| 00:00:12 |
Unidentified Speaker, -
CONGRESSIONAL INVESTIGATORS REVEALED THAT JON CORZINE DIRECTED THE FUNDS JUST BEFORE MF GLOBAL FILE BANKRUPTCY. FEDERAL INVESTIGATORS AND REGULATORS...
|
| 00:01:13 |
Unidentified Speaker, -
REMIND MEMBERS THAT
|
| 00:01:14 |
Unidentified Speaker, -
THE OPENING STATEMENTS SHOULD BE LIMITED TO 10 MINUTES AS PREVIOUSLY AGREED. THERE ARE MEMBERS THAT ARE NOT NECESSARILY ARE NOT A MEMBER OF THE OVERSIGHT...
|
| 00:03:49 |
Unidentified Speaker, -
WHO STOLE MONEY. IF SOMEONE STOLE MONEY COME OF THE JUSTICE DEPARTMENT WILL FIND THEM. I SEE OUR ROLE IS TRYING TO FIND OUT WHAT HAPPENED IN ORDER...
|
| 00:06:36 |
Unidentified Speaker, -
WAY. WE WORK FOR THE AMERICAN TAXPAYERS. WE OVERSEE MARKETS AND ENTITIES, AND I KNOW THAT HE'S TAKING THIS SERIOUSLY AS I DO. I THANK HIM FOR HIS REMARKS....
|
| 00:07:03 |
Unidentified Speaker, -
COMMEND YOU FOR THE SUBCOMMITTEES CAREFUL AND COMPREHENSIVE REVIEW OF THE FACTS. THIS BEING THE THIRD HEARING, THERE HAVE BEEN DOZENS OF ENTITIES REVIEWED,...
|
| 00:11:57 |
Unidentified Speaker, -
THE WITNESSES HERE TODAY FOR HELPING THIS COMMITTEE WITH ITS WORK. MR. CHAIRMAN, I BELIEVE IN MANY WAYS HE SHOULD BE GIVEN CREDIT FOR THE
|
| 00:12:03 |
Unidentified Speaker, -
ATTENTION YOU HAVE GIVEN TO THE COLLAPSE OF MF GLOBAL. I THINK WE CAN LEARN MANY LESSONS FROM THE COLLAPSE OF MF GLOBAL ABOUT THE ACCOUNTING TREATMENT...
|
| 00:14:25 |
Unidentified Speaker, -
FITZPATRICK. >> THANK YOU, MR. CHAIRMAN. HERE WE ARE IN HEARING THREE OF THE SERIES OF HEARINGS
|
| 00:14:34 |
Unidentified Speaker, -
INVESTIGATING MF GLOBAL. WE KNOW THROUGHOUT THE WEEK OF OCTOBER 24, MF GLOBAL LACKED CASH SEVERELY THAT LED TO BANKRUPTCY ON OCTOBER 31. IN THOSE CHAOTIC...
|
| 00:16:00 |
Unidentified Speaker, -
CUSTOMER'S COALITION THANKS ARE COMMITTEE FOR OUR WORK BE PART OF THE RECORD TODAY. >> WITHOUT OBJECTION. SO ORDERED. >> I WOULD LIKE TO YIELD NOW TO...
|
| 00:16:15 |
Unidentified Speaker, -
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| 00:16:18 |
Unidentified Speaker, -
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| 00:16:22 |
Unidentified Speaker, -
PORTION OF $1.6 BILLION THAT HAS GONE MISSING AT MF GLOBAL. THIS PAST WEEK WE LEARNED THAT THE CEO JOHN CORSON LIKELY WAS NOT THE INNOCENT BYSTANDER...
|
| 00:18:09 |
Unidentified Speaker, -
HALF. >> THANK YOU, MR. CHAIRMAN. THE CLEAR PROBLEM THAT AROSE HERE -- THE CLEAR
|
| 00:18:21 |
Unidentified Speaker, -
PROBLEM THAT MAY BANKRUPTCY THE ONLY OPTION FOR MF GLOBAL WAS THAT NO ONE COULD ACCOUNT FOR WHAT HAPPENED TO OVER $1 BILLION IN SEGREGATED FUNDS. AS...
|
| 00:19:26 |
Unidentified Speaker, -
NEW RULES WITH MUCH OF THE MANPOWER AT THAT AGENCY DEDICATED TO ENFORCING DOCTRINE. ACCORDING TO MR. O'MALLEY, CRACKS IN THE SYSTEM, AND IT HAS COST...
|
| 00:20:27 |
Unidentified Speaker, -
IS INTERESTING. I START OFF TRYING TO BE BIPARTISAN, AND THEN I JUST HEARD THAT THE DODD-FRANK BILL AND OBAMA
|
| 00:20:35 |
Unidentified Speaker, -
POSSUMS PROBLEM. I WOULD LIKE TO INVITE ANYONE WHO HAS ANY INFORMATION WHATSOEVER, THE JUSTICE DEPARTMENT, THE CFTC, ANYONE WHO HAS GIVEN MR. JON CORZINE...
|
| 00:21:26 |
Unidentified Speaker, -
CFTC. IT IS HIS OBSERVATION.
|
| 00:21:28 |
Unidentified Speaker, -
IT IS HIS OBSERVATION THAT SINCE THE DODD-FRANK ACT BECAME LAW, THE COMMISSION HAS ACTED IN THIS WAY. IT IS HIS OBSERVATION THAT HE HAS CONCENTRATED...
|
| 00:21:53 |
Unidentified Speaker, -
THAT QUESTION TO SEE IF THEY
|
| 00:21:58 |
Unidentified Speaker, -
THINK PUBLICLY ON THE RECORD THAT DODD-FRANK CAUSE THIS PROBLEM. IF YOU DID, I WILL SIMPLY AGREE WITH YOU AND SAY, GOOD JOB. BUT IF HE DOESN'T COME...
|
| 00:22:16 |
Unidentified Speaker, -
PANEL, LAURIE AND HENRY AND CHRISTIE, CHIEF FINANCIAL OFFICER OF NORTH AMERICA, AND EDITH O'BRIEN, ASSISTANT AFFAIRS OF MF GLOBAL. I WOULD RECOGNIZE...
|
| 00:23:03 |
Unidentified Speaker, -
MS. BARBER FOR THE OPENING STATEMENT. >> DISTINGUISHED MEMBERS OF THE SUBCOMMITTEE. >> I'M SORRY, CAN YOU PULL THAT CLOSER TO
|
| 00:23:24 |
Unidentified Speaker, -
YOU? >> MY NAME IS LAURIE FERBER TRADE
|
| 00:23:29 |
Unidentified Speaker, -
SINCE JUNE 2009, I HAVE SERVED AS THE GENERAL COUNSEL OF MF GLOBAL. SINCE
|
| 00:23:35 |
Unidentified Speaker, -
THE BANKRUPTCY FILING, I HAVE REMAINED WITH THE COMPANY TO ASSIST WITH THE BANKRUPTCY AND THE PROFESSIONALS TO MAXIMIZE THE VALUE OF THE MF GLOBAL...
|
| 00:24:25 |
Unidentified Speaker, -
GLOBAL, I SUPERVISE THE LEGAL AND COMPLIANCE FUNCTIONS. MY RESPONSIBILITIES INCLUDE
|
| 00:24:31 |
Unidentified Speaker, -
MANAGING LEGAL FUNCTIONS TO SUPPORT THE FIRM'S APPALLING BUSINESS, ADVISING THE BOARD AND SENIOR MANAGEMENT AND ASSISTING WITH MF GLOBAL'S RELATIONSHIPS....
|
| 00:28:14 |
Unidentified Speaker, -
TURN THESE MICS UP A
|
| 00:28:15 |
Unidentified Speaker, -
LITTLE BIT. >> IS
|
| 00:28:21 |
Unidentified Speaker, -
THAT BETTER? >> JUST. >> THANK YOU FOR THE OPPORTUNITY TO MAKE THIS STATEMENT. MY NAME IS
|
| 00:28:29 |
Unidentified Speaker, -
HENRI
|
| 00:28:30 |
Unidentified Speaker, -
STEENKAMP AND I'M
|
| 00:28:31 |
Unidentified Speaker, -
THE CHIEF OFFICER OF MF GLOBAL HOLDINGS LTD. THE POSITION I HAVE HELD SINCE APRIL 2011. LET IT BE SAID AT THE OUTSET THAT I'M SADDENED, UPSET AND FRUSTRATED...
|
| 00:31:28 |
Unidentified Speaker, -
AS A GENERAL MATTER, I WAS NOT INVOLVED WITH THE DETAILED SEGREGATED FUNDS IN THE COURSE OF MY DUTIES AS GLOBAL CFO, NOR WERE THE CONFLICTS OF SEGREGATION...
|
| 00:32:54 |
Unidentified Speaker, -
OCTOBER 27 AND ENDING WITH A DECISION TO FILE FOR BANKRUPTCY ON THE MORNING OF OCTOBER 31. AS I RECALL, ON SUNDAY, OCTOBER 30, WHEN A DEAL FOR THE ACQUISITION...
|
| 00:33:59 |
Unidentified Speaker, -
YOU TO DO THE SAME THING AND TILTED DOWN A LITTLE BIT. THERE YOU GO. TALK ABOUT IS YOU AS YOU CAN. I DON'T KNOW
|
| 00:34:06 |
Unidentified Speaker, -
WHAT'S GOING ON HERE. >> THANK YOU FOR THE OPPORTUNITY TO TESTIFY TODAY. MY NAME IS CHRISTINE. AT THE TIME OF THE EVENTS IN QUESTION, I WAS THE CHIEF
|
| 00:34:16 |
Unidentified Speaker, -
FINANCIAL OFFICER OF MF GLOBAL. THE FORMS -- THE FIRM'S NORTH AMERICAN DEALER. IN MY POSITION AS CFO OF MF GLOBAL INC., I WAS RESPONSIBLE FOR THE ACCOUNTING...
|
| 00:41:01 |
Unidentified Speaker, -
SUBCOMMITTEE, HELP USE YOUR BACKGROUND AND EXPERIENCE TO SOLVE A VERY SERIOUS MATTER, TO TRY TO FIND OUT EXACTLY,
|
| 00:41:11 |
Unidentified Speaker, -
YOU KNOW, WHAT HAPPENED AND HOW WE CAN KEEP THIS FROM HAPPENING AGAIN. WE ARE EXTREMELY DISAPPOINTED THE YOU HAD CHOSEN TO DO THAT. YOUR FIFTH AMENDMENT...
|
| 00:41:37 |
Unidentified Speaker, -
IMPORTANT KNOWLEDGE, AND I AM HOPEFUL THAT MAYBE AT SOME
|
| 00:41:39 |
Unidentified Speaker, -
POINT IN TIME YOU WILL RECONSIDER YOUR -- AND COME BACK AND TESTIFY BEFORE THIS COMMITTEE. BUT AT THIS TIME WITH UNANIMOUS CONSENT I AM GOING TO DISMISS...
|
| 00:42:10 |
Unidentified Speaker, -
QUESTION. AT THIS PARTICULAR POINT IN TIME , WE WILL RESET THE TIME AND BEGAN
|
| 00:42:18 |
Unidentified Speaker, -
QUESTION AND ANSWER AGAIN. ON 1028 MF GLOBAL TRANSFERRED TO HUNDRED MILLION DOLLARS FROM THE SEGREGATED ACCOUNTS AND SUBSEQUENTLY TRANSFERRED 175 MILLION...
|
| 00:43:12 |
Unidentified Speaker, -
GLOBAL UK LIMITED. AS I HAD TO STAND THE $175 MILLION WAS BEING TAKEN OUT OF CUSTOMERS SEGREGATION. THERE WAS TWO THINGS I WOULD HAVE LOOKED AT WITH...
|
| 00:44:25 |
Unidentified Speaker, -
NO? >> I HONESTLY DON'T KNOW WHAT ALL THE CIRCUMSTANCES WERE AROUND THAT TRANSACTION, BUT IT WOULD BE -- IF THE IMPACT WOULD HAVE PRODUCED
|
| 00:44:34 |
Unidentified Speaker, -
THE REGULATORY RULE, I DON'T BELIEVE THAT I WOULD HAVE APPROVED IT. >> KNOWING WHAT YOU KNOW TODAY WOULD YOU APPROVE THAT TRANSACTION, YES OR NO? >>...
|
| 00:44:47 |
Unidentified Speaker, -
YOU. YOU ARE AWARE OF AN E-MAIL
|
| 00:44:52 |
Unidentified Speaker, -
THAT
|
| 00:44:53 |
Unidentified Speaker, -
EDITH O'BRIEN DESCRIBED THIS HUNDRED AND $70 MILLION TRANSFER. IS IT NORMAL COURSE OF BUSINESS FOR THE CEO TO MAKE INSTRUCTIONS ON WIRING FUNDS? I...
|
| 00:45:23 |
Unidentified Speaker, -
MONEY? >> SYSTEM I BELIEVE THAT WOULD BE AN
|
| 00:45:25 |
Unidentified Speaker, -
UNUSUAL EVENT. >> THANK YOU FOR
|
| 00:45:31 |
Unidentified Speaker, -
THAT. ACCORDING TO THE CME ON THURSDAY , I REPRESENTATIVE SITS
|
| 00:45:38 |
Unidentified Speaker, -
YOU A LETTER. ALL OF THE MF GLOBAL SENIOR MANAGERS, AND IT STATED EFFECTIVE IMMEDIATELY IN THE EQUITY WITHDRAWALS FROM MF GLOBAL INCORPORATED MUST...
|
| 00:46:18 |
Unidentified Speaker, -
KNOW, EXACTLY WHAT I DID WITH IT. I KNOW IT -- I RECALL HAVING CONVERSATIONS WHERE PEOPLE WERE AWARE. >> DID YOU SEEK APPROVAL WHEN YOU MADE A HUNDRED...
|
| 00:46:40 |
Unidentified Speaker, -
MF GLOBAL UK? PRICKING THAT TRANSFER. >> I WAS NOT AWARE OF THAT TRANSFER BEFORE IT WAS MADE. I WOULD NOT KNOW THAT. >> SO IF -- YOU DON'T KNOW WHO
|
| 00:46:54 |
Unidentified Speaker, -
YOU DISSEMINATED THE INFORMATION TO, AND SO NOT EVERYBODY GET THE MEMO, IS THAT WHAT YOU -- >> AGAIN,
|
| 00:47:00 |
Unidentified Speaker, -
THE MEMO WENT DIRECTLY TO THE FINANCE PEOPLE. AND SO THE KEY
|
| 00:47:08 |
Unidentified Speaker, -
PEOPLE OPERATING THE TRANSFERS AND THINGS ARE ALL IN CHICAGO. I ASSUME IT WAS SHARED THERE, BUT I REALLY DON'T RECALL. >> YOU WERE THE CFO FOR THE...
|
| 00:47:30 |
Unidentified Speaker, -
YOUR TESTIMONY? >> THAT'S CORRECT. .. >>
|
| 00:47:39 |
Unidentified Speaker, -
WE SLOWLY EXPERIENCED THROUGHOUT THAT WEEK A DRASTIC CHANGE IN LIQUIDITY, AND WE EXPERIENCED IN THE LAST COUPLE OF DAYS SIGNIFICANT LIQUIDITY STRENGTH....
|
| 00:49:08 |
Unidentified Speaker, -
|
| 00:49:26 |
Unidentified Speaker, -
|
| 00:49:33 |
Unidentified Speaker, -
|
| 00:49:34 |
Unidentified Speaker, -
ON VACATION. SO HOW AM I SUPPOSED TO ASK YOU QUESTION IF NONE OF YOU APPARENTLY KNEW WHAT WAS GOING ON OR CLAIMED TO NOT KNOW WHAT WAS GOING ON. YOU...
|
| 00:50:42 |
Unidentified Speaker, -
DECIDING TO TRANSFER
|
| 00:50:45 |
Unidentified Speaker, -
CUSTOMERS FUNDS? IF NOT YOU, FINE. I READ YOUR TESTIMONY. WHO? >> THE TRANSFERS OF CUSTOMER FUNDS WOULD BE -- THE AUTHORITY WOULD BE REGULATED IN
|
| 00:51:01 |
Unidentified Speaker, -
EACH ENTITY. IN CHICAGO -- >> WHO WOULD THAT BE? >> WOULD BE BETWEEN THE FINANCE TEAM, CHRISTINE
|
| 00:51:10 |
Unidentified Speaker, -
STEEN, MS. O'BRIEN'S TEAM SPIRIT THAT
|
| 00:51:13 |
Unidentified Speaker, -
IS WHAT I READ IN THE REPORT. SIR, YOU HAVE THE AUTHORITY? DID YOU HAVE THE AUTHORITY TO TRANSFER CUSTOMER FUNDS? CEMENT I DID NOT HAVE THE AUTHORITY...
|
| 00:51:50 |
Unidentified Speaker, -
TO? WHO IN THE TREASURY GROUP WOULD BE THE MAIN PEOPLE FOR MAKING THAT DECISION? >> MAKING THE DECISION TO? >> TO CUSTOMER -- TO TRANSFER CUSTOMERS FUNDS....
|
| 00:52:04 |
Unidentified Speaker, -
GLOBAL TREASURE.
|
| 00:52:06 |
Unidentified Speaker, -
EDITH O'BRIEN AND [INAUDIBLE] >>
|
| 00:52:09 |
Unidentified Speaker, -
I HAVE NOT YET SEEN A CORPORATE ORGANIZATIONAL TABLE FOR MF GLOBAL. I UNDERSTAND THERE WERE 50 OR 80 DIFFERENT COMPANIES.
|
| 00:52:18 |
Unidentified Speaker, -
IT WILL BE TO FUN TO TRY TO READ IT. OF ALL THE PEOPLE THAT ARE GOING TO SHOW UP ON THE CORPORATE LADDER, I'M WILLING TO BET THAT EDITH O'BRIEN WILL...
|
| 00:53:05 |
Unidentified Speaker, -
OF YOU DID IT. APPARENTLY NONE OF YOU DID ANYTHING WRONG BUT THERE IS $1 BILLION MISSING. HERE'S WHAT YOU SHOULD BE CONCERNED WITH. NOT US. WE ARE NOT...
|
| 00:53:47 |
Unidentified Speaker, -
PROBLEMS AROSE. BUT I READ YOUR TESTIMONY CRACKLY? ARE YOU ALL STILL WORKING THEIR? >> I AM NO LONGER WORKING THERE AND. >> I WILL ASK YOU MR. STEENKAMP....
|
| 00:54:02 |
Unidentified Speaker, -
BONUSES. ARE YOU PART OF THOSE
|
| 00:54:04 |
Unidentified Speaker, -
BONUSES? >> AS FAR AS I AM AWARE, THERE HAS BEEN NO DECISION MADE ON BONUSES SO I HAVE
|
| 00:54:14 |
Unidentified Speaker, -
WELL-PAID EMPLOYEES OF A MAJOR COMPANY THAT HAS MISPLACED OR MISAPPROPRIATED $1 BILLION OF CUSTOMER FUNDS, AND YET YOU'RE ASKING -- MAYBE NOT YOU,...
|
| 00:54:59 |
Unidentified Speaker, -
IS APPROPRIATE, GENERAL COUNSEL? >> MY FOCUS RIGHT NOW IS
|
| 00:55:06 |
Unidentified Speaker, -
ON HELPING THE TRUSTEE. IT IS HIS RESPONSIBILITY TO MANAGE THE ESTATE AND RETAIN EMPLOYEES
|
| 00:55:13 |
Unidentified Speaker, -
AND EVERYTHING ELSE. >> THAT IS FAIR ENOUGH. I APPRECIATE YOUR CONSISTENCY AND HAVING NOTHING TO ADD TO THIS DISCUSSION. AGAIN, AS I SAID AT
|
| 00:55:22 |
Unidentified Speaker, -
THE BEGINNING, I WAS NOT SURE WHAT QUESTIONS I COULD ASK THAT THE INFORMATION, AND APPARENTLY WE HAVE SPENT SIX MINUTES AND DONE JUST THAT. >> I THINK...
|
| 00:55:39 |
Unidentified Speaker, -
SPEED -- >> MR. STEENKAMP, DID YOU ON SUNDAY, OCTOBER 30, OR ANY DAY FOR THAT MATTER, INSTRUCT ANYONE AT MF GLOBAL TO CONTACT
|
| 00:55:51 |
Unidentified Speaker, -
ANYONE ON THE SEGREGATED DEFICIENCY? >> I HAVE NO MEMORY OF INSTRUCTING ANYONE TO HOLD OFF. >> YOU HAVE NO MEMORY OF
|
| 00:56:02 |
Unidentified Speaker, -
INSTRUCTING ANYONE? >> YOU STATE ON PAGE THREE
|
| 00:56:06 |
Unidentified Speaker, -
OF YOUR TESTIMONY THAT ON SATURDAY, I WAS INITIALLY TOLD THAT THE SEGREGATION AND SECURED
|
| 00:56:13 |
Unidentified Speaker, -
STATEMENT FOR FRIDAY SHOW THE FIRM TO BE UNDER SEGREGATED WHO TOLD YOU THAT? >> SOMEONE ON OUR STAFF, I BELIEVE. I DO NOT RECALL WHO THE PERSON WAS,...
|
| 00:56:31 |
Unidentified Speaker, -
CLOSER. >> SOMEONE ON MY STAFF. >> SOMEONE ON YOUR STAFF? >> ON THE FINANCE TEAM. >> AND WHO WAS
|
| 00:56:38 |
Unidentified Speaker, -
THAT? >> I DO NOT CALL UP IT WAS REGULATORY
|
| 00:56:40 |
Unidentified Speaker, -
CONTROL WHERE THE
|
| 00:56:41 |
Unidentified Speaker, -
CON
|
| 00:56:45 |
Unidentified Speaker, -
|
| 00:56:46 |
Unidentified Speaker, -
CONTROLLER. >> IT WAS A PRETTY SIGNIFICANT PIECE OF INFORMATION THAT YOU RECEIVE WHEN YOU RETURN FROM YOUR VACATION. YOU DON'T REMEMBER WHO TOLD YOU...
|
| 00:56:56 |
Unidentified Speaker, -
SIGNIFICANT DEFICIENCY? >> ORIGINALLY WHEN THE TRUCK ELATION WAS DONE ON SATURDAY MORNING, ISSUED A DEFICIENCY. MY DEPARTMENT WAS ASSURED BY THE TREASURE...
|
| 00:57:06 |
Unidentified Speaker, -
OR RATHER, TREASURY OPERATIONS GROUP, THAT THERE WAS AN ISSUE TO BE RESOLVED. THEY WERE SPENDING THAT SATURDAY AFTERNOON TO DO JUST THAT. ON THE MORNING...
|
| 00:58:07 |
Unidentified Speaker, -
THE CME, WHO WAS ON THE PREMISES, AND I BELIEVE CONTACTING EITHER MY COLLEAGUES IN NEW YORK AT THAT POINT. >> WAS AT THAT SATURDAY? >> NO, THAT WAS...
|
| 00:58:29 |
Unidentified Speaker, -
VERY LATE HOURS OF
|
| 00:58:31 |
Unidentified Speaker, -
SUNDAY, OCTOBER 30. >> SO YOU WOULD HAVE WAITED APPROXIMATELY TWO DAYS TO LET ANYONE THAT CME KNOW ABOUT THE DEFICIENCY? >> I DID NOT BELIEVE IT WAS...
|
| 00:58:42 |
Unidentified Speaker, -
POINT. WE BELIEVED, AS I MENTIONED, IT WAS INCONCEIVABLE TO ME THAT THE
|
| 00:58:48 |
Unidentified Speaker, -
FIRM COULD BE UNDER SEGREGATED BY THAT SUBSTANTIAL AMOUNT. >> BUT IT WAS IN FACT DEFICIENT BY THAT SUBSTANTIAL AMOUNT,
|
| 00:59:01 |
Unidentified Speaker, -
CORRECT? .. APPARENTLY JPMORGAN SENT THREE DRAFTS OF THAT LETTER ASKING THEM TO COME FROM THE TRANSFORMS FOR PROPER. IS THE CORRECT? >> I BELIEVE SO....
|
| 00:59:59 |
Unidentified Speaker, -
|
| 01:00:02 |
Unidentified Speaker, -
LETTER? >> WERE YOU TOLD ANYBODY REFUSE TO SIGN THE LETTER. YOU HAVE NO INFORMATION OF ANYBODY AT MF
|
| 01:00:11 |
Unidentified Speaker, -
REFUSING TO SIGN, CORRECT? >> WE HAVE TO FOCUS ON WHICH VERSION OF A LETTER? FOOT THE FIRST LETTER WAS ASKING ONE INDIVIDUAL
|
| 01:00:21 |
Unidentified Speaker, -
TO CONFIRM THAT EVERYTHING HAS EVER BEEN DONE IN THE HISTORY OF THOSE ACCOUNTS AND WOULD BE DONE IN THE FUTURE WITH THE COMPLIANCE OF THE RULES, AND...
|
| 01:01:20 |
Unidentified Speaker, -
YOU TELL HER IT NEEDED TO BE SIGNED? >> CERTAINLY THAT WAS
|
| 01:01:26 |
Unidentified Speaker, -
THE SUBSTANCE
|
| 01:01:27 |
Unidentified Speaker, -
OF THE CONVERSATION. >> WHAT WAS HER RESPONSE? >> I UNDERSTOOD THEIR FOCUS
|
| 01:01:33 |
Unidentified Speaker, -
ON THOSE
|
| 01:01:38 |
Unidentified Speaker, -
TRANSACTIONS, AND
|
| 01:01:40 |
Unidentified Speaker, -
THE TRANSACTIONS SHE WOULD SIGN IT. >> MR. LYNCH IS RECOGNIZED FOR FIVE MINUTES. >> THANK YOU, MR. CHAIRMAN. HOW IMPORTANT IS IT FOR YOUR FIRM, FOR...
|
| 01:01:57 |
Unidentified Speaker, -
GLOBAL TO PROTECT CLIENT
|
| 01:02:00 |
Unidentified Speaker, -
FUNDS? >> IT IS A CRITICAL ACCOMMODATION. >> MS. WILLIAMS, QUESTION, HOW IMPORTANT IS IT THAT YOU PROTECT CLIENT FUNDS, IS THAT A PERIPHERAL RESPONSIBILITY...
|
| 01:02:09 |
Unidentified Speaker, -
|
| 01:02:12 |
Unidentified Speaker, -
|
| 01:02:22 |
Unidentified Speaker, -
|
| 01:02:30 |
Unidentified Speaker, -
AND THAT WHOLE REASON FOR A SEGREGATED ACCOUNT IS TO PROTECT THE CLIENTS' MONEY. >> IT'S ABSOLUTELY DISGRACEFUL WHAT HAS HAPPENED HERE AND IT'S DISGRACEFUL...
|
| 01:03:21 |
Unidentified Speaker, -
VACATION IT WAS A NEW YORK I WAS DOING OF A GLOBAL THING. IT'S NOT BELIEVABLE, AND FORGOT TO TELL YOU PROTECTING FARMWORKERS, FAMILIES THAT INVESTED...
|
| 01:04:55 |
Unidentified Speaker, -
IT IS INGRAINED -- >> THE CENTRAL RESPONSIBILITY YOU DON'T KNOW? >> HOW THEY ARE TAGGED IN THE BANK ACCOUNT, NO, I DO NOT KNOW. I KNOW THEY NEED TO...
|
| 01:05:07 |
Unidentified Speaker, -
THE BANK ACCOUNT THAT IS
|
| 01:05:10 |
Unidentified Speaker, -
AS CUSTOMER SEGREGATED FUNDS ACCOUNT. >> ANY OF MEDIA ON THIS IF WE ARE RULE 123 ALLOWS THE FIRM TO MINGLE WITH THE FUNDS TO PUT A BUFFER IN THAT...
|
| 01:05:26 |
Unidentified Speaker, -
ALONG WITH CUSTOMER FUNDS THAT ARE SEGREGATED HOW DO YOU TAG OF THE FUNDS AND DISTINGUISHED THEM FROM CUSTOMER SEGREGATED FUNDS? >> IF I MAY FOR A MOMENT...
|
| 01:05:49 |
Unidentified Speaker, -
FUND. >> HOW ABOUT YOU JUST ANSWER MY QUESTION? >> JUDGING ON THE OTHER RESPONSES SINCE I SAT DOWN HERE SOME
|
| 01:05:59 |
Unidentified Speaker, -
TIME AGO THE DECLARATION OF THE FIFTH
|
| 01:06:02 |
Unidentified Speaker, -
AMENDMENT WAS MORE HELPFUL TO THIS COMMITTEE THAN ANY OF YOUR ANSWERS. SO I DON'T WANT YOU GOING OFF ON ANY LONG EXPLANATION BECAUSE BASED ON EVERYTHING...
|
| 01:06:50 |
Unidentified Speaker, -
COAMING GOLD WITH A SECURED SEGREGATED FUND TO REDUCE THE MIX OF ITS INDISTINGUISHABLE. >> IT'S JUST A BALANCED, THE BALANCE OF THE SEGREGATED FUNDS,...
|
| 01:07:07 |
Unidentified Speaker, -
IS NO ABILITY ONCE THE FUND IS IN THERE TO DISTINGUISH IN THE ACID FROM ANOTHER. >> WE WOULD TRACK THE INVESTMENT IN THE EXCESS SEGREGATED FUND ON A...
|
| 01:07:26 |
Unidentified Speaker, -
OF THE FUND, YOU COULD TAKE SECURITIES THAT REPLACED BY CUSTOMERS OR
|
| 01:07:34 |
Unidentified Speaker, -
YOU COULD TAKE SECURITIES BASED ON THE COMPANY'S DEPOSIT. >> I'M TRYING TO FIGURE A WAY TO PREVENT THIS FROM HAPPENING AGAIN. I THINK THERE IS
|
| 01:07:54 |
Unidentified Speaker, -
A LOOPHOLE THAT THIS IS A SITUATION WHERE THE REGULATION THAT'S IN PLACE HASN'T PROTECTED THESE PEOPLE HAVING $1.6 BILLION STOLEN OUT OF THEIR ACCOUNT,...
|
| 01:08:42 |
Unidentified Speaker, -
THAT IS INAPPROPRIATE TERM? >> I DON'T KNOW HOW TO DESCRIBE IT THREE >> THEY PUT THE MONEY THERE AND THEY CAN'T GET IT
|
| 01:09:06 |
Unidentified Speaker, -
BACK. IS THAT WITH THE DEFINITION IS OF
|
| 01:09:10 |
Unidentified Speaker, -
ROB? >> THIS IS MAGNIFICENT. >> ONE OF THE HIGHEST PAID LAWYERS IN THE COUNTRY. BONNIE AND
|
| 01:09:22 |
Unidentified Speaker, -
|
| 01:09:24 |
Unidentified Speaker, -
CLYDE. YOU HAVE PEOPLE SAID THINGS ELECTRONICALLY AND NOBODY IS RESPONSIBLE AND YOU CAN'T EVEN DECLARE THAT WAS ROBBED OR STOLEN. >> YOU SEEM ALARMED...
|
| 01:09:48 |
Unidentified Speaker, -
ALARMED? WE'VE GONE THROUGH THE 24 HOURS. WEDNESDAY IT DIDN'T RECONCILE AND YOU ARE A LITTLE BIT ALARMED. WHY WERE YOU ALARMED? >> I WAS ALARMED WHEN...
|
| 01:10:08 |
Unidentified Speaker, -
WOULDN'T HAVE DONE IT. WHY WOULD YOU NOT HAVE PROVEN THAT? >> WHY WOULD
|
| 01:10:13 |
Unidentified Speaker, -
I HAVE NOT PROVED IT? >> BASED ON THE PREVIOUS DAY OF INFORMATION I HAD. >> IS IT RIGHT
|
| 01:10:21 |
Unidentified Speaker, -
OR WRONG I GUESS THAT IS BINDING YET. IS IT RIGHT TO TAKE THE MONEY BY THE END
|
| 01:10:26 |
Unidentified Speaker, -
OF THE DAY? IS
|
| 01:10:29 |
Unidentified Speaker, -
IT ILLEGAL? >> IF IT WAS UTILIZED IN CUSTOMER FUNDS. ESTIMATE IS IT ILLEGAL TO HOLD IT OVER NIGHT? OR TO HOLD IT FOR YOUR? IS IT ILLEGAL TO
|
| 01:10:42 |
Unidentified Speaker, -
TAKE CUSTOMER FUNDS AND SHORE UP THE SINKING SHIPS PER YEAR? >> I DON'T KNOW WHAT WAS DONE -- >> I'M NOT ACCUSING YOU. I KNOW WHAT'S DONE TO READ YOU...
|
| 01:11:01 |
Unidentified Speaker, -
ALARMING OVER WHAT
|
| 01:11:03 |
Unidentified Speaker, -
YOU USE IF I WAS PRESENTED WITH A REQUEST TO APPROVE $175 MILLION. >> WEAKNESS WE'VE MISSED THE DEADLINE. WAS IT A LEGAL DEADLINE WHAT THE DEADLINE?...
|
| 01:11:27 |
Unidentified Speaker, -
STEALING OR NOT. ESTIMATE OF THE UNDERSTAND WE WERE TALKING ABOUT TWO DIFFERENT ITEMS. BUT MY REFERENCE IN THE WRITTEN TESTIMONY WITH RESPECT TO THE...
|
| 01:12:29 |
Unidentified Speaker, -
LAW FOR 75 YEARS AND THE TESTIMONY IS INCORRECT?
|
| 01:12:34 |
Unidentified Speaker, -
SO, YOU STILL GOT THE FUNDS BASICALLY YOU'VE TAKEN THEM
|
| 01:12:37 |
Unidentified Speaker, -
AND SOLD -- RIDGELY THE 1.6 BILLION IS STILL NOT AGAINST THE LAW BUT YOU DID WHAT WAS FAIR AND SQUARE. IS THAT RIGHT? >> FAIR AND SQUARE. I'M HEARING...
|
| 01:12:54 |
Unidentified Speaker, -
OKAY? >> YOU TOOK THE MONEY AND YOU'RE SUPPOSED TO GIVE IT BACK IF THEY WANT IT. IF I CAN'T GET MY MONEY BACK TO THE BANK THE BANK HAS TAKEN
|
| 01:13:07 |
Unidentified Speaker, -
IT TO ME. IT CAN'T GET MY MONEY BACK THE BANK IS TAKEN. THEY PUT THE MONEY WITH YOU AND THEY CAN'T GET IT BACK. IS THAT RIGHT OR WRONG. ESTIMATE THE...
|
| 01:13:44 |
Unidentified Speaker, -
THE LAW. NOW WE CAN'T REALLY DECLARE THIS IS REASSURING TO THE AMERICAN PEOPLE WHO MIGHT WANT TO KNOW THAT THE MONEY THEY'RE PUTTING IN THE SAFEKEEPING...
|
| 01:14:27 |
Unidentified Speaker, -
FOR FIVE MINUTES. >> THANK YOU VERY
|
| 01:14:31 |
Unidentified Speaker, -
MUCH, MR. CHAIRMAN. I WAS TALKING HERE ABOUT SOME OF THE ACCOUNTS THAT I'VE
|
| 01:14:38 |
Unidentified Speaker, -
READ IN THE NEWSPAPER THERE HAS BEEN AN ATTEMPT TO DESCRIBE, CUSTOMER ACCOUNTS AS OPPOSED TO OTHER ACCOUNTS, AND I SUPPOSE. ESTIMATE IT WAS KEPT IN...
|
| 01:15:53 |
Unidentified Speaker, -
MOVEMENTS. >> DO YOU KNOW ABOUT THE DETAILS OF WHAT ACCOUNTS ARE OFFICIAL ACCOUNTS OF THE COMPANY, ONE, TWO, THREE, FOUR, TEN, 15, D YOU KNOW
|
| 01:16:07 |
Unidentified Speaker, -
THAT MUCH? >> THEY WERE OBVIOUSLY ACCOUNTS THAT WERE HELD IN THE HOLDING COMPANY. THOSE ACCOUNTS ARE VERY DIFFERENT THAN THE
|
| 01:16:18 |
Unidentified Speaker, -
SEPARATE ACCOUNTS THAT ARE HELD IN EACH OF THE REGULATED ENTITIES. IN MY ROLE I WASN'T INVOLVED IN THE DETAIL OF THOSE ACCOUNTS WHICH ARE MANAGED BY...
|
| 01:16:51 |
Unidentified Speaker, -
YEAR AND A TEST THAT YOU'RE CERTIFICATIONS ARE INACCURATE, THEN YOU KNOW THAT YOU'RE NOT -- WHEN YOU KNOW YOU'RE NOT, YOU CAN FACE CIVIL AND CRIMINAL...
|
| 01:17:53 |
Unidentified Speaker, -
PENALTIES COMES WITH THAT MY QUESTION IS WERE YOU CONFIDENT THAT YOUR INTERNAL CONTROLS WERE ADEQUATE AT THE TIME YOU SIGN THEM AT EACH QUARTER IN? YOU...
|
| 01:18:16 |
Unidentified Speaker, -
SHOULDN'T SIGN THAT. ESTIMATES OF WHAT YOU ARE TELLING US IS YOU ARE NOT CONFIDENT THAT THERE WERE INTERNAL CONTROLS THAT WERE ADEQUATE AT THE TIME...
|
| 01:18:45 |
Unidentified Speaker, -
OF THE TIME OF MY FINDING. >> ANOTHER IS PAID TO THE QUESTION OF WHY MS GLOBAL PRICE WATERHOUSE GAVE THE COMPANY
|
| 01:18:56 |
Unidentified Speaker, -
A CLEAN
|
| 01:18:57 |
Unidentified Speaker, -
REPORT IN THE INTERNAL CONTROLS TURN OUT TO BE COMPROMISED FOR THEM TO LOSE 1.6 BILLION IN CUSTOMER FUNDS TO THE BEST OF YOUR KNOWLEDGE DID THEY EVER...
|
| 01:19:27 |
Unidentified Speaker, -
THE CONTROLS. IT'S THE BEST OF MY MEMORY NOTHING CAME UP DURING MY TIME THAT INDICATED AN ISSUE WITH SEGREGATION OF CLIENT MONEY IS. >> SO BASICALLY...
|
| 01:19:50 |
Unidentified Speaker, -
CLEAN REPORT WHEN THE INTERNAL CONTROLS TURN OUT TO BE COMPROMISED TO LOSE 1.6 BILLION DO YOU THINK THAT PRICE WATERHOUSE WAS INCOMPETENT IN DOING...
|
| 01:20:22 |
Unidentified Speaker, -
HAVE CONFIDENCE IN
|
| 01:20:29 |
Unidentified Speaker, -
THE AUDITOR? YOU HAVE TO FEEL THAT YOUR AUDITOR IS COMPETENT AND ACTING PROPERLY AND THAT YOU HAVE NO REASON TO QUESTION THEM. ESTIMATE IS PERFORMED...
|
| 01:21:01 |
Unidentified Speaker, -
YOU MR. CHAIRMAN. THESE ARE GOING TO BE EASY QUESTIONS. WHEN WE HAD THE OPPORTUNITY
|
| 01:21:08 |
Unidentified Speaker, -
TO QUESTION MR. COURTS LINE, I WAS ADVISED AND SHOCKED QUITE FRANKLY THAT HE HAD NOT YET APPARENTLY BEEN INTERVIEWED BY THE DEPARTMENT OF JUSTICE OR...
|
| 01:21:39 |
Unidentified Speaker, -
THE MOMENT. >> DON'T KNOW IF YOU'RE MUMBLING OR IF I DON'T HEAR GOOD, BUT IS THAT A YES OR NO? >> YOU
|
| 01:21:48 |
Unidentified Speaker, -
HAVEN'T FACED ANY INVESTIGATORS YET? >> I HAVE NOT. >> I HAVE. >> YOU TALK TO THEM
|
| 01:21:56 |
Unidentified Speaker, -
FACE-TO-FACE? >> YES, I HAVE. ESTIMATE HOW LONG AGO? >>
|
| 01:22:00 |
Unidentified Speaker, -
I'VE SPOKEN TO
|
| 01:22:01 |
Unidentified Speaker, -
THEM TWICE. >> WHAT DO YOU THINK WAS THE MOST COMPELLING QUESTION OR A LINE OF QUESTIONS THAT THEY HAVE? >> THERE WERE A LOT OF QUESTIONS AND TOPICS DISCUSSED...
|
| 01:22:02 |
Unidentified Speaker, -
|
| 01:22:04 |
Unidentified Speaker, -
|
| 01:22:09 |
Unidentified Speaker, -
|
| 01:22:10 |
Unidentified Speaker, -
|
| 01:22:22 |
Unidentified Speaker, -
|
| 01:22:33 |
Unidentified Speaker, -
|
| 01:22:39 |
Unidentified Speaker, -
|
| 01:22:46 |
Unidentified Speaker, -
|
| 01:23:01 |
Unidentified Speaker, -
THE PEOPLE -- >> IT'S STILL TOO EARLY IN
|
| 01:23:06 |
Unidentified Speaker, -
THE BANKRUPTCY PROCESS. THAT'S WHY WE ARE TRYING TO WORK AND MAXIMIZE
|
| 01:23:13 |
Unidentified Speaker, -
ITS FURIOUS CONNECT WHO DO YOU THINK IS MOST AT FAULT FOR INVESTORS LOSING MONEY FROM AN ACCOUNT THAT WAS SUPPOSED TO BE SEGREGATED? >> BECAUSE I DON'T...
|
| 01:23:40 |
Unidentified Speaker, -
THE QUESTION, SIR? >> THERE WAS A TERRIBLE FAILURE HERE OF SOME KIND, BUT WHAT IT WAS, I DON'T KNOW,
|
| 01:23:49 |
Unidentified Speaker, -
SINCE THE OF CONTROLLED
|
| 01:23:51 |
Unidentified Speaker, -
THE INVESTIGATION AND ALL INFORMATION SINCE OCTOBER OCTOBER 31. >> GOOD ANALOGY IS A GAMBLER IS THAT A CASINO AND IF THE CASINO DOESN'T PROVIDE MORE...
|
| 01:24:04 |
Unidentified Speaker, -
HE CAN'T JUST REACHED OVER THE TABLE AND TAKE SOMEBODY ELSE'S CHIPS. IF HE DID, HE WOULD BE IN HANDCUFFS QUICKER THAN YOU CAN SAY SEGREGATED ACCOUNTS....
|
| 01:24:29 |
Unidentified Speaker, -
KNOW. >> TO BE THE EXPERTS A
|
| 01:24:32 |
Unidentified Speaker, -
COMPANY DECIDES THAT MF GLOBAL THERE IS A HELL OF A LOT
|
| 01:24:37 |
Unidentified Speaker, -
YOU DON'T
|
| 01:24:40 |
Unidentified Speaker, -
KNOW. IF YOU WANT TO GIVE MORE INSIGHT CRACKS. ESTIMATE THAT'S EXTRAORDINARILY BROAD. >> TAKE A SHOT AT IT. >> LOOK, WE ARE TALKING ABOUT WHAT HAPPENED...
|
| 01:25:30 |
Unidentified Speaker, -
|
| 01:25:31 |
Unidentified Speaker, -
HANDLED BY SERIOUS PROFESSIONALS, WELL STAFFED FOR SEGREGATION RULES DEEPLY WITHIN THE FINANCE, TREASURY AND OPERATIONS GROUPS IN CHICAGO I SHARE YOUR...
|
| 01:26:29 |
Unidentified Speaker, -
BY THEM? >> ON OCCASION AFTER OCTOBER 31ST, THERE WERE REPRESENTATIVES AND THE OFFICES. >> WOULD YOU HAVE ANY
|
| 01:26:41 |
Unidentified Speaker, -
IDEA WHY THE WOULD THE MASKED TO CEASE-AND-DESIST THEIR OWN INVESTIGATION? >> I DO NOT, SIR TO THE
|
| 01:26:48 |
Unidentified Speaker, -
ESTIMATE I'M NOT
|
| 01:26:55 |
Unidentified Speaker, -
AWARE. ONE OF THREE INTELLIGENT AND ABLE PEOPLE WANT AUTHORITY AND RESPONSIBILITY AT THE FIRM THAT WAS HANDLING THAT SHOULD HAVE BEEN HANDLING WITH ALL...
|
| 01:28:54 |
Unidentified Speaker, -
SYMBOL FOR THE DETAILED MEETING THAT DAY. YOU DIDN'T INFORM, THE FRIEND DIDN'T INFORM THE REGULATORS AS FAR AS I CAN TELL OF THE DEFICIENCY, THE SHORTAGES...
|
| 01:29:27 |
Unidentified Speaker, -
AS IF THERE WAS AN INSUFFICIENT LEVEL OF COMMUNICATION BETWEEN YOUR
|
| 01:29:35 |
Unidentified Speaker, -
DEPARTMENT, AND YOURS, IS THAT FAIR TO SAY COME AND IN ALL THAT WAS GOING ON I WOULD THINK THAT THE TOP LEVEL AT A FIRM OF LIKE THIS WHICH IS FALLING...
|
| 01:30:31 |
Unidentified Speaker, -
ANY ISSUES REGARDING THE FUNDS. I MADE IT VERY CLEAR I WAS MAKING SURE THAT WE WERE FREQUENTLY UPDATING THE REGULATORS, THAT INCLUDED FINANCE AND TREASURY...
|
| 01:32:31 |
Unidentified Speaker, -
ESTIMATE OF A YIELD BACK. >> I THANK THE GENTLEMAN AND MR. MR. RENACCI IS RECOGNIZED. >> I'M GOING BACK TO INTERNAL CONTROLS BECAUSE WE MAY NOT KNOW...
|
| 01:32:52 |
Unidentified Speaker, -
YOU
|
| 01:32:55 |
Unidentified Speaker, -
AGREE, IACP EIGHT. I NEVER STAND INTERNAL CONTROLS. YOU WOULD ADMIT THAT FOR THIS TO OCCUR THERE HAD TO BE A BREAKDOWN IN THE INTERNAL CONTROL. YOU...
|
| 01:33:17 |
Unidentified Speaker, -
INTERNAL CONTROLS, CORRECT? >>
|
| 01:33:19 |
Unidentified Speaker, -
I DON'T DISAGREE THAT SOMETHING OBVIOUSLY WENT WRONG. ESTIMATE IN THE INTERNAL CONTROLS BECAUSE THE INTERNAL CONTROL IS HOW YOU STOP THIS FROM
|
| 01:33:27 |
Unidentified Speaker, -
OCCURRING, WOULDN'T YOU AGREE? SCHAENMAN I'M GOING TO GO BACK TO A FOLLOW-UP TO SOME OF THE QUESTIONS THAT WERE ASKED, BUT THEY IDENTIFIED THE MANAGEMENT...
|
| 01:34:04 |
Unidentified Speaker, -
YOU ARE THE CFO OF A COMPANY AND YOU WERE NOT AWARE THAT THERE WAS SIGNIFICANT CONCERN BECAUSE OF THE OVERRIDE OF INTERNAL CONTROLS FOR THE ATTENTION...
|
| 01:34:26 |
Unidentified Speaker, -
OPERATE. SO WE DO HAVE DOCUMENTS TO BE PROVIDED AHEAD OF TIME FOR US TO HAVE A LOOK. UNFORTUNATELY WE DIDN'T GET IT. ESTIMATE YOUR ANSWERS ARE GOING...
|
| 01:35:17 |
Unidentified Speaker, -
POINT, I WOULD SAY THAT ANY ACTIONS WOULD HAVE TO FALL AT THE REGULATED ENTITIES. ESTIMATE THE INTERNAL CONTROLS STATE HE CAN DO WHAT HE WANTS AND...
|
| 01:35:49 |
Unidentified Speaker, -
YOU SAY HE CAN MAKE ANY DECISIONS HE WANTED AND THE ONLY PERSON THAT CAN OVERRIDE IT. IT HAS BEEN A FEATURE YOU
|
| 01:35:55 |
Unidentified Speaker, -
ARE THE CFO. IT'S SHOCKING THAT YOU ARE SITTING HERE. >> I'M NOT AWARE. >> YOU ARE NOT AWARE OF INTERNAL CONTROLS LIKE THAT? >> THEY COULD OVERRIDE
|
| 01:36:09 |
Unidentified Speaker, -
THE ACTIONS. >> WOULD
|
| 01:36:10 |
Unidentified Speaker, -
THAT BE A BREAKDOWN IN THE INTERNAL CONTROLS SOMEBODY THAT
|
| 01:36:16 |
Unidentified Speaker, -
WORKED FOR PRICE WATERHOUSE
|
| 01:36:17 |
Unidentified Speaker, -
COULD THAT BE A BRAKE ON THE INTERNAL CONTROL IF THE CEO COULD MAKE DECISIONS LIKE THAT WITHOUT ANYONE ELSE OVERRIDING AT? ANY OTHER COMPANY. >> IF...
|
| 01:36:39 |
Unidentified Speaker, -
FURTHER DOWN. ESTIMATE YOU ANSWERED THE QUESTION IS AND THEN YOU STARTED TALKING AGAIN TO LEAD YOU TO ANSWER THE WHEN THE PROBLEM IN INTERNAL CONTROLS,...
|
| 01:36:57 |
Unidentified Speaker, -
RATING AGENCY AND YOU STATED THE GLOBAL CAPITAL LIQUIDITY HAD NEVER BEEN STRONGER AND ITS AND ITS STRONGEST POSITION EVER AS A PUBLIC ENTITY. HOW...
|
| 01:37:22 |
Unidentified Speaker, -
AND LIQUIDITY. I HAD BEEN A BUSINESSMAN MY WHOLE LIFE. I WOULD NEVER HAVE BEEN ABLE TO ANSWER THE QUESTIONS THE WAY YOU WERE ANSWERING. YOU ARE THE...
|
| 01:38:00 |
Unidentified Speaker, -
OCTOBER 22ND, AGAIN, IT AMAZES ME AS A CFO OF ANY COMPANY THAT I WOULD NOT KNOW THAT WE WERE IN TROUBLE IN THE POSITION YOU ARE IN. I'M SORRY, BUT...
|
| 01:38:08 |
Unidentified Speaker, -
|
| 01:38:34 |
Unidentified Speaker, -
|
| 01:38:38 |
Unidentified Speaker, -
|
| 01:38:55 |
Unidentified Speaker, -
CERTIFY AND CONFIRM THE FUND IS BEING SENT FROM NS GLOBAL TO JPMORGAN MORE KNOTT CUSTOMER ASSETS. KHAMENEI ITERATIONS DID YOU GET? >> THREE. >> WHY?...
|
| 01:39:25 |
Unidentified Speaker, -
TO CALL JPMORGAN AND UNDERSTAND
|
| 01:39:27 |
Unidentified Speaker, -
WHAT THEY WERE
|
| 01:39:29 |
Unidentified Speaker, -
FOCUSED ON AND GET THEM WITH THE NEEDED. IN THAT FIRST CALL WITH JPMORGAN THE INDICATED VERY SPECIFICALLY THE RELATED TRANSFERS THAT THEY WERE FOCUSED...
|
| 01:40:10 |
Unidentified Speaker, -
DID YOU SPEAK TO ANYBODY ABOUT THOSE LETTERS? >> I SPOKE TO ESF O'BRIEN
|
| 01:40:17 |
Unidentified Speaker, -
ABOUT THE TRANSFERS THAT JPMORGAN WAS FOCUSED ON. SHE PROVIDED ME WITH
|
| 01:40:25 |
Unidentified Speaker, -
COPIES ON THE TRANSFERS THE MATCH WITH JPMORGAN AND DESCRIBED TO ME AND AGAIN, MY VERY CLEAR UNDERSTANDING IS THAT IF THE COMPLIANCE CERTIFICATE WAS...
|
| 01:40:50 |
Unidentified Speaker, -
WHETHER ANY OF THE TRANSFERS SHE WAS CONCERNED ABOUT? >> WE DID NOT DISCUSS
|
| 01:40:56 |
Unidentified Speaker, -
ANY
|
| 01:40:57 |
Unidentified Speaker, -
OTHERS TO READ THE WOULD BE INVOLVED TO SOME TRANSFERS, NOT OTHERS, TO SAY EVERYTHING HAS EVER BEEN DONE ON THOSE ACCOUNTS AT THE BEGINNING OF TIME...
|
| 01:41:05 |
Unidentified Speaker, -
ANY TIME IN THE FUTURE WITH AN COMPLIANCE THEY NEED COMFORT RIGHT NOW. LET'S GET THEM COMFORT ON WITH THE NEED AND PROVIDE APPROPRIATE >> DID SHE ULTIMATELY...
|
| 01:41:23 |
Unidentified Speaker, -
DID YOU EVER TALK TO MR.
|
| 01:41:28 |
Unidentified Speaker, -
|
| 01:41:29 |
Unidentified Speaker, -
RECORD -- IF
|
| 01:41:32 |
Unidentified Speaker, -
CORZINE? >> DID YOU CALL JPMORGAN YET, BUT THERE WAS MY ONLY CONVERSATION ABOUT IT. >> Y VOSE MF GLOBAL NOT ABLE TO
|
| 01:41:42 |
Unidentified Speaker, -
CERTIFY AS MS. OBRIEN HADN'T USED CUSTOMER ON THIS ON OCTOBER
|
| 01:41:48 |
Unidentified Speaker, -
28 AND WOULDN'T USE THEM IN THE FUTURE? >> FIRST OFF, THE CERTIFICATION IS A BIT BROADER THAN THAT. IT WAS EVERY TRANSFER WITHIN COMPLIANCE AND
|
| 01:41:59 |
Unidentified Speaker, -
BASICALLY ALL CFTC RULES. I CERTAINLY EXPECT WE WOULD BE ABLE TO MAKE THAT WITH TIME. SOMEBODY WOULD HAVE TO GO BACK AND MAKE A REASONABLE INCREASE...
|
| 01:42:23 |
Unidentified Speaker, -
I HAD NEVER SEEN ONE BEFORE LIKE THAT, AND CERTAINLY IN MY GENERAL EXPERIENCE, ASKING SOMEBODY TO REPRESENT, MAKE
|
| 01:42:32 |
Unidentified Speaker, -
A REPRESENTATION TODAY THAT EVERYTHING THEY MIGHT DO IN THE FUTURE IS IN ACCORDANCE WITH CERTAIN RULES AND YOU CAN SAY I HAVE PROCEDURES IN PLACE TO ...
|
| 01:42:51 |
Unidentified Speaker, -
THEY FILED WITH THE TRANSACTIONS BECAUSE THE SIZE
|
| 01:42:55 |
Unidentified Speaker, -
AND BECAUSE THE SEARCH OF COMPLIANCES OF THE HAD IN PLACE BECAUSE OF THEIR OWN HISTORY OR EXPERIENCE THEY WERE INQUIRING ABOUT. I DO THAT AND HE'S...
|
| 01:44:00 |
Unidentified Speaker, -
PEOPLE IN CHICAGO. IF YOU THINK THIS IS THE CALCULATION IN THESE COMPLEX TIMES AND ALL YOU WOULD HAVE A REASONABLE SIGN OFF AND PEOPLE WOULD KNOW...
|
| 01:44:25 |
Unidentified Speaker, -
RECALL CORRECTLY, RECALLING THE E-MAIL YOU ARE REFERRING TO, SOMEBODY ELSE WOULD RESPOND YES, GIVE
|
| 01:44:32 |
Unidentified Speaker, -
IT TO THEM. ESTIMATE BEFORE I RUN OUT OF TIME, MR. CHAIRMAN, IF I MAY WITH MR. STEENKAMP WHEN THEY'RE BEGAN TO READ SURE CALLS AT FUNDS AT MF GLOBAL?...
|
| 01:45:01 |
Unidentified Speaker, -
AND ORIGINALLY WE HAD HEARD THAT THE SHORTFALL WAS FOR THE FRIDAY, BUT THAT THE MIGHT HAVE BEEN FOR THE FIRST DAY AS WELL ALTHOUGH THAT MIGHT HAVE JUST...
|
| 01:45:55 |
Unidentified Speaker, -
AWARE THE 26 TO OCTOBER BEING THE SHORTFALL DE?
|
| 01:45:59 |
Unidentified Speaker, -
FROM WHENEVER SOURCE. ESTIMATE IT WENT BANKRUPT ON THE 21ST. IS THAT CORRECT? >> I DON'T HAVE THAT KNOWLEDGE. >> MY TIME IS WAY OVER. >> THE GENTLEMAN...
|
| 01:46:19 |
Unidentified Speaker, -
CALIFORNIA , YOU ARE RECOGNIZED
|
| 01:46:22 |
Unidentified Speaker, -
FOR FIVE
|
| 01:46:26 |
Unidentified Speaker, -
MINUTES. >> THANK YOU, MR. CHAIRMAN. DID YOU HAVE THE OPPORTUNITY TO SPEAK TO GARY
|
| 01:46:44 |
Unidentified Speaker, -
DINSMOOR PRIOR TO MFG DE SPURRING BANKRUPTCY? IN YOUR OPINION, WHERE HIS PRIORITIES PROTECTING CUSTOMER FUNDS OR MAKING SURE THE COMPANY WAS SOLD...
|
| 01:47:12 |
Unidentified Speaker, -
FUNDS, AND HE ALONG WITH HIS COLLEAGUES WANTED AN UPDATE ON WHERE WE WERE IN CONCLUDING THE SALES. >> LET ME ALSO ASK YOU TO YOUR KNOWLEDGE WAS MR....
|
| 01:47:33 |
Unidentified Speaker, -
MFG DECLARING BANKRUPTCY? >> I ASSUME YOU WERE TALKING ABOUT THE LAST DATES? >> I AM NOT AWARE THEY HAD ANY
|
| 01:47:43 |
Unidentified Speaker, -
DISCUSSIONS. >> SO THERE WASN'T ANY
|
| 01:47:49 |
Unidentified Speaker, -
CONVERSATION OF HIS CONVERSATION WITH
|
| 01:47:52 |
Unidentified Speaker, -
MR. DINSMOOR? >> THAT IS CORRECT TO THE BEST OF MY RECOLLECTION. HE MAY OR MAY NOT HAVE BEEN, I AM NOT SURE, ON A CALL WITH A LARGE NUMBER
|
| 01:48:00 |
Unidentified Speaker, -
OF REGULATORS AT 2:00 ON SATURDAY AFTERNOON WITH MANY REGULATORS AND I DO NOT KNOW IF HE WAS ON THAT CALL. >> WHAT MAY ASK ANOTHER QUESTION. IF WE GO...
|
| 01:48:24 |
Unidentified Speaker, -
|
| 01:48:52 |
Unidentified Speaker, -
FOR THE POSITIONS COME AND THEY ULTIMATELY LED TO THEIR DETERMINATION I BELIEVE IN AUGUST OF 2011 DIFFERENT CAPITAL TREATMENT WAS APPROPRIATE TO DISCONNECTED...
|
| 01:49:46 |
Unidentified Speaker, -
MY KNOWLEDGE WITH THEIR VIEW ON WHAT THE APPROPRIATE CAPITAL TREATMENT WAS FOR THE POSITION UNDER THE RULES AS THEY WERE WRITTEN SO YES IT DID MAKE...
|
| 01:50:22 |
Unidentified Speaker, -
THAT SHE WOULD NOT HAVE APPROVED THE $170 MILLION TRANSFER ON OCTOBER OCTOBER 28TH TO COVER THE MF GLOBAL OVERDRAFT. DO YOU REMEMBER THAT? AND DO YOU...
|
| 01:51:15 |
Unidentified Speaker, -
WOULDN'T APPROVE THE TRANSACTION , SO THAT'S THAT PART. I'M NOT SURE THAT FINALLY DID THE SAME RULES THAT WERE LOBBIED AGAINST. I NEED A LITTLE HELP...
|
| 01:51:40 |
Unidentified Speaker, -
TODAY. WE ARE GOING TO HAVE A LITTLE BIT OF FALLOUT, BUT WHAT I WANT TO DO BECAUSE I THINK THAT WE HAVE KIND OF DANCE AROUND THIS ISSUE A LITTLE BIT,...
|
| 01:53:03 |
Unidentified Speaker, -
TAKE THEIR MONEY AND PUT IT IN THE COMPANY'S SOMEWHERE ELSE, IS THAT RIGHT? WHAT YOU ARE SUPPOSED TO DO IS IF YOU TAKE MONEY OFF AND BUY IT YOU'RE...
|
| 01:54:04 |
Unidentified Speaker, -
ESTIMATE THAT THEY WOULD GO BACK PROPORTIONATELY. SO, MR. STEENKAMP I WANT TO GO BACK TO SOMETHING THAT'S KIND OF -- ARE YOU FAMILIAR WITH MR. ROSEN...
|
| 01:54:27 |
Unidentified Speaker, -
THAT
|
| 01:54:29 |
Unidentified Speaker, -
THE MATURITIES IN THE FOREIGN SOVEREIGN DEBT WERE A POTENTIAL RISK TO THE COMPANY? >> I BECAME A CFO IN APRIL, BUT I WAS AWARE THERE WERE MANY DISCUSSIONS...
|
| 01:54:48 |
Unidentified Speaker, -
AND MR. KARZAI AND THE RISK OFFICERS AROUND RISK LIMITS. >> ARE YOU AWARE OF A DOCUMENT CALLED A BREAK THE GLASS THAT WAS PUT TOGETHER BY YOUR FIRM?...
|
| 01:55:02 |
Unidentified Speaker, -
DOCUMENT? >> THERE WAS A WORKING GROUP PUT TOGETHER. THEY WERE MEMBERS OF TREASURY, MEMBERS OF FINANCE, MEMBERS
|
| 01:55:13 |
Unidentified Speaker, -
OF RISK, TREASURY BECAUSE THAT WAS LIKE A SCENARIO ANALYSIS DOCUMENT SO IT REQUIRES THE INPUT. >> DID YOU PARTICIPATE IN NOT? THAT WAS WHEN THAT YOU...
|
| 01:55:32 |
Unidentified Speaker, -
BY THE BOARD, AND WAS
|
| 01:55:37 |
Unidentified Speaker, -
COMPLETED WHEN? >> WAS PRESENTED TO THE BOARD ABOUT THE MIDDLE OF OCTOBER. >> IS IT IRONIC THAT YOU
|
| 01:55:46 |
Unidentified Speaker, -
PUT TOGETHER THE BREAK THE GLASS SCENARIO AND SENATE 14 DAYS BEFORE YOU DECLARE BANKRUPTCY? >> IT'S VERY
|
| 01:55:53 |
Unidentified Speaker, -
PRUDENT AND COMMON TO HAVE A DOCUMENT LIKE THIS, AND THE INITIATION WAS MANY
|
| 01:56:01 |
Unidentified Speaker, -
MONTHS PRIOR TO ESTIMATE DO YOU AGREE WITH ANY THAT THE CUSTOMERS WOULD HAVE LOST MONEY PEOPLE TOOK MONEY OUT OF THAT ACCOUNT AND DIDN'T PUT IT BACK?...
|
| 01:56:22 |
Unidentified Speaker, -
THEIR POSITIONS, BUT IF YOU MEANT OUT THEIR
|
| 01:56:25 |
Unidentified Speaker, -
POSITIONS, THE ONLY WAY THE CUSTOMER LOST OVER A MILLION DOLLARS AS TO SOMEBODY TO TAKE MORE MONEY NOW THAN THEY WERE SUPPOSED TO, YES OR NO. >> TO...
|
| 01:56:50 |
Unidentified Speaker, -
LAW MISS OPERATES, SOMEBODY CAN LOSE MONEY FROM
|
| 01:56:54 |
Unidentified Speaker, -
A CUSTOMER OTHER THAN HIS NET DECISION IS TAKEN OUT OF THE ACCOUNT THAT SHOULDN'T HAVE BEEN TAKEN OUT, YES OR NO ESTIMATE I DIDN'T HAVE ENOUGH TO INVESTIGATE...
|
| 01:57:32 |
Unidentified Speaker, -
COLLATERAL >> THE CALCULATION RULES ALLOW AND PERMIT IF THE CLIENTS GAVE THE FIRM $100
|
| 01:57:43 |
Unidentified Speaker, -
UNDER THE
|
| 01:57:46 |
Unidentified Speaker, -
SECURE RULES THERE IS ONE AVAILABLE THE DOES REQUIRE IT CAN REQUIRE LESS THAN THAT $100 TO BE REQUIRED TO BE MAINTAINED IN THE SECURE ENVIRONMENT. >>...
|
| 01:58:07 |
Unidentified Speaker, -
MONEY, RIGHT? >> IS THIS THE WAY YOU LOSE MONEY? YOU TOOK MONEY OUT THAT SHOULDN'T HAVE BEEN TAKEN OUT? >> WITH THE EXCEPTION OF
|
| 01:58:25 |
Unidentified Speaker, -
WHAT MR. SERWINSKI DESCRIBED YOU HAVE AN OBLIGATION TO RETURN THE CUSTOMER
|
| 01:58:32 |
Unidentified Speaker, -
FUNDS. >> WHAT HAPPENED WHEN THEY DECLARED BANKRUPTCY WAS NOBODY PUT THE MONEY BACK, DID
|
| 01:58:42 |
Unidentified Speaker, -
THEY? >> NOT TO MY KNOWLEDGE. >> ARE THERE ANY MEMBERS THAT WANT TO HAVE A FOLLOW-UP ON THE
|
| 01:58:51 |
Unidentified Speaker, -
|
| 01:58:52 |
Unidentified Speaker, -
PANEL? >> I'M SORRY, I WAS LOOKING THROUGH MY PAPERS AND I DON'T FIND YOUR
|
| 01:59:02 |
Unidentified Speaker, -
RESUME. >> I HAVE A POSTGRADUATE DEGREE IN ACCOUNTING IN JOHANNESBURG TO RESPECT WHAT KIND OF A GREAT POINT DID YOU
|
| 01:59:17 |
Unidentified Speaker, -
GRADUATE WITH? MORE OR LESS? >> IT WAS DIFFERENT, PROBABLY MY AVERAGE WAS AROUND 78%. ESTIMATE HOW MANY HOURS OF ACCOUNTING DID YOU
|
| 01:59:29 |
Unidentified Speaker, -
HAVE? >> I DON'T KNOW OFF THE TOP OF MY HEAD. IT WAS FOR YEARS TO MATURE YEARS GRADUATE AND POST YOUR GRADUATE AND THERE
|
| 01:59:38 |
Unidentified Speaker, -
WERE NCTA. >> DO YOU REMEMBER THINGS IN THE PAST BUT YOU DON'T REMEMBER SOME REAL BIG SIGNIFICANT THINGS AND
|
| 01:59:49 |
Unidentified Speaker, -
JUST TRYING TO BRING THAT TO THE ATTENTION OF THE PUBLIC WATCHING TODAY BECAUSE THEY ARE WONDERING WHO THE HELL IS IN CHARGE OF ALL THESE COMPANIES...
|
| 02:00:31 |
Unidentified Speaker, -
THE REQUIREMENT, THE REGULATORY
|
| 02:00:34 |
Unidentified Speaker, -
REQUIREMENT -- >> YOU DIDN'T HAVE AN INTERNAL PROCESS THAT WOULD SAY WE ARE JUST KIND
|
| 02:00:38 |
Unidentified Speaker, -
OF MESSED UP HERE, AND THE ASSISTANT TREASURER I
|
| 02:00:43 |
Unidentified Speaker, -
THINK IS WHO WE ASCERTAINED EARLIER COULD HAVE MADE THOSE CALLS. AS WE'VE GOT A COUPLE OF PEOPLE MAY BE DAYS AUTHORIZED THE DIPPING INTO THE SUN WAS...
|
| 02:01:16 |
Unidentified Speaker, -
COMMITTEE TO RECTIFY WHAT EVER CONTRIBUTING FACTOR EXISTED THAT LED TO -- >> SO THERE WAS SOMEBODY? >> YES. .. >>
|
| 02:01:34 |
Unidentified Speaker, -
|
| 02:01:37 |
Unidentified Speaker, -
THE FIRM WAS ON REGULATORY COMPLIANCE TO THE BEST OF MY KNOWLEDGE. SO YOU'RE SAYING THAT THERE IS NO BUILDUP OVER TIME? >> I AM SAYING
|
| 02:04:00 |
Unidentified Speaker, -
THAT THE FIRM WAS ON REGULATORY CONFINEMENT TO ACCESS SEGREGATED RULES UNTIL I WAS AWARE ON
|
| 02:04:07 |
Unidentified Speaker, -
SUNDAY NIGHT THAT I WAS NOT IN COMPLIANCE ON SUNDAY. >> THANK YOU, MR. CHAIRMAN. >> ANY OTHER MEMBERS? THIS WILL BE THE LAST ONE. >> THANK
|
| 02:04:23 |
Unidentified Speaker, -
YOU, MR. CHAIRMAN. I APPRECIATE YOU ACTUALLY TRYING TO
|
| 02:04:26 |
Unidentified Speaker, -
HELP US UNRAVEL SOME OF THIS.
|
| 02:04:31 |
Unidentified Speaker, -
YOU ARE THE ONLY ONE WHO HAS ANSWERED QUESTIONS BEYOND A YES OR NO. WE APPRECIATE YOUR WILLINGNESS. MR. STEENKAMP, IS IT CORRECT THAT YOUR WORK CONSISTS...
|
| 02:05:05 |
Unidentified Speaker, -
GLOBAL HOLDINGS?
|
| 02:05:08 |
Unidentified Speaker, -
SPIN IT. >> SIR, THAT IS FOR THE TRUSTEE TO DETERMINE. >> YOU YOU HAVE NO IDEA?
|
| 02:05:22 |
Unidentified Speaker, -
UNDER OATH YOU HAVE NO IDEA WHAT I'M TALKING ABOUT? >> SIR, I BELIEVE
|
| 02:05:28 |
Unidentified Speaker, -
THAT IT IS UP TO THE TRUSTEES OF THE HOLDING COMPANY. I AM NOT SURE HOW THAT
|
| 02:05:35 |
Unidentified Speaker, -
PROCESS WORKS ALLOCATING ASSETS -- >> WE PROPOSE PLAYING YOU -- PAYING YOU AND MR. BRADLEY ABELOW AND
|
| 02:05:51 |
Unidentified Speaker, -
OTHERS? >> KNOW OTHERS HAVE BEEN FINALIZED OR POSE AS OF YET. >> DO YOU BELIEVE YOU DESERVE A BONUS? >> I BELIEVE FOR ALL THE HARD WORK WE
|
| 02:05:59 |
Unidentified Speaker, -
HAVE BEEN DOING WE ASK THAT WE BE FAIRLY
|
| 02:06:02 |
Unidentified Speaker, -
COMPENSATED. WE ARE NOT PART OF THE
|
| 02:06:05 |
Unidentified Speaker, -
DISCUSSION. >> FAIRLY COMPENSATED IN THE FUTURE, BUT NOT THE COMPENSATED FOR THIS HUGE LOSS. WOULD
|
| 02:06:15 |
Unidentified Speaker, -
YOU ACCEPT BONUSES IF THE MOTION IS APPROVED BY THE BANKRUPTCY COURT? >> IF THE TRUSTEE DETERMINES FAIR AND REASONABLE COMPENSATION -- >> BECAUSE YOU...
|
| 02:06:29 |
Unidentified Speaker, -
OF THESE INVESTORS. HOW DO YOU THINK THEY WILL FEEL THAT YOU ARE
|
| 02:06:33 |
Unidentified Speaker, -
AWARDED MONEY MONEY THAT WAS STOLEN FROM THEIR SEGREGATED ACCOUNTS TO PAY FOR THE BONUS AND LEGAL FEES OF THE VERY PEOPLE WHO ARE RUNNING THE COMPANY...
|
| 02:06:54 |
Unidentified Speaker, -
WILLFUL BLINDNESS? >> IS A TERM USED ON
|
| 02:06:59 |
Unidentified Speaker, -
INDIVIDUAL CRIMINAL SITUATIONS WHERE
|
| 02:07:09 |
Unidentified Speaker, -
THEY CLAIM NOT BEING LIABLE. >> I AM NOT SURE WHAT THAT MEANS THE. >> YOU HAVE ANY IDEA THAT APPLIES IN THIS CASE ARE NOT. >> I WOULD
|
| 02:07:21 |
Unidentified Speaker, -
|
| 02:07:23 |
Unidentified Speaker, -
ASSUME -- IT IS SOMETHING THAT I AM CONCERNED WITH THE. >> WHO WAS RESPONSIBLE FOR PUTTING
|
| 02:07:32 |
Unidentified Speaker, -
MF GLOBAL INTO
|
| 02:07:38 |
Unidentified Speaker, -
LIQUIDATION? >> ANYONE FROM THE FEC, REPRESENTING CREDITORS ARE TRADING COUNTERPARTS. >> THE SEC WOULD'VE BEEN APPALLED -- ONE CANNOT
|
| 02:07:53 |
Unidentified Speaker, -
FILE THEMSELVES UNDER IT. I BELIEVE IT IS THE SEC THAT HAS TO MAKE AN APPLICATION OR
|
| 02:07:58 |
Unidentified Speaker, -
DO THAT. I BELIEVE IT WAS A PERIOD OF TIME WHEN THE REGULATORS WERE DEEP IN CONVERSATION AMONGST THEMSELVES. >> WAS THE FEC INVOLVE? >> HE WAS CERTAINLY...
|
| 02:08:15 |
Unidentified Speaker, -
CONFERENCE CALL EARLY IN THE MORNING ON OCTOBER OCTOBER
|
| 02:08:19 |
Unidentified Speaker, -
31. >> WHO WAS INVOLVED IN PLACING THE HOLDING COMPANY IN CHAPTER 11, ALLOWING THE ASSETS TO CLEAR THE CREDITORS
|
| 02:08:27 |
Unidentified Speaker, -
AND COUNTERPARTIES? >> THE BOARD MAY DETERMINATION THAT THE COMPANY WAS GOING BANKRUPT. >> ANYONE IN PARTICULAR ON THE
|
| 02:08:35 |
Unidentified Speaker, -
BOARD? >> NO. IT WAS DIRECTORS. >> OKAY. I
|
| 02:08:41 |
Unidentified Speaker, -
YIELD
|
| 02:08:43 |
Unidentified Speaker, -
BACK. >> I THINK THE GENTLEMAN AND I THINK
|
| 02:08:46 |
Unidentified Speaker, -
THE PANEL. AT THIS TIME, YOU ARE
|
| 02:08:52 |
Unidentified Speaker, -
DISMISSED, AND WE WILL CALL UP THE SECOND PANEL. THANK YOU FOR COMING. YOU [INAUDIBLE CONVERSATIONS] >> I WANT TO WELCOME THE SECOND PANEL IS DIANE...
|
| 02:09:47 |
Unidentified Speaker, -
ROTH, PRESIDENT OFFICER OF THE NATIONAL FUTURES ASSOCIATION, AND SUZANNE COSPER, FINANCIAL ACCOUNTING STANDARDS BOARD'S. I WILL REMIND EACH OF YOU THAT...
|
| 02:10:16 |
Unidentified Speaker, -
FOR J.P. MORGAN CHASE. I WAS ONE OF THE J.P. MORGAN OFFICIALS DEALING WITH THE MF GLOBAL OVER THE WEEKEND ON OCTOBER 31, 2000. I APPRECIATE THE OPPORTUNITY...
|
| 02:15:43 |
Unidentified Speaker, -
PRESIDENT OF THE NATIONAL FUTURES ASSOCIATION. FOR THE LONGEST TIME, DECADES AND DECADES, THE FUTURES INDUSTRY HAD
|
| 02:15:48 |
Unidentified Speaker, -
AND IMPECCABLE REPUTATION AND A WELL-DESERVED REPUTATION FOR INTEGRITY. OPTICALLY, THE CONTROVERSY SURROUNDING MF GLOBAL HAS DEALT A BLOW AND ALL OF US...
|
| 02:21:42 |
Unidentified Speaker, -
OF THE SUBCOMMITTEE. MY NAME IS SUSAN COSPER, AND I AM THE TECHNICAL DIRECTOR
|
| 02:21:48 |
Unidentified Speaker, -
OF THE ACCOUNTING BOARD. I OVERSEE THE TECHNICAL AGENDA. I WOULD LIKE TO THANK YOU FOR THIS OPPORTUNITY TO SPEAK AT TODAY'S IMPORTANT HEARING. I UNDERSTAND...
|
| 02:24:15 |
Unidentified Speaker, -
GUIDELINES. SINCE THE TRANSFER IS TEMPORARY, AND BECAUSE THE TRANSFER AS TO REPURCHASE THE ASSET BEFORE MATURITY. ANOTHER TYPE OF REPURCHASE AGREEMENT....
|
| 02:26:52 |
Unidentified Speaker, -
MR. CHAIRMAN. THANK YOU ALL FOR COMING TODAY. I ACTUALLY FIND
|
| 02:26:59 |
Unidentified Speaker, -
THIS PANEL -- HOPEFULLY, MORE ENLIGHTENING. I WANT TO START OUT BY MAKING CLEAR WHAT I THINK WHAT OUR GOAL IS, BASED ON THE HEARINGS WE HAVE IN THE RESEARCH...
|
| 02:33:34 |
Unidentified Speaker, -
HOW THIS GETS
|
| 02:33:36 |
Unidentified Speaker, -
DONE? >> I'M SORRY. THE FOUR EMENDATIONS I OUTLINED WERE SUPPORTED BY ALL WHO ARE PART OF THE COMMITTEE COME AS
|
| 02:33:45 |
Unidentified Speaker, -
WELL AS OTHER EXCHANGES THAT WE SPOKE TO, AS WELL AS OUR ADVISORY COMMITTEE THAT WE SPOKE TO, AS WELL AS OUR PUBLIC DIRECTORS ON OUR BOARD. THEY HAVE...
|
| 02:34:09 |
Unidentified Speaker, -
SEGREGATED
|
| 02:34:10 |
Unidentified Speaker, -
FUNDS. IF ONE CUSTOMER INCURS SUBSTANTIAL LOSSES, THAT ACCESS SEGREGATED FUNDS IS A WAY OF MAKING GOOD THAT CUSTOMERS SHORTFALL TO PROTECT ALL THE...
|
| 02:34:32 |
Unidentified Speaker, -
THAT TODAY. I AM WAY OVER MY TIME. MY LAST QUESTION, AND I THINK I KNOW THE ANSWER, BUT I WILL ASK ANYWAY -- WHY DON'T YOU JUST SAY MINGLING FUNDS...
|
| 02:35:05 |
Unidentified Speaker, -
EVENT OF ONE CUSTOMER EXPERIENCE A LOSS AND CREATING A SHORTFALL IN THAT ACCOUNT -- >> HOW DOES IT PROTECT ME IF ANOTHER CUSTOMER LOSES MONEY AND UNKNOWN...
|
| 02:35:20 |
Unidentified Speaker, -
MONEY. I DID NOT PLAY THAT GAME. YET YOU ARE TAKING MY MONEY TO PROTECT ANOTHER CUSTOMER. >> NO, SIR. >> WHO LOST THEIR MONEY BECAUSE THEY TOOK A GAMBLE...
|
| 02:35:33 |
Unidentified Speaker, -
IF
|
| 02:35:34 |
Unidentified Speaker, -
IT IS AN
|
| 02:35:39 |
Unidentified Speaker, -
FCM AND CUSTOMER NUMBER ONE LOSES NOT ONLY ALL OF HIS MONEY, HE GOES INTO A DEFICIT. HE HAS
|
| 02:35:49 |
Unidentified Speaker, -
A 50-DOLLAR TRADING LOSS. HE IS IN THE WHOLE. THE ACCOUNT NOW HAS $50. TO PROTECT THAT CUSTOMER WHO HAD THAT LOSS,. >> BUT YOU DIDN'T PROTECT ME. HE...
|
| 02:36:09 |
Unidentified Speaker, -
MET MR. RAAB. >> I AM NOT SURE HOW THIS HELPS ME. I'M WILLING TO BE EDUCATED. I'M LOOKING FORWARD TO EDUCATION. BUT IT MAKES NO
|
| 02:36:23 |
Unidentified Speaker, -
SENSE TO ANYBODY ELSE I KNOW >> IS THERE ANYPLACE ELSE WHERE PEOPLE CAN PICK UP THE PHONE AND USE MONEY AT JP MORGAN? IS THIS THE ONLY ONE OR IS THERE...
|
| 02:36:39 |
Unidentified Speaker, -
ANY -- >> MA'AM, I AM WAY OVER TIME
|
| 02:36:46 |
Unidentified Speaker, -
TO. >> I WILL SPEAK TO ANOTHER TIME. >> I'D LIKE TO. THANK YOU. >> I WILL LIKE TO SAY THIS. AS YOU
|
| 02:36:53 |
Unidentified Speaker, -
|
| 02:36:54 |
Unidentified Speaker, -
KNOW, ONCE WE
|
| 02:36:55 |
Unidentified Speaker, -
HAVE COMPLETED OUR
|
| 02:36:57 |
Unidentified Speaker, -
INVESTIGATION AND OVERSIGHT I WANT TO PUBLISH A REPORT THAT WILL BE APPROVED BY THE COMMITTEE. ONE OF THE THINGS THAT WE HOPE TO ACCOMPLISH FROM THAT...
|
| 02:37:51 |
Unidentified Speaker, -
GENTLEMAN CLEAR. SHOULD THERE BE A STATEMENT THAT ONE'S MR. CAPUANO IN HIS MONEY COULD BE USED FOR COVERING OTHERS' LOSSES -- >> [INAUDIBLE] >>
|
| 02:38:24 |
Unidentified Speaker, -
THERE IS A CUSTOMER RISK OF LOSS, ONE OF THE THINGS THAT YOU TALKED ABOUT IN THE SEGREGATED FUNDS REGIMEN. THAT IS THE SITUATION WHERE ONE CUSTOMER INCURS...
|
| 02:38:34 |
Unidentified Speaker, -
TRADING LOSSES. THE FIRM'S OWN CAPITAL HAS TO MAKE GOOD THOSE TRADING LOSSES. THAT CAN RESULT IN A SHORTFALL IN WHICH NON-DEFAULTING CUSTOMERS SUFFER...
|
| 02:38:59 |
Unidentified Speaker, -
DISCLOSURES CAN BE SHARPENED AND MADE MORE CLEAR. >> THOSE DISCLOSURES ARE SOMETHING THAT YOU HAVE TO READ CLEARLY -- >>
|
| 02:39:11 |
Unidentified Speaker, -
YES. >> DO GREEK? >> THAT IS AN AREA THAT NEEDS TO BE MAKE THEIR. >> IT OUGHT TO BE MADE IN BLINKING
|
| 02:39:20 |
Unidentified Speaker, -
LIGHTS. THEY ARE PEOPLE THAT
|
| 02:39:23 |
Unidentified Speaker, -
LOST 1.6 MILLION. >> THAT SORT OF
|
| 02:39:25 |
Unidentified Speaker, -
FELLOW CUSTOMER LOSS, RISK OF LOSS THAT I TALKED ABOUT, AS FAR AS I KNOW, HAD NOTHING TO DO WITH MF GLOBAL. >> DID MF
|
| 02:39:33 |
Unidentified Speaker, -
GLOBAL BREAK ANY LAWS IN EUROPEAN? >> I DON'T KNOW THE EXACT INVESTIGATION. I KNOW THAT THERE IS A SHORT ON
|
| 02:39:40 |
Unidentified Speaker, -
CUSTOMER FUNDS, AND THAT SHOULDN'T HAVE BEEN. >> DO YOU KNOW OF ANY
|
| 02:39:43 |
Unidentified Speaker, -
OTHER TRADING FUNDS THAT ARE DIPPING INTO THE SEGREGATED ACCOUNTS TO MAKE
|
| 02:39:50 |
Unidentified Speaker, -
THINGS WHOLE? >> NO, WE MONITOR OUR BRONZE ON A DAILY BASIS. WE MONITOR OUR FIRMS ON THE DAILY
|
| 02:40:00 |
Unidentified Speaker, -
BASIS. THE BOUNCES WERE CONFIRMED TO OUTSIDE SOURCES. I'M NOT AWARE OF ANY OTHER FIRM -- >> WERE YOU EVER MONITORING MF GLOBAL. >> I BEG YOUR PARDON?...
|
| 02:40:13 |
Unidentified Speaker, -
FIRM MONITORING AND. >> THERE
|
| 02:40:17 |
Unidentified Speaker, -
ARE
|
| 02:40:18 |
Unidentified Speaker, -
|
| 02:40:19 |
Unidentified Speaker, -
AROUND 75 TO 80 THAT WERE HOLDING CUSTOMER FUNDS AND TRADE FUTURES. WE ARE THE DESIGNATED
|
| 02:40:27 |
Unidentified Speaker, -
SELF-REGULATORY ORGANIZATION WITH ABOUT 26. THE OTHER ONE, FOR THE MOST PART, IS RELATED TO THE DSL. >> OKAY. MS. COSPER,
|
| 02:40:43 |
Unidentified Speaker, -
THE MONEY -- MR. CAPONE IS MONEY THAT HE HAS PUT ON THE SECURITY, PLEASE SIMPLIFY DOWN WHERE WE CAN UNDERSTAND THAT. >> BASICALLY, CONGRESSMAN CAPUANO...
|
| 02:41:04 |
Unidentified Speaker, -
TRANSFERRED TO YOU -- >> THAT HE TRANSFERRED TO YOU FOR CASH TO. >> AND SO THE REPO ACCOUNT -- >> AND THAT THE SAME TIME HE ENTERED INTO AN AGREEMENT...
|
| 02:41:13 |
Unidentified Speaker, -
SO THE
|
| 02:41:15 |
Unidentified Speaker, -
REPO ACCOUNT TAKES
|
| 02:41:16 |
Unidentified Speaker, -
ON SECURITY THAT SECURITY AND SETS IT OVER HERE
|
| 02:41:18 |
Unidentified Speaker, -
AND BORROWS MONEY AGAINST IT? >> THAT IS CORRECT. >> AND THEN WE BUY ANOTHER SECURITY FOR
|
| 02:41:23 |
Unidentified Speaker, -
SOMEONE ELSE FOR OURSELVES
|
| 02:41:26 |
Unidentified Speaker, -
SO -- >>
|
| 02:41:27 |
Unidentified Speaker, -
HE'S DONE SOMETHING WITH THE MONEY THAT YOU HAD, RIGHT? >> THEY WOULD DO SOMETHING -- >>
|
| 02:41:37 |
Unidentified Speaker, -
BUT AT THE SAME TIME YOU ENTER INTO A POOR PURCHASE COMMITMENT. >> YEAH, BUT THIS
|
| 02:41:42 |
Unidentified Speaker, -
IS ALL PART OF LEGALITIES THAT ARE PART OF THE LINE. I TAKE
|
| 02:41:45 |
Unidentified Speaker, -
MONEY THAT HE GIVES ME AND I TRADE THAT SECURITY TO
|
| 02:41:49 |
Unidentified Speaker, -
SOMEONE ELSE TO GET CASH, RIGHT? AND I STILL HAVE CONTROL THAT I GET CASH, RIGHT? AND I BRING THAT CASH BACK IN THOSE MF GLOBAL ACCOUNTS -- THEY WERE...
|
| 02:42:14 |
Unidentified Speaker, -
ELSE, RIGHT? >> THEY CAN USE THE CASH -- >>
|
| 02:42:19 |
Unidentified Speaker, -
MY QUESTION IS, IS THERE A LIMIT TO? YOU SAID THAT THAT IS KOSHER FROM ACCOUNTING STANDARDS. >>
|
| 02:42:24 |
Unidentified Speaker, -
IN A REPO TO MATURITY TRANSACTION,
|
| 02:42:27 |
Unidentified Speaker, -
IT -- >> IS THERE A LIMIT TO THE NUMBER OF TIMES -- SO WE GET THE
|
| 02:42:33 |
Unidentified Speaker, -
SECURITY AND WE TRADED HIM AND WE GET IT BACK AND
|
| 02:42:35 |
Unidentified Speaker, -
WE TRADED. SO 50 OR 60 RPMS, IS THERE IN THE LIMIT WHERE THEY SAY THIS IS CONFUSING AND WE HAVE EXPOSURE -- IS THERE A LIMIT TO THE NUMBER OF -- WE WOULD...
|
| 02:43:08 |
Unidentified Speaker, -
CULPABLE FOR THE CREDIT RISK ASSOCIATED WITH THAT SECURITY.
|
| 02:43:10 |
Unidentified Speaker, -
AT THE VALUE OF THAT SECURITY -- THE VALUE DECLINES. IT REDUCES THE NETWORK. >> I'M BACK TO THE NUMBER OF R COCCO P.
|
| 02:43:28 |
Unidentified Speaker, -
A. -- I DON'T KNOW MUCH ABOUT THIS -- I RAISED PIGS GROWING UP. I THINK THAT IS IMPORTANT THAT PEOPLE KNOW -- IT'S A HOUSE OF CARDS. >> IT IS NO DOUBT...
|
| 02:43:58 |
Unidentified Speaker, -
WITH THAT. >> MY TIME IS UP, MR. CHAIRMAN. WHEN YOU START YOUR MEETINGS, WE COULD TALK ABOUT THESE THINGS,
|
| 02:44:07 |
Unidentified Speaker, -
MOST OF US ARE NOT KNOWLEDGEABLE ABOUT MF GLOBAL. ALL WE KNOW IS THAT $1.6 MILLION OF MONEY DISAPPEARED. WE HAVE A PANEL OF PEOPLE WHERE NONE OF THEM...
|
| 02:44:46 |
Unidentified Speaker, -
CORZINE AND I NOW YIELD TO MY GOOD FRIEND MR. CANSECO. >> MS. JEN ABOUT, WHY DID J.P. MORGAN REQUEST ASSURANCES FROM MF GLOBAL THAT THE FIRM WAS NOT
|
| 02:45:04 |
Unidentified Speaker, -
PROPERLY -- IMPROPERLY MOVING MONEY FROM CUSTOMER ACCOUNTS. WELL, AS I PREVIOUSLY MENTIONED, IT IS THE OBLIGATION OF THE FCM TO KNOW WHAT FUNDS IN THE...
|
| 02:46:48 |
Unidentified Speaker, -
IT OUT -- WE GOT ABOUT WHAT DID
|
| 02:46:51 |
Unidentified Speaker, -
WE REALLY NEED. >> THEN THE SUBSEQUENT LETTER SATISFIED THEIR NEEDS AND THEIR DESIRES. IS THAT CORRECT? >> YES, THAT'S TRUE. WE REVISED
|
| 02:47:01 |
Unidentified Speaker, -
LETTER TO REFLECT WHAT THEY LEGALLY WANTED TO KNOW. >>
|
| 02:47:06 |
Unidentified Speaker, -
DID THEY SIGN AND SEND IT TO YOU? >> NO, THEY DIDN'T. I HAD CONVERSATIONS WITH MS. FERBER AND HER
|
| 02:47:14 |
Unidentified Speaker, -
|
| 02:47:15 |
Unidentified Speaker, -
DEPUTY, WHO GAVE ME ASSURANCES THAT THEY KNEW THE RULES, THEY WERE IN COMPLIANCE WITH THE RULES, AND THAT WHEN WE FINALLY REVISE THE LETTER TO ONLY...
|
| 02:47:46 |
Unidentified Speaker, -
THAT TRUE? >> I KNOW THAT THERE WAS SOME DISCUSSION WITHIN J.P. MORGAN ABOUT EVALUATING WHETHER PIECES OF
|
| 02:47:57 |
Unidentified Speaker, -
MF GLOBAL BUSINESS MIGHT BE ATTRACTIVE TO US. AFTER AN EVALUATION, WE DECIDED THAT IT REALLY WASN'T A GOOD BUSINESS. >> THANK YOU. MR. ROTH. CONGRESS...
|
| 02:48:19 |
Unidentified Speaker, -
ADEQUATE SUBSTITUTE FOR ENFORCING EXISTING LAWS. RIGHT NOW, THE CFTC IS WRITING NEW RULES AT A FURIOUS PACE. BUT IN THE CASE OF MF GLOBAL, THEY FAILED...
|
| 02:48:59 |
Unidentified Speaker, -
NONETHELESS. I CAN TELL YOU -- I HAVE BEEN IN THE REGULATORY PROCESS OF FUTURES FOR A LONG TIME. AND I KNOW THAT WHENEVER BAD THINGS HAPPEN THERE IS...
|
| 02:49:40 |
Unidentified Speaker, -
ENFORCING -- I GUESS YOUR ANSWER IS -- >> YES. I BELIEVE THE WAY THE STATUTE IS SET UP IS THAT THE CFTC IS A OVERSIGHT
|
| 02:49:50 |
Unidentified Speaker, -
AGENCY. >> THANK YOU FOR YOUR CANDOR. I YIELD BACK TO BALANCE MY TIME IF THERE IS ANY. >> I THANK THE
|
| 02:49:59 |
Unidentified Speaker, -
GENTLEMAN. I JUST HAVE A COUPLE OF
|
| 02:50:06 |
Unidentified Speaker, -
QUESTIONS. MS. GENOVA, THESE TRANSACTIONS GOT IN A LOT OF SCRUTINY. SOME OF THAT SCRUTINY THAT WAS PARTICIPATED -- IT WAS FROM J.P. MORGAN, THEY ACTUALLY...
|
| 02:50:55 |
Unidentified Speaker, -
TO JUNK. OFFICER OF THE ENTIRE FIRM WOULD HAVE CONCERNS ABOUT THE COMPANY THERE WOULD BE ISSUES SUCH AS A LARGE OVERDRAFT IN THE COUNT. THIS WOULD...
|
| 02:51:30 |
Unidentified Speaker, -
MY MEMORY. WHEN WAS YOUR TEAM DISPATCHED TO GO OVER TO MF GLOBAL? >> WITHIN TWO MF GLOBAL ON FRIDAY, OCTOBER 28, AND IT WAS TO HELP THEM SEE IF WE COULD...
|
| 02:51:46 |
Unidentified Speaker, -
TO HELP THEM RAISE THE LIQUIDITY. THAT WAS ON FRIDAY, OCTOBER 28. >> IS THAT THE SAME DAY THEY COVER THE OVERDRAFT? >> THAT IS THE SAME DAY THAT THEY...
|
| 02:52:03 |
Unidentified Speaker, -
OVERDRAFT. >> I THINK ONE OF THE
|
| 02:52:05 |
Unidentified Speaker, -
THINGS YOU SAID IS DEAD TO ALERT WAS PLACED ON THIS
|
| 02:52:12 |
Unidentified Speaker, -
COMPANY, SO YOU'RE LOOKING AT THINGS TO MAKE SURE THEY ARE APPROPRIATE. SOMEONE WAS APPROVING THOSE TRANSFERS AT J.P. MORGAN AND YOUR OWN DEBIT ALERT...
|
| 02:52:32 |
Unidentified Speaker, -
FINANCIAL CONDITION, WE WILL NOT TRANSFER FUNDS OUT OF THE ACCOUNT UNLESS THERE WERE FUNDS IN THE ACCOUNT. THE NORMAL COURSE IS TO FACILITATE CLIENT...
|
| 02:53:21 |
Unidentified Speaker, -
ABOUT HOW CUSTOMER FUNDS
|
| 02:53:23 |
Unidentified Speaker, -
WENT MISSING. THE BOTTLE WAS FULL AND THE WATER BELOW THIS LAWNS TO CUSTOMERS THAT REPORTED IN THAT CLASS. EXCEPT FOR THE FACT THAT IF SOMEBODY --...
|
| 02:54:06 |
Unidentified Speaker, -
SO THE WAY THE MONEY WENT MISSING WAS THAT PEOPLE TOOK OUT MONEY THAT SHOULD NOT HAVE BEEN TAKEN OUT? >> AS FAR AS I CAN MAKE OUT IN THE PRESS REPORTS,...
|
| 02:54:15 |
Unidentified Speaker, -
I WANT TO THINK THIS PANEL AND THE PREVIOUS PANEL.
|
| 02:54:19 |
Unidentified Speaker, -
I WOULD LIKE TO THANK THE MEMBERS AND RANKING MEMBER. THIS IS AN
|
| 02:54:23 |
Unidentified Speaker, -
IMPORTANT HEARING, AND IT IS IMPORTANT NOT ONLY TO THE PEOPLE THAT LOST MONEY IN THE MF GLOBAL, BUT IT IS IMPORTANT TO THE MARKETPLACE AND MR. ROTH...
|
| 02:55:59 |
Unidentified Speaker, -
JET. AND
|
NOTE: The transcript for this program was compiled from uncorrected Closed Captioning.