A JPMorgan Chase & Co. (JPM) unit’s $100 million settlement with MF Global Inc. liquidators won court approval, paving the way for the return of more money to the failed brokerage’s former customers. The agreement will allocate $100 million for the return of customer property, according to an order entered today in bankruptcy court in Manhattan. The agreement resolves claims against JPMorgan arising from transfers of customer property in the days before MF Global entered bankruptcy, as well as its actions as one of the brokerage’s primary banks. “The motion is granted in all respects and the settlement agreement is authorized,” U.S. Bankruptcy Judge Martin Glenn said in the order. More on Bloomberg [...]
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Among the far-flung feeder funds, brokerage houses and institutions interconnected in the vast Ponzi scheme perpetuated by Bernard L. Madoff, one little-known local bank is now in the spotlight. Westport National Bank and its parent company, Connecticut Community Bank, is the type of Main Street bank found in Anytown U.S.A., rather than near Wall Street. It has one main office and nine affiliated branches, all within a small radius stretching from Fairfield to Greenwich. More in the New York Times [...] The highly compensated Wall Street spin machine never ceases to amaze me. Case in point: defending the indefensible Jon S. Corzine. As soon as the Commodity Futures Trading Commission sued the embattled former chairman and chief executive officer of MF Global Inc., the now liquidated brokerage, the spinmeisters mobilized. The CFTC’s gutsy June 27 lawsuit claimed that Corzine failed to “diligently supervise” MF Global and, as the firm’s “control person,” allowed lower-level employees to illegally use more than $1 billion of customer funds to try to stave off MF Global’s Halloween 2011 bankruptcy filing. In truth, Corzine is lucky he isn’t facing criminal charges for overseeing the demise of MF Global. Its creditors lost billions, and 3,000 employees lost their jobs. More on Bloomberg [...] A London trial brought by the liquidators of Bernard Madoff’s U.K. business to reclaim money from his family members and associates, on Wednesday heard testimony from Peter Madoff, his younger brother. Peter Madoff, who is serving a 10-year sentence in a U.S. federal prison for conspiracy and falsifying records, appeared as a witness for the liquidators via video link to a packed room at the Rolls Building in London. He invoked his Fifth Amendment rights on no less than 50 occasions. The civil case, which began at London’s Commercial Court three weeks ago, has been brought by Grant Thornton, the liquidators of Madoff Securities International Limited. Grant Thornton is seeking to reclaim about £33 million (about $50 million) on behalf of investors in the U.S. business Bernard L Madoff Investment Securities. More in the Wall Street Journal [...] The last time William Thompson ran for mayor, he promised to donate thousands of dollars from his campaign war chest to charity after the Daily News discovered that one of his biggest longtime donors was linked to Bernie Madoff. But four years later, Thompson not only hasn’t donated the money — he’s also pocketed even more campaign contributions from the Madoff-tainted financier Seymour Zises. Zises — who was sued by victims of the Ponzi schemer for secretly investing the majority of their money with Madoff — has given more than $21,000 to Thompson’s various campaigns over the years. When The News uncovered Zises’ link to Madoff four years ago, Thompson promised to give $4,950 from his campaign coffers to charity. More in the NY Daily News [...] The Securities and Exchange Commission recently qualified its longstanding policy that allowed companies to “neither admit nor deny” their guilt when settling cases. The policy tinkering has come in the wake of criticism by lawyers, academics and, most memorably, Judge Jed S. Rakoff of the United States District Court in Manhattan. These critics have argued that the public interest is not served when the agency settles cases and imposes sanctions without explaining to the public the basis for the penalty. It now appears that the agency agrees – sort of. “There may be certain cases,” it has concluded, “where heightened accountability or acceptance of responsibility through the defendant’s admission of misconduct may be appropriate, even if it does not allow us to achieve a prompt resolution.” More in the New York Times [...] The European Parliament narrowly rejected proposals to ban fund managers from receiving bonuses amounting to more than their annual salary amid warnings the plan could backfire by harming pensions and savings. Lawmakers in Strasbourg, France, defeated the proposal after some legislators argued that the measure would drive up fixed costs for asset managers and curtail returns. The proposed curbs were blocked by a margin of seven votes out of 695 cast. More on Bloomberg [...] Jill E. Sommers, the U.S. Commodity Futures Trading Commission member who oversaw the agency’s investigation into the collapse of MF Global Holdings Ltd., will step down from the agency next week. Sommers, one of two Republicans on the five-member panel, has served as a commissioner since 2007, spanning a period when the agency won new authority to regulate the swaps market and implement rules required under the Dodd-Frank Act. She will leave the agency on July 8, she said today. “It’s been a unique time at the commission, and I feel it’s been a great opportunity for me to be here,” Sommers, 44, said in a telephone interview. “I’m proud of what the agency has accomplished and hope to stay active in the industry.” More on Bloomberg [...] A U.S. judge tossed out on Tuesday a new rule requiring oil, natural gas and mining companies to disclose payments to foreign governments, in a blow to U.S. securities regulators and human rights groups. U.S. District Judge John Bates said the Securities and Exchange Commission erred in its interpretation of part of the 2010 Dodd-Frank Wall Street reform law that called for the rule and did not properly consider requests for relief. Proponents of the resource extraction rule, including international relief organization Oxfam America, say it would help combat corruption and wasteful spending in resource-rich nations. More on Reuters [...] If something happens, it is a truism that Jon Corzine didn’t prevent it. Alas, that is as true of World War II and the invention of the wine press as it is of MF Global’s misuse of customer money. That he didn’t stop it is the essence of the Commodity Futures Trading Commission complaint filed this week against Mr. Corzine over the 2011 failure of the commodity brokerage he once headed. Nor was he offered the usual chance to settle. The CFTC wants a jury trial, which means the case will now re-disappear from the news for months or years, convenient for many Democrats. This outcome certainly will not satisfy some who long for Mr. Corzine to be rung up on criminal charges. But the biggest mystery is why the CFTC complaint does so little to solve the biggest mystery. More in the Wall Street Journal [...] |
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