By Jim Kharouf, Editor-in-Chief
There isn’t much left out of the June 4th report from MF Global Trustee James Giddens “Report of the Trustee’s Investigation and Recommendations.” It’s a thorough 181 page (275 if you count all the charts and graphs at the end) Titanic journey of MF Global under Jon Corzine’s leadership. While much has been made of the report’s focus on Corzine, as well as chief financial officer Henri Steenkamp and assistant treasurer Edith O’Brien, who often and ultimately sent money to various places, this report is most valuable for its recommendations at the end.
Giddens recommends a number of changes, among them, that customer funds should be segregated, “regardless of whether they are invested domestically or overseas.” He adds that for overseas investments, funds and assets “be segregated to the maximum extent provided for under the stricter of U.S. law and applicable foreign laws and regulations as a condition to allowing funds to be held abroad.”
This is designed to address the shell game MF Global was playing with customer funds that were invested in overseas markets, and thus given a lighter regulatory touch.