Worse than a crime, a legalism

MF Global did worse than embezzle client funds. They embezzled client funds legally

Very large numbers of investors may be in the same position as MF Global’s investors, who thought they were investing in gold, businesses, and suchlike, but were in fact investing in Greek rioters, Italians on welfare, and public servants taking early retirement.

2 Responses to “Worse than a crime, a legalism”

  1. Occupant says:

    Doesn’t this vindicate proponents of financial regulation?

    MF Global was sidestepping American regulations by funneling client money to a less regulated jurisdiction.

    • jim says:

      We need a regulation to prohibit people from using your money to gamble on X to their benefit, when you think you are gambling on Y to your own benefit?

      Rehypothecation is a clear and flagrant violation of fiduciary duty – a flagrant violation of common law that is over a thousand years old.

      The regulations permitted actions that would have otherwise been illegal. Indeed, this is the essence of regulation – to protect bad behavior of the well connected – Jon Corzine being very well connected. The regulations exempted financial intermediaries from laws that have been in effect for over a thousand years.

      Indeed, chances are that the regulations were crafted specifically for this purpose, so that the well connected could channel investor funds into the taxpayer futures bubble, when investors are becoming alarmed that it is a bubble..

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