What is in this article?:
- MF Global questions remain despite investigations and hearings
- Next witnesses
- Freeh, class-actions
- Congressional investigation brings in MF Global back-room team.
- Farmer/rancher funds lost in MF Global collapse.
- Firm suspected of comingling customer funds illegally.
- Will former trasurer plead fifth?
What about (former FBI head and current MF Global creditor trustee) Louis Freeh and the bonus imbroglio (for more, see here)? Also, isn’t Freeh working with Penn State on the Sandusky scandal?
“That’s right, he is.
“As for the bonuses, all that goes away if you’re in Chapter 7. You don’t pay retention bonuses to people who aren’t going to be working for a firm that won’t exist.
“To say we have to pay a six-figure retention bonus to Abelow — who has made over $7 million from MF Global — is the kind of thing that people see and say ‘all our institutions are corrupt.’ The judiciary will say it’s fine that someone involved in a firm that was perfectly viable a year ago and then exploded and stole people’s money is paid a ludicrous bonus?
“I can’t believe you’d put that out there.
“Again, if this was in Chapter 7 where it should be, this wouldn’t even be a concern.
“Freeh has a job to do. But his incentives are to marshal assets for the creditors of that corporation. That runs counter to our incentives, to our trustee’s incentives. (The MF Global client trustee, James Giddens) is looking at this as an advocate for customers.
“The customer trustee and Freeh will bump heads because Freeh is an advocate for the creditors, including the two largest banks in the country. As he continues to shill for them there will be a lot of outrageous things coming down the pike. Will people stand up and make enough noise saying ‘hey, we see this. We know it’s going on and it must stop.’”
What about the class-action cases being prepped? Specifically the one the CCC is involved with?
“We’ve known the class-actions would move in. … They’ll all be consolidated, we think, into one big class-action. It will take on the insurance, the firm and everything else.
“I’ve been very critical of class-action lawsuits because, more times than not, they’re a mechanism only for lawyers to make money. Claimants get nothing — or coupons….
“We’ll work and fight to ensure that doesn’t happen here. If there is recovery here, lawyers should get their piece because they have expenses. I understand all that. But let’s make sure that the people actually missing money see some money.”
On Roe’s recent MF Global presentation (see here) to the Grain & Feed Association of Illinois…
“I was talking to a group of people all impacted by the MF Global collapse. They were farmers, grain elevators, co-ops, people who provided services to them.
“They had a bunch of great, pointed questions. I just wanted to bring them up to speed on what happened at MF Global, why it happened, what we think the policy response should be and how long it will take to get recoveries back. Also, what strategies can be employed to stretch out operational risk a bit to make sure if something like (MF Global) happens again that all their eggs aren’t in one basket.”
“If you’re someone who has been impacted by this, do what you can to keep it in the press. When this starts to die down, nothing good will happen for clients and they’ll get checks in eight years.
“If we keep pushing both trustees, pushing the judge, pushing Congress, pushing the regulators, they’ll want to finish this up. They’ve got other things to work on.”