JPM has MF Global’s missing funds?
The mystery of the MF Global bankruptcy continues to be the location of the missing funds. Chris Whalen, senior managing director of Tangent Capital Partners, says the raiding of customer accounts at MF Global to make a margin payment to JPMorgan ruins customer trust in the broker-dealer relationship.
“Look, it’s very basic. In our industry, we have a legal responsibility to safeguard customer funds,” Whalen says. “It appears that the individual accounts of the commodity customers of MF Global were raided and they took those funds and made a margin payment to JPMorgan to try and save the business. Everybody in our business who works for a broker-dealer should be getting really angry about this because no customer is gonna trust an independent dealer to act as custodian for their securities; that’s gonna be over, between Madoff and this.”