn to the industry: the risk manager.  Many have seen leveraged implosions up close and they typically utilize a diversification strategy with a series of warning tools to provide indication of leverage problems.

It is for this reason damage to the core mechanism of price stability is so critical, particularly at this moment in economic history.  As a debt crisis threatens to implode across Europe, the unregulated Over the Counter (OTC) derivatives that now underlie the financial foundation could lead to serious consequence. The fight being witnessed is really between the forces that have favored unregulated, opaque derivatives fighting a battle against regulated exchange traded products, is one view.  Regardless of the viewpoint, the regulated mechanism of price stability being violated provides a serious backdrop to consider the damage being wrought if known criminal behavior is tolerated.

"Profits are down across the industry with trading volumes, " Mr. Koutoulas observes. "Sophisticated futures customers would prefer counterparty risk with a 'Too Big to Fail bank' rather than an uninsured clearing house." 
"Segregated account protections have proven to be nothing more than a paper tiger by Mr. Corzine's theft. If Corzine is allowed to walk, it sends the message to not just the futures industry, but the entire US financial complex, 'You can just steal customer money.' If a stand against criminality is not taken the integrity of the entire financial system is at stake."

MF Global About Criminality

MF Global is not an indictment of Wall Street, nor an indictment of any one company or firm.  It is an indictment of a criminal minority that apparently have a disproportionate degree of influence.

On Friday, October 26, 2012 a regulator went public for the first time calling MF Global theft. If this clear indication of criminal behavior is not acknowledged by those operating the investigation, it will represent a new low in criminality surrounding Wall Street. 

This isn't a fight against Wall Street or capitalism. It's a fight against the criminal minority.

This article was published in Opalesque Futures Intelligence.
Opalesque Futures Intelligence
Opalesque Futures Intelligence
Opalesque Futures Intelligence
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other Voices: Hedge fund marketing and the selling cycle[more]

    By Bruce Frumerman. How long is the selling cycle now? That’s a question my financial communications and sales marketing consulting firm has been asked on a regular basis by hedge fund firm owners and sales people, ever since we opened the doors to our firm in 1987 pre-crash. Wa

  2. People - Solus Alternative Asset Management adds chief strategist from BTIG[more]

    From Daniel Greenhaus joined hedge fund manager Solus Alternative Asset Management as managing director and chief strategist. He will work closely with Chris Bondy, Solus’ chief economist, managing director and executive vice president, said Chris Pucillo, CEO and chief investmen

  3. Opalesque Roundtable: Seeding deal terms can be onerous for hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Executives from fund of funds firms, family offices, a placement agent, a private equity firm, and an accounting firm gathered in Connecticut last month for the

  4. Opalesque Roundtable: Family offices flock to co-investment[more]

    Bailey McCann, Opalesque New York: Co-investments have been a hot topic for pension funds in recent years, as they try to move away from high fees and improve transparency. But now, family offices are more readily getting into the mix and establishing in-house deal teams, according to the delega

  5. More institutional investors invest in CTAs compared to last year despite dissatisfaction with performance[more]

    Benedicte Gravrand, Opalesque Geneva: "Despite a strong start to 2015 for CTAs in Q1, commodity market conditions have made return generation difficult for fund managers over much of the rest of the year to date," says Preqin’s November