MF Global Executive Saw Early Warning Sign on Customer Money [DealBook]
An internal MF Global document suggested that the firm was putting customer money at risk days before its bankruptcy filing, an executive said in prepared testimony that was released on Tuesday for a Congressional hearing on Wednesday. The document showed “a substantial deficit” in the amount of firm money used to protect customer accounts, according to the testimony by Christine Serwinski, the firm’s North American chief financial officer. Futures firms typically keep a cushion of cash in customer accounts as a buffer to cover losses in case of volatile market swings. The deficit, revealed in a report on Thursday, Oct. 27, did not in and of itself violate federal laws, she said. But Ms. Serwinski, who was on vacation during MF Global’s final week, had stated “clearly and repeatedly” that the firm should keep a surplus of cash to protect customer money.
This is a good refresher for anyone that hasn't flown in the last 10 years or so.
This is stuff you didn't learn from watch A&E specials on the subject.
Maybe!