Tag Archives: Commodity Futures Trading Commission

Bix Weir ~ JP Morgan Lawyer Exposes Corruption At JPM, MF Global & The CFTC

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Road to Roota | October 6 2012

Below is the written testimony to Congress of Diane Genoa, Deputy General Counsel for JP Morgan as it relates to the MF Global investigation. I have no doubt that she was “deputized” such that JPM’s actual General Counsel, Stephen Cutler, didn’t have to speak. Unfortunately for the Bad Guys, Ms. Genoa’s dance around the issues may have provided more information than they wanted to expose. Here’s the statement…

Statement from JP Morgan re: MF Global Collapse

Clearly JP Morgan believes they did NOTHING wrong and were just an innocent bystander who was trying to “lend a hand” to one of their customers in a time of need….GIVE ME A BREAK!

Basically, Ms. Genoa knows exactly what they did illegally in this situation and is trying to dance around it. JP Morgan KNOWINGLY confiscated at least $200M of customer funds and then tried to cover their tracks by getting MF Global to sign a waiver three times that stated the funds were legitimate and not customer segregated funds. MF Global never signed the document but JP Morgan still hasn’t given the money back.

Here’s the telling statement on page 7…

“In retrospect, events appear to have overtaken MF Global during the weekend before it filed for bankruptcy, and, as a result, the letter was not signed. Nevertheless, our request did result in our receiving multiple clear oral assurances from senior MF Global officials that MF Global was in compliance with its obligations under the CFTC rules.”

So who were these “senior MF Global officials” at MF Global?

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Greg Hunter ~ Is Silver Manipulation Case Being Dropped?

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USA Watchdog | August 7 2012

Lots of news out this week about the silver manipulation case being dropped by the Commodity Futures Trading Commission (CFTC) with zero action.  The first of several stories was put out by the Financial Times on Monday.  FT.com reported,

“A four-year investigation into the possible manipulation of the silver market looks increasingly likely to be dropped after US regulators failed to find enough evidence to support a legal case, according to three people familiar with the situation.  The Commodity Futures Trading Commission first announced that it was investigating “complaints of misconduct in the silver market” in September 2008, following a barrage of allegations of manipulation from a group of precious metals investors.  In 2010, Bart Chilton, a CFTC commissioner, said that he believed there had been “fraudulent efforts” to “deviously control” the silver price.  But after taking advice from two external consultancies, the first of which found irregularities on certain trading dates that it believed deserved more analysis, CFTC staff do not have sufficient evidence to bring a case, according to the people familiar with the situation. The agency’s five commissioners have not yet formally determined the outcome of the investigation, leaving the possibility that staff could be instructed to dig deeper. A CFTC spokesman said: “The investigation has not reached its conclusion.” He declined further comment.” (Click here for the complete FT.com story.)

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Bart Chilton ~ FT Report That CFTC To Drop Silver Investigation Is ‘Inaccurate & Premature.’ ‘There Have Been Devious Efforts To Move Price Of Silver’

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Silver Doctors | August 6 2012

BREAKING ~ When we first learned Sunday night that the FT was reporting that the CFTC was dropping their 4 year silver investigation, The Doc contacted CFTC Commissioner Bart Chilton for his take and role in the decision.

Just like Usain Bolt at the 2011 World Championships, it appears that the FT has jumped the gun. Commissioner Chilton has informed us that ‘The Financial Times report related to silver is not only premature, but inaccurate in several respects‘.

As to whether Chilton believes the silver market has been manipulated the Commissioner informed us:

“I continue to believe, consistent with my previous statements to which you referred, and based upon information from the public, that there have been devious efforts related to moving the price of silver. Incidentally, I also believe there have been silver and gold market anomalies outside of the silver investigate window that have raised, and continue to raise, market concerns.”

The Doc’s full correspondence with Commissioner Chilton is included below:

Commissioner Chilton,

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Matt Taibbi ~ Banks Paying Huge Fines For Wall Street Scam

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Rolling Stone | RS_News | June 30 2012

A Huge Break in the LIBOR Banking Investigation

OPINION ~ This is a huge story:

On Wednesday, Barclays won the race to reach a deal with U.S. and British regulators, beating UBS, which was reportedly the first bank to begin cooperating with international antitrust authorities. Barclays agreed to pay at least $450 million to resolve government investigations of manipulation of Libor and the Euro interbank offered rate (or Euribor): $200 million to the U.S. Commodity Futures Trading Commission, $160 million tothe criminal division of the U.S. Department of Justice and $92.8 million to Britain’s Financial Services Authority.

I wrote about the Libor investigation in the current issue of Rolling Stone, in “The Scam Wall Street Learned From the Mafia,” about muni bond bid-rigging. Throughout this spring, while the Carollo bid-rigging case played out in a Manhattan courtroom, negotiations between banks and regulators were going on in this far larger cartel-corruption case. It’s been clear for some time now that a number of players had begun cooperating, and the only question was which bank was going to settle first.

Despite widespread expectation that it would be UBS, it turned out to be Barclays. You know how in Law and Order Jack McCoy always puts the two murder accomplices in separate rooms and tells them both that whoever talks first wins? Something like that happened here. In any case, the Department of Justice filing on the settlement contained excerpts of emails and other evidence that recall the taped phone conversations in the Carollo case: once again, we have seemingly incontrovertible evidence of wide-scale market manipulation. From Alison Frankel at Reuters:

Barclays employees agreed to manipulate the rates they submitted to the banking authority that oversees the daily Libor report for seemingly anyone who asked them to monkey with it: senior Barclays officials concerned that the bank would look weak if it reported too high a borrowing rate; interest rate swap traders trying to improve Barclays’ derivatives trading position; even former Barclays traders begging for favors. We’re talking naked, blatant manipulation. Here’s one exchange cited in the DOJ filing:

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Bix Weir ~ Who Says Crime Doesn’t Pay?

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Road To Roota | May 4 2012

Craig Donohue

A subscriber just sent me the compensation stats on our recently unemployed head of the CME Craig Donohue. Here’s his payout for 5 years of criminal silver market rigging from 2004-2009…

Best Boss Craig Donohue

2009 Total Compensation
$6.86 mil

5-Year Compensation Total
$43.60 mil

$47M for a 5 year crime spree assisting the silver manipulators run rampant over the free markets! I guess crime does pay.

Wait…he only made $3M last year and his “severance check” is only $770,000 so I guess crime STOPPED PAYING!

You can run “Craigy Boy” but you can’t hide. Watch for a high profile “perp walk” on this Bad Guy.

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Bill Moyers ~ The Best Congress the Banks’ Money Can Buy

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Bill Moyers & Michael Winship | Common Dreams | April 6 2012

Here we go again. Another round of the game we call Congressional Creep. After months of haggling and debate, Congress finally passes reform legislation to fix a serious rupture in the body politic, and the President signs it into law. But the fight’s just begun, because the special interests immediately set out to win back what they lost when the reform became law.

They spread money like manure on the campaign trails of key members of Congress. They unleash hordes of lobbyists on Capitol Hill, cozy up to columnists and editorial writers, spend millions on lawyers who relentlessly pick at the law, trying to rewrite or water down the regulations required for enforcement. Before you know it, what once was an attempt at genuine reform creeps back toward business as usual.

It’s happening right now with the Dodd-Frank Wall Street Reform and Consumer Protection Act — passed two years ago in the wake of our disastrous financial meltdown. Just last week, for example, both parties in the House overwhelmingly approved two bills that already would change Dodd-Frank’s rules on derivatives — those convoluted trading deals recently described by the chairman of the Commodity Futures Trading Commission as “the largest dark pool in our financial markets.”

Especially vulnerable is a key provision of Dodd-Frank known as the Volcker Rule, so named by President Obama after the former Federal Reserve Chairman Paul Volcker. It’s an attempt to keep the banks in which you deposit your money from gambling your savings on the bank’s own, sometime risky investments.

It will come as no surprise that the financial sector hates the Volcker Rule and is fighting back hard.

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Bix Weir ~ CDS Trader Comes Clean

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The Road to Roota | March 20 2012

The trillions of dollars worth of Greek CDS’s were “valued” yesterday by a mechanism totally and completely removed from the actual legal language in each individual CDS contract. Soon we will begin to hear who the winners and losers are but we know the first (and only) bank to declare so far was an Austrian bank that lost $1.3B. There will be many more to come and given the weakness in the Bank of America stock lately and the fact that they are the second largest CDS player in the world my guess is that “they’ll have some esplain’ to do” in the very near future.

As we sit and wait for the results and ramifications of the settlements to be declared a small time CDS trader has spoken out about the massively flawed instrument he has spent his life trading. He alone has traded “billions and billions” of these instruments and as they say in the movies….”Reality Bites!”

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Thomas R Eddlem ~ Goldman Sachs Reeling from Employee Charges, CFTC Fine

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The New American | March 16 2012

Goldman Sachs Corporation is facing a new wave of charges of not looking out for the interests of its clients this week, as one corporate vice president published a resignation March 14 letter in the New York Times and the company agreed March 13 to pay a $7 million fine to the Commodity Futures Trading Commission. Goldman Sachs stock took a hit on the two-pronged attack March 14, losing $2.2 billion in stock value with a three-percent plunge, though the stock recovered significantly the next day.

Goldman Sachs is Wall Street giant investment banking giant, with 33,000 employees, $28.8 billion in annual revenue and $4.4 billion in profit in 2011.

Former Goldman Sachs Vice President Greg Smith wrote in the March 14 New York Times that “I can honestly say that the environment now is as toxic and destructive as I have ever seen it.” Smith complained that the client’s interests had been “sidelined” to the corporate interests and that “When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.” Smith resigned as executive director of the firm’s United States equity derivatives business in Europe, the Middle East and Africa, a middle level position with the firm. “Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them,” Smith charged of the Goldman Sachs corporate culture.
Specifically, Smith charged that “I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all. It makes me ill how callously people talk about ripping their clients off.”

Greg Hunter ~ Is the Greek Debt Problem Really Solved?

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USA Watchdog | March 14 2012

Yesterday, a short but ominous press release was issued at the Commodities Futures Trading Commission.  It said, “At the request of CME Clearing Europe Limited (CMECEL), pursuant to Section 7 of the Commodity Exchange Act, the Commodity Futures Trading Commission issued an Order on March 13, 2012, vacating the registration of CMECEL as a derivatives clearing organization.”  In plain English, the Chicago Mercantile Exchange (CME) no longer wants to be the clearing house for European derivatives.   The derivatives market in Europe must have been very lucrative for the company.  After all, just the credit default swap (CDS) market is reportedly worth $50 trillion globally.  (A CDS is a form of insurance.  If there is a default, the debt is paid by the entity that sold the insurance contract.)  I ask myself, why would the CME willingly stop being the clearing house for this profitable and large market?

Just last week, it was reported there was a new Greek debt deal where 95% of the bondholders voluntarily agreed to take nearly a 75% loss on Greek debt.  CNBC reported, “Greece successfully closed its bond swap offer to private creditors on Thursday, opening the way to securing the funding it needs to avert a messy default on its debt, according to several senior officials. . . . The biggest sovereign debt restructuring in history will see bond holders accept losses of some 74 percent on the value of their investments in a deal that will cut more than 100 billion euros from Greece’s crippling public debt.”  Buried in the CNBC story was this little tidbit that said, “That would potentially trigger payouts on the credit default swaps (CDS) that some investors held on the bonds, an event which would have unknown consequences for the market.”  

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Bix Weir ~ MBF Clearing Is Sued by CFTC Over Claims Customer Funds Weren’t Segregated

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The Road to Roota | March 13 2012

Well here’s a shocker…

MBF Clearing Is Sued by CFTC Over Claims Customer Funds Weren’t Segregated

“MBF Clearing Corp. was sued by the Commodity Futures Trading Commission and accused of failing properly to segregate customer accounts from its own and of violating the Commodity Exchange Act”

“MBF employees from September 2008 to March 2010 deposited $30 million to $60 million in customer funds into a U.S. government money market fund at JPMorgan Chase & Co. without properly segregating them, the CFTC alleged today in a complaint in federal court in New York.”

A few comments [from Bix] on this one:

  1. This company is FINISHED. The moment that a Ponzi Scheme gets investigated everyone tries to get their money or METAL out. Then the doors shut. That’s what a “run” is all about.
  2. Just like MF Global customers of MBF will be crawling over themselves to get their hands on their commodity accounts and just like MF Global they will be stone walled. “Fool me once – shame on you…fool me TWICE – shame on me!” (I wonder if Gerald Celente had an account with these guys.)
  3. Clearly the CFTC is investigating ALL the riggers within the JP Morgan banking cabal as they are the ring leader. JP Morgan will be the final player to be “investigated” and thus will end the decades long manipulation of gold and silver.
  4. It is no coincidence that this lawsuit was filed directly on the heals of the Greek CDS’s being triggered. This is part of the PLANNED final battles.
  5. This is the first PROACTIVE action taken by the CFTC and it is a clear waring shot for all others running the global Ponzi scheme on the COMEX
  6. he timing of the “retirement” of the CEO of the COMEX, Craig Donohue, was related to this suit. He can run but he can’t hide!

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Robert Scheer ~ The Democrats Who Unleashed Wall Street and Got Away With it

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Nation Of Change | February 3 2012

That Lawrence Summers, a president emeritus of Harvard, is a consummate distorter of fact and logic is not a revelation. That he and Bill Clinton, the president he served as treasury secretary, can still get away with disclaiming responsibility for our financial meltdown is an insult to reason.

Yet, there they go again. Clinton is presented, in a fawning cover story in the current edition of Esquire magazine, as “Someone we can all agree on. … Even his staunchest enemies now regard his presidency as the good old days.” In a softball interview, Clinton is once again allowed to pass himself off as a job creator without noting the subsequent loss of jobs resulting from the collapse of the housing derivatives bubble that his financial deregulatory policies promoted.

At least Summers, in a testier interview by British journalist Krishnan Guru-Murthy of Channel 4 News, was asked some tough questions about his responsibility as Clinton’s treasury secretary for the financial collapse that occurred some years later. He, like Clinton, still defends the reversal of the 1933 Glass-Steagall Act, a 1999 repeal that destroyed the wall between investment and commercial banking put into place by Franklin Roosevelt in response to the Great Depression.

“I think the evidence is that I am right about that. If you look at the big players, Lehman and Bear Stearns were both standalone investment banks,” Summers replied, referring to two investment banks allowed to fold. Summers is very good at obscuring the obvious truth—that the too-big-to-fail banks, made legal by Clinton-era deregulation, required taxpayer bailouts.

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Bix Weir ~ Part 2 – Conversations with God About Gold and Silver

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Road To Roota | January 13 2012

[Bix Weir] *The following interview was conducted in a similar manner as was conducted in the best selling book series “Conversations With God” by Neale Donald Walsch.

Me: Are you still there God? It’s hard to hear you.

God: Yes, I am still here and always have been.

Me: God, everything seems so out of control. What is happening?

God: You are in the transition. You have chosen to experience this dynamic moment in the history of mankind. You have prepared mentally and spiritually and now you are ready.

Me: I’ve been ready for a LONG time now. When’s it all going to happen? When will we return to a Gold Standard like you promised?

God: I never promised…but it is what you have chosen to return to at this time.

Me: Why are you delaying? People around the world are in pain. The pain of hunger, the pain of debt, the pain of the homeless, the pain of manipulation… so much pain. When will it all stop?

God: You have chosen the time…and it is close.

Me: Why didn’t it end back in 2007 when the “Credit Crisis” hit? Why couldn’t you have ended it then?

God: There were still lessons you wanted to learn…you needed to learn. To understand the “goodness” of a Gold Standard you must first understand the “badness” of a Fiat Money Standard. Without understanding darkness you cannot understand the light. Without the knowledge of the bad you cannot understand the good.

Me: So was that it? We didn’t understand the inherent evil of fiat money so there was no way to return to an honest money?

God: Something like that. But in the past few years you have educated the masses and you soon will be ready to return to the good.

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How George Soros Ended Up With MF Global’s Client Money

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Peter Brandt | Factor

As the old saying goes, to find out what really happened you need to … “Follow the money trail”

A warning to former MF Global segregated account holders: If the news has already been more than you can bear, please do not read this post — it may really push you over the edge

While the congressional hearings have been interesting, at times shocking, at other times even quite entertaining, Congress has yet to connect the dots. So I will do it for them.

Soros

In short, when the dots are connected, a significant portion of the $1.2 billion (some say more, some say less) of segregated account money illegally stolen by Jon Corzine’s MF Global (with the CFTC driving the get-away car) has landed in the pockets of George Soros.

Let’s go through this step-by-step:

1. Jon Corzine figured out a brilliant trade in the European debt market.

While I won’t go into the details, Corzine would have made a fortune if the trade could have been held to maturity of the debt instruments. The money was NOT lost because Corzine made a bad trade.

2. Corzine leveraged the trade to the hilt. He had the trade on with uber leverage. In fact, MF Global ended up with a $6.3 billion trade.

3. The Greek and Italian bonds tanked (rates went higher) over concern about a possible default.

The spike in rates would not have affected the final profitability of Corzine’s trade, but did put the trade on margin call after margin call. MF Global used every last penny of cash reserves to meet the margin calls, knowing that if it could survive the margin calls the trade would have made money at maturity. MF Global was unable to secure additional loans to meet the margin calls because it was leveraged to the max on the trade it .

4. MF Global illegally took segregated customer funds out of J.P. Morgan to meet margin calls in an attempt to survive the trade. It was the legislated responsibility of the U.S. government to protect this from happening.

5. MF Global’s clients (without their knowledge or permission and as an illegal manuever) became the default counterparty to MF Global’s trade. This is a fact Congress has not yet figured out.

6. MF Global puked about $1.5 billion of the trade, but it filed for bankruptcy when it was finally unable to meet further margin calls.

The remaining $4.8 billion trade was taken over by KPMG LLP, MF Global’s bankruptcy administrator in London. REMEMBER FROM POINT #5 ABOVE, MF GLOBAL’S SEGREGATED CLIENTS REMAINED A COUNTERPARTY TO THE TRADE BY DEFAULT.

7. KPMG peddled perhaps half (or more) of the trade to George Soros. The actual amount reported was $2 billion, but at a discount.

Remember, this trade was a guaranteed winner at the maturity of the bonds, so Soros was locked into a profit. Also, with his deep pockets ,Soros knew he could withstand interim margin calls if necessary.

Final point #8: MF Global’s segregated account holders became the default counterparty to Soros’ trade.

The profits that Soros has locked in represent, in large part, the segregated money previously belonging to MF Global clients that had been safe and secure (at least that is what the CFTC’s responsibility was) at J.P. Morgan.

Let me conclude by emphasizing that George Soros did nothing illegal in this manuever. The great speculator/shark simply smelled blood in the water and had the money to buy a distressed trade that was a guaranteed winner.

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