Bolitics The New Condem Government

[JulieB]

Bloomberg today have just posted this article:

Covering the scandalous legal battle over property rights - being fought over MF Global Bankruptcy Assets that I've mentioned in previous posts and Gonzalis Lira talks about in the interview I posted from "On the Edge".

A fight over Customer Accounts that were supposed to be segragated from the company accounts.

Last year IIRC the FSA fined JPMorgan a whopping £33M for NOT keeping client accounts segregated from their trading accounts and using the assets for their own profit.

Now this has moved matters to a whole new ball game!

MF Global Clients May Lose in $700M Fights

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.

MF Global filed the fifth-largest bankruptcy for a financial company Oct. 31 after placing losing bets on European debt.

“There appears to be continuing uncertainty over the $700 million claimed as client money by the U.S. trustee,” said Sean Donovan-Smith, an attorney at Speechly Bircham LLP in London who represents clients and creditors of MF Global’s U.K. unit. “Some of our clients are worried that this could impact the client money claims that have been made and they would like to see this addressed as soon as possible.”

Lehman Dispute

A dispute over client money held by Lehman Brothers International Europe is still being fought out in U.K. courts more than three years after the bank collapsed.

KPMG was appointed special administrator of MF Global’s U.K. unit on Oct. 31. While KPMG has found all the money in protected accounts, MF Global Inc.’s claim is the first serious threat to the return of customer funds in the U.K.

“We are aware of the trustee’s claim on the client money pool,” KPMG administrator Richard Heis said in a statement. “We do not agree with it but will continue to work constructively with his team to bring about an early resolution of the matter.”

In the U.S. bankruptcy, trustees said as much as $1.2 billion is missing from segregated accounts. Jon S. Corzine, MF Global’s former chief executive officer, has apologized to customers and employees affected by the collapse.

Unsecured Claim

KPMG was forced to set aside funds pending the resolution of the dispute, which means it can’t return the majority of money it has recovered to customers, people with knowledge of the matter said. It wants the $700 million to be treated as an unsecured claim, which would be paid after clients get reimbursed from the customer money pool.

“The Trustee strongly believes these funds were segregated for U.S. customers who traded on foreign exchanges and, thus, should be returned to those customers,” Jarrell said. Giddens has hired law firm Slaughter and May to handle the dispute, according to New York court documents.

Giddens told the New York court last month the dispute would “significantly affect, in the near term, my ability to return a substantial amount to U.S. customers dealing in foreign futures.”

Frozen Accounts

Around $1.2 billion of U.K. customer money was frozen in segregated accounts at external banks when MF Global collapsed. More than 1 billion pounds ($1.57 billion) was held in unsegregated accounts, which lack special protection. Those with unsegregated funds are being treated as unsecured creditors, KPMG said at a Jan. 9 creditors meeting.

“The regulators failed to make certain that segregated funds couldn’t be moved without authorization from someone independent of MF Global,” said Douglas Makepeace of New York- based Sperry Fund Management, which had money in a segregated U.K. client account. “Once the money is gone, litigation is a poor remedy, with no certainty of recovery.”

KPMG, which has yet to return any money, has said it will make an initial payment to segregated account holders soon after a London court hearing scheduled for Feb. 3. The firm posted a document on its website last week explaining its treatment of customer funds and how it has accumulated fees of 14 million pounds in three months of working on the administration.

Regulators in the U.S are investigating whether MF Global Holdings Ltd. intentionally used customer funds to cover the bankrupt firm’s margin payments on European government bond trades, according to people with knowledge of the probe.

The brokerage case is: Securities Investor Protection Corp. v. MF Global Inc., 11-02790, U.S. District Court, Southern District of New York (Manhattan). The parent company’s bankruptcy case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Link

And as a consequence of the 5th largest bankruptcy in US history being filed last October, have the US/UK governments done ANYTHING to STOP an investment bank being able to place such massive bets on European Debts and LOSE that they take the company down with them? To the extent of putting client accounts at risk...... Of course not!

What's more this is a scandalous example of how Wall St & the City of London is now nothing more than a glorified betting shop - which has received next to no mainstream media coverage...... Hmm I wonder why?!!!

[snowychap]

Lies, Lies and Tory lies as usual

As many of our Twitter followers have suggested before, with his constant slip ups on job stats, the only people Mr Cameron is managing to keep firmly in employment is the FactCheck team.

[CarewsEyebrowDesigner]

Financial Transaction Tax.

Get it imposed and stop pissing about in Davos, chaps.

I'm truly shocked Cameron thinks it is madness. I mean it's not like the City will be dead against it and squeeze the PM's testes a little to ensure it doesn't happen? Surely not.

[VILLAFC2000]

Who will probably have to work a lot longer for a lot less of a penison.

To be honest which ever party gets in, will have to deal with this. How can we pay for pensions if we live longer and are pensionable for a longer time? Who is going to pay for it?

You just dont get it do you - These people entered into a contract you cant just come along and change it because it suits your political agenda.

If there is 32 billion to spend on a railway network there is money to sort this out.

What don’t I get? I am talking about the whole population, of private and public pensions. Its unsustainable if we kept to previous promises. We can bury our head in the sand and say lets stay as it is, but frankly then we are causing further promises along the line to future generations. It doesn’t matter which party you belong to; these issues are going to have to be dealt with the Tories, Labour, SNP, Lib Dems

And I am not sure what the railway has to do with it. You could say that about anything; how much are we paying on building aircraft carriers? or what would replace Trident? or on road construction? on Crossrail? We can’t just spend money on pensions...

Theres no money to spend remember...? there is this hudge deficit we have to pay back. But its OK to spend 32 billion on a railway that 95% of the population wont ever use..!

Issue here is nothing to with the affordability of public sector pensions since their cost is projected to fall as a share of GDP in coming years. The government are performing the usual divide and rule tactic: their *logic* seems to be that since private sector pensions are sh*te then they should decimate public sector pensions.

[VILLAFC2000]

You just dont get it do you - These people entered into a contract you cant just come along and change it because it suits your political agenda.

thats exactly what they did when the previous government came along and changed them all so which political agenda are we playing to in this instance ?

The Tories don't believe in the public sector they never have done and probably never will, There fore its not in their interests to look after the people working in the public sector. Hence more having to work longer for less - thats the agenda.

[VILLAFC2000]

You just dont get it do you - These people entered into a contract you cant just come along and change it because it suits your political agenda.

thats exactly what they did when the previous government came along and changed them all so which political agenda are we playing to in this instance ?

The last Gov't negotiated and agreed a change with the people affected. Not sure that this Gov't has done that.

There was a public sector strike over pensions under the last government, let's not forget. At a time when finances weren't quite so stretched.

and your point...?!

[tonyh29]

You just dont get it do you - These people entered into a contract you cant just come along and change it because it suits your political agenda.

thats exactly what they did when the previous government came along and changed them all so which political agenda are we playing to in this instance ?

The Tories don't believe in the public sector they never have done and probably never will, There fore its not in their interests to look after the people working in the public sector. Hence more having to work longer for less - thats the agenda.

it was labour that proposed / introduced the increase in retirement age was it not ..

[VILLAFC2000]

You just dont get it do you - These people entered into a contract you cant just come along and change it because it suits your political agenda.

thats exactly what they did when the previous government came along and changed them all so which political agenda are we playing to in this instance ?

The Tories don't believe in the public sector they never have done and probably never will, There fore its not in their interests to look after the people working in the public sector. Hence more having to work longer for less - thats the agenda.

it was labour that proposed / introduced the increase in retirement age was it not ..

who sorry...?

[drat01]

it was labour that proposed / introduced the increase in retirement age was it not ..

Nice bit of spin there Tony :-)

link

As the article shows Gideon's plans are far more hitting in raising the retirement age and bringing forward the timescales.

After saying that, we have seen time after time with this Gvmt that what they say and what they mean and do are unlikely to be the same. It seems that Tory lies are now a daily event

[drat01]

Financial Transaction Tax.

Get it imposed and stop pissing about in Davos, chaps.

I'm truly shocked Cameron thinks it is madness. I mean it's not like the City will be dead against it and squeeze the PM's testes a little to ensure it doesn't happen? Surely not.

Those donations to the Tory party were coincidental don't you know

[PauloBarnesi]

Theres no money to spend remember...? there is this hudge deficit we have to pay back. But its OK to spend 32 billion on a railway that 95% of the population wont ever use..!

There is money to spend. Just not as much as one would hope.

For years and years Britain has suffered from poor transport infastructure. As you will know the Labour party carried out much of the Beeching cuts, whilst refusing to invest properly in things like intercity transport (despite saying they wouldn’t cut the lines). Successive governments have continued this strange policy, ultimately leading to the curious situation of private companies getting more support than BR ever did. Britain needs too look seriously at its rail network. You could spend money on HS2 or you could electrify more lines, improve lines. One thing is for sure you need to spend that money on the transport system. You can say that only 5% will use it, but you could say that about a huge range of things.

As I ve pointed out, how much will motorway building cost in the next thirty years? How much have we spent over the last 50 years on motorways, and how much on railways? How much have we spent on computer systems that don’t work? On planes like Concorde or TSR2?

Any government will be forced to make decisions; in this case is infrastructure worth investing in, or should we spend it on something else? France, and Germany have massively invested in modern rail systems. We need to do the same.

[PauloBarnesi]

Financial Transaction Tax.

Get it imposed and stop pissing about in Davos, chaps.

I'm truly shocked Cameron thinks it is madness. I mean it's not like the City will be dead against it and squeeze the PM's testes a little to ensure it doesn't happen? Surely not.

Those donations to the Tory party were coincidental don't you know

Aren’t all political parties beholden to the donors; note how the HS2 line has been altered to benefit some Tory grandee? Or how Labour has had its policy changed to suit interested parties? And I note the LibDems haven’t returned the money from the convicted fraudster...

Maybe all parties should stop accepting donations above a certain amount? Say £5?

[tonyh29]

Maybe all parties should stop accepting donations above a certain amount? Say £5?

Luckily for them the labour party doesn't have this dilemma these days :-)

[tonyh29]

it was labour that proposed / introduced the increase in retirement age was it not ..

Nice bit of spin there Tony :-)

link

As the article shows Gideon's plans are far more hitting in raising the retirement age and bringing forward the timescales.

After saying that, we have seen time after time with this Gvmt that what they say and what they mean and do are unlikely to be the same. It seems that Tory lies are now a daily event

Don't make me use Let me google that for you :-)

The Turner reforms on Pension were Labour indeed it was the very same reforms that prompted Brown to blackmail Blair over cash for honours... Blair went ahead and surprise surprise Blair got a visit from the rozzers

[VILLAFC2000]

Theres no money to spend remember...? there is this hudge deficit we have to pay back. But its OK to spend 32 billion on a railway that 95% of the population wont ever use..!

There is money to spend. Just not as much as one would hope.

For years and years Britain has suffered from poor transport infastructure. As you will know the Labour party carried out much of the Beeching cuts, whilst refusing to invest properly in things like intercity transport (despite saying they wouldn’t cut the lines). Successive governments have continued this strange policy, ultimately leading to the curious situation of private companies getting more support than BR ever did. Britain needs too look seriously at its rail network. You could spend money on HS2 or you could electrify more lines, improve lines. One thing is for sure you need to spend that money on the transport system. You can say that only 5% will use it, but you could say that about a huge range of things.

As I ve pointed out, how much will motorway building cost in the next thirty years? How much have we spent over the last 50 years on motorways, and how much on railways? How much have we spent on computer systems that don’t work? On planes like Concorde or TSR2?

Any government will be forced to make decisions; in this case is infrastructure worth investing in, or should we spend it on something else? France, and Germany have massively invested in modern rail systems. We need to do the same.

I have always campaigned for better public transport in the UK - its a no brainier. The UK has one of the poorest rail networks in Europe and thats saying something. The system went massively downhill in the 80s thanks to Thatcher and her privatision. I used the trains in the summer in Italy and France they it cost me 15 quid to travel about 300 miles in a spacious seat in no time at all and with no delays. I took a train journey a few months ago in the UK which was only about 7 miles it cost me £5 - cheers and was delayed..!

Its pretty unlikely that you will get a superb railway network system in the UK with a Torie government.

My point is this. Do you know how much extra investment in Schools, Hospitals, Police, Fire has been reduced and how many people have suffered as a direct consequence of this. The line has been - there is no money left. This is about priorities not about luxuries.

If you think that building a railway is more important than saving lives, education and welfare then thats your call.In due course sure its a great idea but not at the moment.

[VILLAFC2000]

it was labour that proposed / introduced the increase in retirement age was it not ..

Nice bit of spin there Tony :-)

link

As the article shows Gideon's plans are far more hitting in raising the retirement age and bringing forward the timescales.

After saying that, we have seen time after time with this Gvmt that what they say and what they mean and do are unlikely to be the same. It seems that Tory lies are now a daily event

Don't make me use Let me google that for you :-)

The Turner reforms on Pension were Labour indeed it was the very same reforms that prompted Brown to blackmail Blair over cash for honours... Blair went ahead and surprise surprise Blair got a visit from the rozzers

Get your facts stright sunbeam.

Its New Labour!

[PauloBarnesi]

If you think that building a railway is more important than saving lives, education and welfare then thats your call. In due course sure its a great idea but not at the moment.

You are always going to have to make a tough decision. The NHS isn’t as good as it could be. The education system isn’t as good as it could be, etc, etc. Unfortunately you can never spend enough to save every life, to educate every individual to the highest level, etc, etc. Even if time of boom, you can go through the figures and say we could spend more on the NHS, make pensions better, etc, etc. Both major parties are guilty of underinvestment in the future of the nation.

The £32 billion will never plug the gaps in any of those problems. It certainly won’t save the pension system.

Thatcher never privatised the railways; it was Major. The system had been going down since the 1900s, accelerated by two world wars. Nationalisation didn’t improve the situation, as it wasn’t followed by investment (under both parties). You could argue that if we had made hard decisions after WWII and streamlined the nationalised industries and made the right investment (electrification rather than hump yards), we would be in a much better place now.

[Awol]

You are always going to have to make a tough decision.

Quite. For reasons of electoral appeal the political class of western democracies are better at distributing benefits than apportioning sacrifices - even when the latter are required to restore economic solvency.

What many in the west are yet to grasp is the permanent nature of declining living standards. Money is a fickle bride and due to globalisation much of it has packed a bag, taken the dog and moved east.

[blandy]

For reasons of electoral appeal the political class of western democracies are better at distributing benefits than apportioning sacrifices - even when the latter are required to restore economic solvency.

What many in the west are yet to grasp is the permanent nature of declining living standards. Money is a fickle bride and due to globalisation much of it has packed a bag, taken the dog and moved east.

Some better than others, but you're right.

The only places who will not stagnate in the West are those which have natural resources (minerals etc) those which make lots of stuff (Germany) and those whose population is young and intelligent and educated and motivated.

[peterms]

Mr Cameron demonstrates empathy with the British Public regarding the effect on them (though oddly not on him) of the emergency austerity measures he has reluctantly been forced to impose against his better judgement because of the, er, truly appalling mess he has inherited and which his policies would not have made far worse, no not indeed, and in fact are making things much better, as we can all see...