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The CFTC has won a consent order against MF Global requiring it to pay $1.212 billion in restitution to customers and a further $100 million civil penalty:

• *MF GLOBAL TO PAY $1.2 BLN RESTITUTION, $100M PENALTY
• *CFTC:PENALTY TO BE PAID AFTER MF FULLY PAYS CUSTOMERS/CREDITORS
• *CFTC:LITIGATION CONTINUES VS CORZINE,O’BRIEN,MF GLOBAL HOLDINGS
• *CFTC: MF GLOBAL ADMITS TO ALLEGATIONS OF LIABILITY IN ORDER

The big question is – of course – where is the money coming from?

Full CFTC Statement:

The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court consent Order against Defendant MF Global Inc. (MF Global) requiring it to pay $1.212 billion in restitution to customers of MF Global to ensure customers recover their losses sustained when MF Global failed in 2011.

 

The consent Order, entered on November 8, 2013 by U.S. District Court Judge Victor Marrero of the U.S. District Court for the Southern District of New York, also imposes a $100 million civil monetary penalty on MF Global, to be paid after MF Global has fully paid customers and certain other creditors entitled to priority under bankruptcy law. The Trustee for MF Global obtained permission from the bankruptcy court to pay restitution in full to customers to remedy any shortfall with funds of the MF Global general estate.

 

The consent Order arises out of the CFTC’s complaint, filed on June 27, 2013, charging MF Global and the other Defendants with unlawful use of customer funds (see CFTC Press Release 6626-13, June 27, 2013). In the consent Order, MF Global admits to the allegations pertaining to its liability based on the acts and omissions of its employees as set forth in the consent Order and the Complaint. The CFTC’s litigation continues against the remaining defendants: MF Global Holdings Ltd., Jon S. Corzine, and Edith O’Brien.

 

Gretchen Lowe, Acting Director of the CFTC’s Division of Enforcement, stated, “Division staff have worked tirelessly to ensure that 100 percent restitution be awarded to satisfy customer losses. The CFTC will continue to ensure that those who violate U.S. commodity laws and regulations designed to protect customer funds will be vigorously prosecuted.”

The CFTC’s Complaint charged MF Global, a registered Futures Commission Merchant (FCM), with violating provisions of the Commodity Exchange Act and CFTC Regulations intended to protect FCM customer funds and requiring diligent supervision by registrants. Specifically, the Complaint charged that during the last week of October 2011, MF Global unlawfully used customer segregated funds to support its own proprietary operations and the operations of its affiliates. In addition to the misuse of customer funds, the Complaint alleged that MF Global

 

(i) unlawfully failed to notify the CFTC immediately when it knew or should have known of the deficiencies in its customer accounts,

 

(ii) made false statements in reports it filed with the CFTC that failed to show the deficits in the customer accounts,

 

(iii) used customer funds for impermissible investments in securities that were not considered readily marketable or highly liquid in violation of CFTC regulation, and

 

(iv) failed to diligently supervise the handling of commodity interest accounts carried by MF Global and the activities of its partners, officers, employees, and agents.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/mZ7BUuyO0sY/story01.htm Tyler Durden

The CFTC has won a consent order against MF Global requiring it to pay $1.212 billion in restitution to customers and a further $100 million civil penalty:

• *MF GLOBAL TO PAY $1.2 BLN RESTITUTION, $100M PENALTY
• *CFTC:PENALTY TO BE PAID AFTER MF FULLY PAYS CUSTOMERS/CREDITORS
• *CFTC:LITIGATION CONTINUES VS CORZINE,O’BRIEN,MF GLOBAL HOLDINGS
• *CFTC: MF GLOBAL ADMITS TO ALLEGATIONS OF LIABILITY IN ORDER

The big question is – of course – where is the money coming from?

Full CFTC Statement:

The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court consent Order against Defendant MF Global Inc. (MF Global) requiring it to pay $1.212 billion in restitution to customers of MF Global to ensure customers recover their losses sustained when MF Global failed in 2011.

 

The consent Order, entered on November 8, 2013 by U.S. District Court Judge Victor Marrero of the U.S. District Court for the Southern District of New York, also imposes a $100 million civil monetary penalty on MF Global, to be paid after MF Global has fully paid customers and certain other creditors entitled to priority under bankruptcy law. The Trustee for MF Global obtained permission from the bankruptcy court to pay restitution in full to customers to remedy any shortfall with funds of the MF Global general estate.

 

The consent Order arises out of the CFTC’s complaint, filed on June 27, 2013, charging MF Global and the other Defendants with unlawful use of customer funds (see CFTC Press Release 6626-13, June 27, 2013). In the consent Order, MF Global admits to the allegations pertaining to its liability based on the acts and omissions of its employees as set forth in the consent Order and the Complaint. The CFTC’s litigation continues against the remaining defendants: MF Global Holdings Ltd., Jon S. Corzine, and Edith O’Brien.

 

Gretchen Lowe, Acting Director of the CFTC’s Division of Enforcement, stated, “Division staff have worked tirelessly to ensure that 100 percent restitution be awarded to satisfy customer losses. The CFTC will continue to ensure that those who violate U.S. commodity laws and regulations designed to protect customer funds will be vigorously prosecuted.”

The CFTC’s Complaint charged MF Global, a registered Futures Commission Merchant (FCM), with violating provisions of the Commodity Exchange Act and CFTC Regulations intended to protect FCM customer funds and requiring diligent supervision by registrants. Specifically, the Complaint charged that during the last week of October 2011, MF Global unlawfully used customer segregated funds to support its own proprietary operations and the operations of its affiliates. In addition to the misuse of customer funds, the Complaint alleged that MF Global

 

(i) unlawfully failed to notify the CFTC immediately when it knew or should have known of the deficiencies in its customer accounts,

 

(ii) made false statements in reports it filed with the CFTC that failed to show the deficits in the customer accounts,

 

(iii) used customer funds for impermissible investments in securities that were not considered readily marketable or highly liquid in violation of CFTC regulation, and

 

(iv) failed to diligently supervise the handling of commodity interest accounts carried by MF Global and the activities of its partners, officers, employees, and agents.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/mZ7BUuyO0sY/story01.htm Tyler Durden

Two months ago I answered the query, Is There A Bubble In The Canadian Condo Market? for my subscribers. The missive started off like this: 

The Canadian condo market is running into a precarious over-supply situation with large inventories slated to be entering the market in 2014 and 2015. Major centers such as Vancouver, Montreal and Toronto are witnessing a rapid pace of condo construction, despite falling sales. The demand for housing overall is slowing down, with sales in the last few months of 2013 falling on y-on-y basis. In most major Canadian markets there is an increase in listings and decrease in sales (even though prices are still somehow rising, which should in and of itself be indicative of a problem). 

Well, the Financial Times is now weighing in on the issue… Canada’s housing market teeters precariously

Robert MacFarlane, a long-time crane operator, surveys his empire from the top of one of Toronto’s flashy new apartment buildings. “I can see more than 50 tower cranes,” said Mr MacFarlane, whose bird’s-eye photography from the country’s tallest crane has gained him online notoriety as interest in Toronto’s property sector escalates.

These cranes – which can offer clues to bubble-like conditions – emerged in response to lofty demand for condominiums from investors and homebuyers taking advantage of Canada’s ultra-low interest rates.

This is a fact. I’ve observed this in the bubble markets that I’ve personally experienced: Miama, NYC, DC – cranes and construction galore. In retrospect it appears virtually impossible for anyone NOT to realize we were in a bubble.

But as home prices rally and construction projects proliferate – particularly in Toronto, Montreal and Vancouver – industry analysts say the country’s property sector is perched precariously at its peak.

David Madani, economist at Capital Economics, believes the nation is on the verge “of what will prove to be a prolonged correction”.

“Canada’s housing market exhibits many of the symptoms that preceded disruptive housing downturns in other developed economies, namely overbuilding, overvaluation and excessive household debt,” he adds.

Mr Madani’s comments chime with a chorus of policy makers, rating agencies and hedge fund managers who have warned of the risks posed by Canada’s overheated housing market.

Alongside Norway and New Zealand, Canada’s overvalued property sector is most vulnerable to a price correction, according to a recent OECD report. It is especially at risk if borrowing costs rise or income growth slows.

And why in the world would borrowing costs rise with all of the world’s most powerful central banks pushing #ZIRP4EVA???

 

In its latest monetary policy report, the Bank of Canada, the nation’s central bank, noted: “The elevated level of household debt and stretched valuations in some segments of the housing market remain an important downside risk to the Canadian economy.”

The riskiest mortgages are guaranteed by taxpayers through the Canada Mortgage and Housing Corporation, somewhat insulating the financial sector from the sort of meltdown endured by Wall Street in 2007 and 2008. But a collapse in home sales and prices would be a serious blow to consumer spending and the construction industry that employs 7 per cent of Canada’s workforce.

But isn’t that a circular argument???

…the flipside of a low interest rate policy designed to buttress the economy has meant that household debt levels have hit record highs as homebuyers stretched themselves to jump into the housing market. That in turn propelled demand and prices.

… Household debt has risen to 163 per cent of disposable income, according to Statistics Canada, while separate data show a quarter of Canadian households spend at least 30 per cent of their income on housing. This is close to the 1996 record when mortgage rates were substantially higher.

On a price-to-rent basis, which measures the profitability of owning a house, Canada’s house prices are more than 60 per cent higher than their long-term average, the OECD says.

… Year-to-date new home sales in the Greater Toronto Area – an area accounting for a fifth of Canada’s home building activity – are down by half from two years ago, according to the Building Industry and Land Development Association.

… Mr Madani forecasts a market correction in home prices over the next few years, predicting a 25 per cent drop.

But those that are bullish on the market point to resilient regional data. October sales of existing homes rose 38 per cent in Vancouver and 19 per cent in Toronto.

“It’s a mistake to think that what happened in the US will happen in Canada,” said Gregory Klump, CREA’s chief economist said.

Yes, because this time it’s different!!!

… Mr MacFarlane too has yet to be convinced of an imminent slowdown. “In the past when things have slowed down, there has been a distinct ‘feeling’ from the boots on the ground perspective. I don’t really sense that right now.”

Nothing like that good ‘ole empirical forensic analysis to make an investor feel all warm and cozy, right?!

All paying subscribers, feel free to download.

More on this topic…

1.  
   

   1. The Canadian Real Estate Bubble? Featured –Jul 25, 2012 – Below is an email that I recieved from a reader: RIO Canada is one of the biggest reit’s in Canada I know some of there management and from 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/0MBFdj0m6CQ/story01.htm Reggie Middleton

Two months ago I answered the query, Is There A Bubble In The Canadian Condo Market? for my subscribers. The missive started off like this: 

The Canadian condo market is running into a precarious over-supply situation with large inventories slated to be entering the market in 2014 and 2015. Major centers such as Vancouver, Montreal and Toronto are witnessing a rapid pace of condo construction, despite falling sales. The demand for housing overall is slowing down, with sales in the last few months of 2013 falling on y-on-y basis. In most major Canadian markets there is an increase in listings and decrease in sales (even though prices are still somehow rising, which should in and of itself be indicative of a problem). 

Well, the Financial Times is now weighing in on the issue… Canada’s housing market teeters precariously

Robert MacFarlane, a long-time crane operator, surveys his empire from the top of one of Toronto’s flashy new apartment buildings. “I can see more than 50 tower cranes,” said Mr MacFarlane, whose bird’s-eye photography from the country’s tallest crane has gained him online notoriety as interest in Toronto’s property sector escalates.

These cranes – which can offer clues to bubble-like conditions – emerged in response to lofty demand for condominiums from investors and homebuyers taking advantage of Canada’s ultra-low interest rates.

This is a fact. I’ve observed this in the bubble markets that I’ve personally experienced: Miama, NYC, DC – cranes and construction galore. In retrospect it appears virtually impossible for anyone NOT to realize we were in a bubble.

But as home prices rally and construction projects proliferate – particularly in Toronto, Montreal and Vancouver – industry analysts say the country’s property sector is perched precariously at its peak.

David Madani, economist at Capital Economics, believes the nation is on the verge “of what will prove to be a prolonged correction”.

“Canada’s housing market exhibits many of the symptoms that preceded disruptive housing downturns in other developed economies, namely overbuilding, overvaluation and excessive household debt,” he adds.

Mr Madani’s comments chime with a chorus of policy makers, rating agencies and hedge fund managers who have warned of the risks posed by Canada’s overheated housing market.

Alongside Norway and New Zealand, Canada’s overvalued property sector is most vulnerable to a price correction, according to a recent OECD report. It is especially at risk if borrowing costs rise or income growth slows.

And why in the world would borrowing costs rise with all of the world’s most powerful central banks pushing #ZIRP4EVA???

 

In its latest monetary policy report, the Bank of Canada, the nation’s central bank, noted: “The elevated level of household debt and stretched valuations in some segments of the housing market remain an important downside risk to the Canadian economy.”

The riskiest mortgages are guaranteed by taxpayers through the Canada Mortgage and Housing Corporation, somewhat insulating the financial sector from the sort of meltdown endured by Wall Street in 2007 and 2008. But a collapse in home sales and prices would be a serious blow to consumer spending and the construction industry that employs 7 per cent of Canada’s workforce.

But isn’t that a circular argument???

…the flipside of a low interest rate policy designed to buttress the economy has meant that household debt levels have hit record highs as homebuyers stretched themselves to jump into the housing market. That in turn propelled demand and prices.

… Household debt has risen to 163 per cent of disposable income, according to Statistics Canada, while separate data show a quarter of Canadian households spend at least 30 per cent of their income on housing. This is close to the 1996 record when mortgage rates were substantially higher.

On a price-to-rent basis, which measures the profitability of owning a house, Canada’s house prices are more than 60 per cent higher than their long-term average, the OECD says.

… Year-to-date new home sales in the Greater Toronto Area – an area accounting for a fifth of Canada’s home building activity – are down by half from two years ago, according to the Building Industry and Land Development Association.

… Mr Madani forecasts a market correction in home prices over the next few years, predicting a 25 per cent drop.

But those that are bullish on the market point to resilient regional data. October sales of existing homes rose 38 per cent in Vancouver and 19 per cent in Toronto.

“It’s a mistake to think that what happened in the US will happen in Canada,” said Gregory Klump, CREA’s chief economist said.

Yes, because this time it’s different!!!

… Mr MacFarlane too has yet to be convinced of an imminent slowdown. “In the past when things have slowed down, there has been a distinct ‘feeling’ from the boots on the ground perspective. I don’t really sense that right now.”

Nothing like that good ‘ole empirical forensic analysis to make an investor feel all warm and cozy, right?!

All paying subscribers, feel free to download.

More on this topic…

1.  
   

   1. The Canadian Real Estate Bubble? Featured –Jul 25, 2012 – Below is an email that I recieved from a reader: RIO Canada is one of the biggest reit’s in Canada I know some of there management and from 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/0MBFdj0m6CQ/story01.htm Reggie Middleton

As Silk Road emerged from the “dark-web”, other sites have appeared offering services that are frowned upon by most. As Forbes reports, perhaps the most-disturbing is “The Assassination Market” run by a pseudnymous Kuwabatake Sanjuro. The site, remarkably, a crowdfunding service that lets anyone anonymously contribute bitcoins towards a bounty on the head of any government official–a kind of Kickstarter for political assassinations. As Forbes reports, NSA Director Alexander and President Obama have a BTC40 bounty (~$24,000) but the highest bounty – perhaps not entirely surprising – is BTC 124.14 (~$75,000) for none other than Ben Bernanke. Sanjuro’s raison d’etre is chilling, “as a few politicians gets offed and they realize they’ve lost the war on privacy, the killings can stop and we can transition to a phase of peace, privacy and laissez-faire.”

 

Via Forbes,

As Bitcoin becomes an increasingly popular form of digital cash, the cryptocurrency is being accepted in exchange for everything from socks to sushi to heroin. If one anarchist has his way, it’ll soon be used to buy murder, too.

 

…

 

For now, the site’s rewards are small but not insignificant. In the four months that Assassination Market has been online, six targets have been submitted by users, and bounties have been collected ranging from ten bitcoins for the murder of NSA director Keith Alexander and 40 bitcoins for the assassination of President Barack Obama to 124.14 bitcoins–the largest current bounty on the site–targeting Ben Bernanke, chairman of the Federal Reserve and public enemy number one for many of Bitcoin’s anti-banking-system users. At Bitcoin’s current rapidly rising exchanges rate, that’s nearly $75,000 for Bernanke’s would-be killer.

 

…

 

Sanjuro’s grisly ambitions go beyond raising the funds to bankroll a few political killings. He believes that if Assassination Market can persist and gain enough users, it will eventually enable the assassinations of enough politicians that no one would dare to hold office. He says he intends Assassination Market to destroy “all governments, everywhere.”

 

“I believe it will change the world for the better,” writes Sanjuro, who shares his handle with the nameless samurai protagonist in the Akira Kurosawa film “Yojimbo.” (He tells me he chose it in homage to creator of the online black market Silk Road, who called himself the Dread Pirate Roberts, as well Bitcoin inventor Satoshi Nakamoto.)  ”Thanks to this system, a world without wars, dragnet panopticon-style surveillance, nuclear weapons, armies, repression, money manipulation, and limits to trade is firmly within our grasp for but a few bitcoins per person. I also believe that as soon as a few politicians gets offed and they realize they’ve lost the war on privacy, the killings can stop and we can transition to a phase of peace, privacy and laissez-faire.”

 

…

 

Like other so-called “dark web” sites, Assassination Market runs on the anonymity network Tor, which is designed to prevent anyone from identifying the site’s users or Sanjuro himself.

 

…

 

As for technically proving that an assassin is responsible for a target’s death, Assassination Market asks its killers to create a text file with the date of the death ahead of time, and to use a cryptographic function known as a hash to convert it to a unique string of characters.

 

…

 

“I am a crypto-anarchist,” Sanjuro concludes. “We have a bright future ahead of us.”

Read more here…

Of course – this will likely be another reason for TPTB to ban bitcoin…

The reporter contacted the Secret Service and the FBI to ask if they’re investigating Assassination Market, and both declined to comment.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CFYzkQgc_rU/story01.htm Tyler Durden

As Silk Road emerged from the “dark-web”, other sites have appeared offering services that are frowned upon by most. As Forbes reports, perhaps the most-disturbing is “The Assassination Market” run by a pseudnymous Kuwabatake Sanjuro. The site, remarkably, a crowdfunding service that lets anyone anonymously contribute bitcoins towards a bounty on the head of any government official–a kind of Kickstarter for political assassinations. As Forbes reports, NSA Director Alexander and President Obama have a BTC40 bounty (~$24,000) but the highest bounty – perhaps not entirely surprising – is BTC 124.14 (~$75,000) for none other than Ben Bernanke. Sanjuro’s raison d’etre is chilling, “as a few politicians gets offed and they realize they’ve lost the war on privacy, the killings can stop and we can transition to a phase of peace, privacy and laissez-faire.”

 

Via Forbes,

As Bitcoin becomes an increasingly popular form of digital cash, the cryptocurrency is being accepted in exchange for everything from socks to sushi to heroin. If one anarchist has his way, it’ll soon be used to buy murder, too.

 

…

 

For now, the site’s rewards are small but not insignificant. In the four months that Assassination Market has been online, six targets have been submitted by users, and bounties have been collected ranging from ten bitcoins for the murder of NSA director Keith Alexander and 40 bitcoins for the assassination of President Barack Obama to 124.14 bitcoins–the largest current bounty on the site–targeting Ben Bernanke, chairman of the Federal Reserve and public enemy number one for many of Bitcoin’s anti-banking-system users. At Bitcoin’s current rapidly rising exchanges rate, that’s nearly $75,000 for Bernanke’s would-be killer.

 

…

 

Sanjuro’s grisly ambitions go beyond raising the funds to bankroll a few political killings. He believes that if Assassination Market can persist and gain enough users, it will eventually enable the assassinations of enough politicians that no one would dare to hold office. He says he intends Assassination Market to destroy “all governments, everywhere.”

 

“I believe it will change the world for the better,” writes Sanjuro, who shares his handle with the nameless samurai protagonist in the Akira Kurosawa film “Yojimbo.” (He tells me he chose it in homage to creator of the online black market Silk Road, who called himself the Dread Pirate Roberts, as well Bitcoin inventor Satoshi Nakamoto.)  ”Thanks to this system, a world without wars, dragnet panopticon-style surveillance, nuclear weapons, armies, repression, money manipulation, and limits to trade is firmly within our grasp for but a few bitcoins per person. I also believe that as soon as a few politicians gets offed and they realize they’ve lost the war on privacy, the killings can stop and we can transition to a phase of peace, privacy and laissez-faire.”

 

…

 

Like other so-called “dark web” sites, Assassination Market runs on the anonymity network Tor, which is designed to prevent anyone from identifying the site’s users or Sanjuro himself.

 

…

 

As for technically proving that an assassin is responsible for a target’s death, Assassination Market asks its killers to create a text file with the date of the death ahead of time, and to use a cryptographic function known as a hash to convert it to a unique string of characters.

 

…

 

“I am a crypto-anarchist,” Sanjuro concludes. “We have a bright future ahead of us.”

Read more here…

Of course – this will likely be another reason for TPTB to ban bitcoin…

The reporter contacted the Secret Service and the FBI to ask if they’re investigating Assassination Market, and both declined to comment.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CFYzkQgc_rU/story01.htm Tyler Durden