CNBC’s Rick Santelli talks with Mark Melin, Alternative Reality contributor and editor of Opalesque Futures Intelligence, about the SEC’s role in the MF Global investigation.
Melin says the SEC knew in May that “Corzine had sovereign debt exposure and they were the only people that knew.”
Credit where credit is due, here. Janet Tavakoli was talking back in November about the fact MF Global’s leveraged default and liquidity risk exposure to European sovereign debt was disclosed in a 10-K filing with the SEC for the year ending March 21, 2011. “The CFTC and other regulators had the information right under their noses, but it appears they didn’t understand that they were looking at a leveraged credit derivative transaction that could lead to margin calls that MF Global would be unable to meet,” Tavakoli wrote on the Huffington Post.
But Melin has more.
In August, three months after the SEC received MF Global’s 10-K, there was a $300 million bond offering floated to professional investors. None of those investors were told about or knew of MF Global’s European sovereign debt exposure, Melin has written, and he reiterated the point on Wednesday [Jan. 25].
“We should have transparency,” Melin says of the role of a regulator like the SEC in the case of a bond offering like MF Global’s. “Investors should be protected by regulators.”
Watch the whole rapid-fire interview: