From customer accounts of Mf global a few hundred million dollars are missing. This is what federal investigators called to examine the fund's accounts are ascertaining Jon Corzine, the former partner of Mediobanca who was governor of New Jersey. The shortages are linked, to an initial reconstruction, to the attempt to deal in extremis with the crisis of the broker who in the last week has knocked in vain on the doors of the most famous institutions in Manhattan. A practice prohibited by law which imposes a clear separation between own investments and the use of clients' money.
Corzine, using the Goldman Sachs XNUMXs strategy, concentrated the portfolio on a few investment ideas, regardless of the initial market response. For this reason, for about a year, it has invested massively in the public debt of the Eurozone with a particular effort towards the Italian BTPs representing around half of its $6,3 billion government bond portfolio. But the debt exposure seemed excessive to the rating agencies who ordered MF Global to rebuild the margins, on pain of demotion to junk bond, which promptly happened.
Before failing MF Global, whose shares had lost 67% in the space of a week, tried to secure some assets, according to the technique already used by Lehman Brothers, by selling the portfolio to Interactive Brokers. But it was on that occasion, in the night between Sunday and Monday, that the potential buyer discovered that the funds of many private customers were missing.
