MF Global brokers/dealers $1.2 billion missing!

Definition of segregation
Client Money Statement

As a regulated firm MF Global UK Limited (MF Global) offers "segregated" account facilities to its customers. If you hold a segregated account with MF Global this will mean that any money in your account with MF Global will be treated as "client money" for the purposes of the client money rules of the Financial Services Authority ("FSA"). These rules may be found in the FSA's Handbook of rules, in the business standards section which deals with client assets (CASS). The FSA Handbook is available online on the FSA's website; www.fsa.gov.uk.

In broad terms the client money rules require MF Global to act as trustee in respect of client money it holds and to ensure that such money is held separately from its own funds. The rules dictate where MFG may place client money and the steps MFG must take to ensure that the client money it places with third parties (e.g. MF Global's bankers) are held in suitable segregated facilities. These rules form an important part of the UK regulatory system, which is designed to protect consumers and other users of the financial services markets especially in the event of the failure of a regulated firm. If a regulated firm fails a Liquidator would not be able to utilise client money to meet the demands of the general creditors of that firm.

The client money rules only apply to cash and there are other rules which apply to non-cash assets you may hold with MF Global, for example the FSA's rules regarding custody arrangements.

In respect of certain products MF Global does not offer segregation and customers are asked to place funds and non-cash assets with MF Global as collateral. In these circumstances the customer's cash will be placed in a "non-segregated" account and will not be subject to the FSA's client money rules.

If you have any questions regarding the status of your account or the segregation of your funds, please contact your MF Global account handler.

Angelique wrote:AnnnaEsse

Thank you for these articles.

Is this not embezzlement ?

Panda wrote:It is embezzlement, Investors Money was used and one former Executive walked away with $478 million.!!! It appears Clients money was
used and not recorded in the Books.

AnnaEsse wrote:

Panda wrote:It is embezzlement, Investors Money was used and one former Executive walked away with $478 million.!!! It appears Clients money was
used and not recorded in the Books.

Gerald Celente, of the Trends Institute, has lost a five figure sum from what was supposed to be a segregated account, i.e., not available for the dealers/brokers to invest.