August 2013 • 45
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Calendar
August
20
Propane Gas Association of New England Maine Regional Dinner
Meeting,
5:30 p.m. networking; 6:15 start; Demillo’s on the Water,
Portland, Maine. Website:
. Phone: 888-445-1075.
22
Propane Gas Association of New England New Hampshire Regional
Dinner Meeting,
5:30 p.m. networking; 6:15 start; Puritan Backroom (Pappas
Room), Manchester, NH. Website:
Phone: 888-445-1075.
27
Propane Gas Association of New England Massachusetts Regional
Dinner Meeting,
5:30 p.m. networking; 6:15 start; Cal’s Wood-Fire Grill & Bar,
Springfield, MA. Website:
. Phone: 888-445-1075.
28
Propane Gas Association of New England Connecticut Regional Dinner
Meeting,
5:30 p.m. networking; 6:15 start; Baci Grill, Cromwell, CT. Website:
. Phone: 888-445-1075.
September
9
Fuel Merchants Association of New Jersey Golf Tournament,
Stanton
Ridge Golf & Country Club, Whitehouse Station, NJ. Phone: 973-467-1400.
Website:
15-17
Virginia Petroleum, Convenience and Grocery Association 65
th
Annual
Meeting,
The Greenbrier, White Sulphur Springs, WV. Website:
Phone: 804-282-7534. Email:
.
16-18
Pennsylvania PetroleumMarketers & Convenience Store Association Fall
Energy Conference & Annual Meeting,
Omni Bedford Springs Resort & Spa,
Bedford Springs, PA. Website:
. Phone: 717-939-1781.
19-20
Southern New England Energy Conference
(Massachusetts Oilheat Council,
Connecticut Energy Marketers Association and the Oilheat Institute of Rhode
Island), Mohegan Sun, Uncasville, Ct. Websites:
,
.
October
7
AltWheels Fleet Day,
Four Points by Sheraton, Norwood, MA.
Website:
. Phone: 508-698-6810.
E-mail:
11-12
PMAA Fall Meeting at The NACS Show,
Hyatt Regency Atlanta, Atlanta, GA.
Phone: 703-351-8000. Email:
.
Industry News
investments of the firm’s money. In the
summer and fall of 2011, as MF Global’s
need for cash was rising and its sources of
cash were diminishing, Corzine knew that
the firm was relying more and more on
proprietary funds that it held alongside cus-
tomer funds in FCM customer accounts.
During this time, Corzine did not
enhance MF Global’s deficient systems and
controls sufficiently to ensure that the firm’s
increasing reliance on FCM cash did not
result in unlawful uses of customer money.
Ultimately, these failures contributed to the
massive customer losses.
As alleged, during October 2011,
MF Global was on the brink of failure
and in desperate need of cash to survive.
As Holdings’ Treasurer told Holdings’ CFO
at that time, in one of many recorded phone
calls obtained by the CFTC, the firm was
“skating on the edge,” without “much
ice left.” Corzine was warned about the
firm’s liquidity stresses, and he knew that
the firm violated its own policy that had
been designed to protect customer funds.
Holdings’ Treasurer recommended to
Holdings’ CFO in a recorded call, “We have
to tell Jon that enough is enough. We need
to take the keys away from him.”
In the last week of October 2011, with
virtually no other sources of immediate
cash to turn to, the firm repeatedly and
unlawfully used customer funds for firm
needs, ultimately leaving it nearly $1 billion
short of customer funds. In that last week,
Corzine is alleged to have been aware of
the firm’s true low cash balance, even as he
directed the firm to continue paying large
obligations without inquiring how the firm
could come up with the money to do so.
Corzine is charged for the firm’s violations
as an MF Global “control person” who,
among other things, did not act in good
faith and is also charged with violating his
legal obligations to diligently supervise.
David Meister, the CFTC’s Enforcement
Director, said, “Turning a profit is not
the only job of the person at the top of a
CFTC-regulated firm. Particularly in times
of crisis, the person in control, like the CEO
here, must do what’s necessary to prevent
unlawful uses of customer money, so that
customers’ money is still there if and when
the music stops. The allegations in our
Complaint serve as a stark reminder that
we will enforce the law against responsible
individuals at all levels of a firm to ensure
that customer funds are properly safe-
guarded every minute of every day.”
O’Brien, MF Global’s Assistant
Treasurer, is charged with aiding and abet-
Continued …
ting the firm’s misuse of customer funds.
According to the Complaint, she directed,
approved, and/or caused improper transfers
of hundreds of millions of dollars from cus-
tomer accounts to help meet the firm’s needs
during the final days of October 2011, while
knowing that MF Global did not have suf-
ficient proprietary funds available in those
customer accounts for those transfers. The
Complaint alleges that O’Brien remarked
in a recorded telephone conversation that
it “could be game over” from a regulatory
perspective if funds were not returned to
customer accounts on Friday, October 28,
2011, MF Global’s final business day.
With respect to the company defendants,
in addition to the misuse of customer funds
described above, the Complaint charges
that MF Global unlawfully failed to notify
the CFTC immediately when it knew or
