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February 7th, 2012
Commodities rose to the highest level in more than five months as the dollar declined after Federal Reserve Chairman Ben S. Bernanke said that the U.S. jobs market is far from healthy.
The Standard & Poor’s GSCI Index of 24 commodities gained 0.8 percent to 673.99 at 1:20 p.m. in New York, the highest level since Aug. 31.
Oil futures advanced as much as 2.3 percent after Bernanke’s comments sent the dollar to its lowest level against the euro since Dec. 12, making assets priced in the U.S. currency more attractive. Bernanke said in testimony prepared for the Senate Budget Committee that the U.S. has a long way to go before the jobs market operates “normally.” Gold, aluminum and copper also advanced.
“There’s general improvement in risk sentiment and strong weakness in the dollar,” said Nic Johnson, who helps manage about $30 billion in commodities at Pacific Investment Management Co. in Newport Beach, California. “Equities are higher, commodities are higher, so people are generally putting on risk.”
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February 3rd, 2012
Commodity Brokers – Orange-juice futures fell, heading for the biggest weekly drop since mid-August, as tests by the U.S. Food and Drug Administration for a banned fungicide in some domestic supplies indicated no health risk. Cotton rose.
The FDA said yesterday that nine of 14 samples contained carbendazim in concentrations of less than 80 parts per billion, a safety benchmark set by the government. The agency, which will conduct follow-up tests, said it “does not believe there is a need to continue” screening juice already in the U.S. A probe on imports still is under way. Futures headed for the first weekly decline since mid-December.
“A good chunk of the rally was because of this probe,” Jack Scoville, a vice president for Price Futures Group in Chicago, said in a telephone interview.
Orange-juice futures for March delivery declined 1.5 percent to $2.01 a pound at 9:58 a.m. on ICE Futures U.S. in New York. The price has dropped 4.7 percent this week. On Jan. 23, the commodity rose to a record $2.2695.
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January 26th, 2012
Commodity Brokers – MF Global (MFGLQ) Holding Ltd.’s clients may be the losers no matter who wins a $700 million dispute between bankruptcy administrators in London and New York that threatens the return of money locked in customer accounts.
The trustee of MF Global Inc., the New York brokerage unit, is seeking the return of money used as margin for American customers trading in Europe. It wants U.K. administrators KPMG LLP to tap into $1.2 billion it had set aside for customers with segregated accounts, which are supposed to be protected.
MF Global Inc. trustee James Giddens “is prepared to use all legal avenues available to him in recovering the customer funds, including litigation,” Kent Jarrell, a spokesman for Giddens, said in an e-mailed statement.
If successful, the trustee’s claim would significantly reduce KPMG’s client money pool and lower returns for U.K. customers, said two people with knowledge of the discussions who declined to be identified because they are confidential. Should KPMG win, U.S. customers will be treated as unsecured creditors and face a lengthy wait for any payout.
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January 12th, 2012
Commodity Brokers – One of the hottest debates raging from Wall Street to the farm belt is destined to stretch into next month, as the trustee overseeing the bankruptcy of broker MF Global Inc collects the final claims by customers who are missing some $1.2 billion – or, maybe, only half as much.
Once a Jan 31 deadline for customer claims comes and goes, trustee James Giddens plans to “sharpen” his longstanding estimate of a $1.2 billion “hole” in customer money. It’s an estimate that has been challenged, publicly or privately, by other agencies involved in the investigation who say the gap may be only half as large.
Some say the discrepancy is technical: Giddens’ estimate includes foreign funds, while others only include U.S. collateral, for instance. Other bankruptcy lawyers and advisors say it may be a case of Giddens, who is responsible for liquidating the brokerage and returning money to customers, managing expectations, hoping to keep anxious traders at bay until he can recover more funds.
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December 24th, 2011
President Barack Obama’s re-election campaign returned campaign contributions from Jon S. Corzine, former chairman and chief executive officer of MF Global Holdings Ltd., according to a Democratic official.
Obama for America and the Democratic National Committee refunded the money from the former New Jersey governor out of an abundance of caution, said the official, who requested anonymity. Republicans have criticized the president for keeping contributions from the head of a firm that collapsed and filed for bankruptcy.
Corzine, 64, and his wife, Sharon Elghanayan, each contributed $30,800 to the Democratic National Committee and $5,000 to Obama’s campaign, the maximum amounts that individuals are allowed to give, said the official. Corzine, who testified before a congressional panel about MF Global’s bankruptcy and $1.2 billion in missing customer funds, has been one of Obama’s top fundraisers this election cycle. In April, Corzine hosted a fundraiser for Obama at his Manhattan home.
Corzine was one of 41 donors who bundled more than $500,000 this year for Obama’s re-election effort, according to documents released by the campaign Oct. 14. So-called bundlers arrange for contributions from other people and funnel the money to campaigns.
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December 9th, 2011
Throughout more than two hours of congressional testimony, Jon S. Corzine was careful to invoke the idea of intent when asked how his failed brokerage, MF Global Holdings Ltd., came to lose track of as much as $1.2 billion in its clients’ money.
“I certainly would never intend to direct or have segregated funds moved,” Corzine said yesterday during his appearance before the House Agriculture Committee, testifying he didn’t know what happened to the missing money. “I am comfortable that certainly on my part there was no intention to violate segregation rules,” he told lawmakers at another point.
Corzine, responding to the first of three subpoenas from congressional committees investigating the collapse of his firm and the missing funds, defied the expectations of some analysts when he decided to answer questions and not resort to his right against self-incrimination. Lawyers said it was no surprise that he repeatedly focused on intent in his testimony.
The language Corzine used “is certainly an attempt to defuse any criminal responsibility,” said Stephen Braga, an attorney with Ropes & Gray LLP in Washington.
“Most crimes require a wrongful intent, and accordingly mistake is a defense to most crimes,” Braga said. “This testimony suggests an unintentional, mistaken occurrence, which would not be criminal. Whether that suggestion fits the facts or not remains to be seen.”
The 64-year-old former New Jersey governor and U.S senator, who hasn’t been accused of wrongdoing, spoke publicly for the first time since he resigned as chairman and chief executive officer of MF Global, which filed the eighth-largest U.S. bankruptcy Oct. 31.
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December 8th, 2011
James Giddens, the trustee overseeing the MF Global Inc. brokerage liquidation, defended a planned transfer of $2.1 billion to U.S. commodity customers after receiving 18 formal objections and 43 letters querying the move.
In the transfer, Giddens would pay out from 80 percent to 85 percent of all assets remaining in his control, keeping $800 million in reserve, according to his court filing yesterday. Two previous payouts to commodity customers totaled about $2 billion.
To deal with many of the objections, which “raise common concerns,” Giddens said he “made some language changes” in a proposed order he will ask the judge to sign approving the transfer. To satisfy administrators of MF Global’s U.K. and other foreign affiliates who objected that the transfer might deplete funds available to pay them, he would make future transfers based on available assets and not ask the judge to let him simply use his own discretion, he said in the filing.
“The trustee believes it would be more prudent, relieve uncertainty, and better inform the expectations of customers to make further bulk transfers, if any, only upon further motion and order of the court based on facts and circumstances and availability of property,” he said.
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November 23rd, 2011
Commodity Brokers- MF Global Inc. brokerage customers, who may be missing more than $1.2 billion from their accounts, won’t be allowed to form a committee to represent their interests in bankruptcy court, a judge ruled.
Customer accounts believed to hold $5.45 billion were frozen Oct. 31, the day after the New York-based company reported a shortfall in funds that are required to be segregated under rules of the U.S. Commodity Futures Trading Commission. A previous estimate of about $600 million in missing funds was raised to $1.2 billion yesterday by James Giddens, the trustee appointed to liquidate the company and distribute refunds to customers.
Judge Martin Glenn, overseeing a hearing today in Manhattan Bankruptcy court, said he will deny commodity customers’ request to form an official committee. He urged the trustee to work closely with commodities customers.
“With 38,000 customers, for them to have an effective voice, there needs to be some agreed organizational structure that will allow them to be heard by the trustee,” Glenn told a lawyer for the trustee. Glenn said there were no legal precedents that would let a bankruptcy court grant the official committee.
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November 17th, 2011
MF Global Holdings Ltd. (MF) moved hundreds of millions of dollars from its futures client accounts to its own securities brokerage before its Oct. 31 bankruptcy, according to person familiar with the audit of the company.
MF Global ran futures and securities brokerages and was required to segregate funds posted as collateral by futures clients. The company filed the eighth-largest U.S. bankruptcy after a wrong-way $6.3 billion trade on its own behalf on bonds of some of Europe’s most indebted nations.
The Commodity Futures Trading Commission, Securities and Exchange Commission and U.S. Justice Department are investigating cash movements at the firm before the bankruptcy filing. The CFTC has been probing about $600 million in futures client funds that disappeared as the firm prepared for bankruptcy. Regulators haven’t located the money.
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November 11th, 2011
MF Global Inc.’s workforce of 1,066 broker-dealer employees was fired as the failed brokerage closes its New York office and liquidates in an attempt to return assets to customers under the guidance of a trustee.
The broker-dealer, winding down since Oct. 31, will pay employees through Nov. 15, according to a statement today from the office of the trustee, James Giddens. As many as 200 former employees are being hired to assist in the liquidation of the broker-dealer, Giddens said.
Some employees of MF Global Inc., the broker-dealer unit of bankrupt MF Global Holdings Ltd., learned they were being fired from news reports, a person familiar with the matter said. The press release was distributed to and reported by the news media before all MF Global employees who were losing their jobs were notified, according to the person, who declined to be identified because they aren’t authorized to speak publicly on the firings
“We were well into the process of notifying employees and were attempting to personally reach as many employees as possible when the release went out,” said Kent Jarrell, a spokesman for Giddens.
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