- Why did Gary Gensler recuse himself?
- How were CFTC rules worked around?
- What is the basis for leaving Corzine free?
"Gensler delayed the rule in July after being lobbied by broker-dealers and their executives including former New Jersey Governor Jon S. Corzine, then MF Global’s chairman and chief executive officer.
Corzine personally lobbied against the CFTC’s rule on client funds. “It will be costly,” he said in a June speech at a New York conference. Gensler recused himself from the probe because of his ties to Corzine.
Gensler worked at Goldman Sachs Group Inc. when Corzine was co-chairman, and was a Senate aide while the Democrat served as a U.S. senator from New Jersey".That's a beefy bit right there. The rule which was relaxed through lobbying by the industry that the rule regulated, was going to be amended until a criminal who had old connections with the individual regulating him managed to leverage his power and convince the regulator to hold off. That's enough to cover questions 1 and 2 but what about 3? Why was Corzine able to remain free even in the midst of all this information being known? A sharper question to contemplate is whether Corzine himself, as a person, is to blame or the system that is in place which enabled these actions through the perception of morality derived from behaving legally.
- Government cover-up
- Legitimate confusion over the complexity of the various laws/jurisdictions involved
Corzine was able to buy relationships by maintaining the status quo. So long as the money is coming in, the laws can be structured to keep justice away. Over Corzine's entire career he was able to build an image, somewhat like Madoff, that people never questioned. Gensler seems an easy enough push over since he not only worked under Cozine at Goldman Sach's but also shared the same political party that Jon so liberally lubricated.
Corzine, who shares his time between the New York apartment and his home in Hoboken, is no stranger to big money in politics. He had used his position as chairman of Wall Street powerhouse Goldman Sachs to become one of the nation's biggest "soft money" contributors to Washington Democrats when his name first began circulating in 1999 as a possible Senate candidate.So who from the democratic has decided to investigate their party's liberal donor's racket? Georgia Congressman David Scott, who has never received any direct money from Corzine or MF Global according to Open Secrets data beginning in 1989, is the lone democrat pressuring Gensler. This shifts the focus as the emphasis now going forward will be on the loopholes in the law and not necessarily Corzine’s accountability. Since this is the case, no one will be held accountable. The laws allowed MF Global's actions by not restricting them, there is no recourse for the clients. The government will not penalize itself, they will not jail themselves, so what's the recourse? Eat the dirt on this situation and pass a law that will hopefully prevent this in the future.
As he began spending what ultimately became more than $60 million of his own money to win a Senate seat in 2000, Corzine also contributed liberally to committees and candidates in New Jersey, especially county committees that are allowed to accept up to $37,000 per year.
He continued being a top contributor to the party while he served in the Senate and then at the State House. The New Jersey Election Law Enforcement Commission database, which does not include all political spending in the state, lists 329 Corzine contributions totaling $5.7 million to county and state committees and legislative candidates.
Most American civilians will be shocked and amazed someone could do such a thing. Considering where Corzine came from, it's not a surprise in the least. We're all well aware of Goldman lying to Congress and being let loose while Roger Clemens was indicted for using steroids as a professional baseball player. The democrats will give Corzine the benefit of the doubt and they'll focus on passing laws as an election talking point, this is nothing new to us. The roots that this group has together are too deep. Should the broad retail investor, which feeds this Ponzi scheme on the base level, loose faith in their third-party clearing house (broker/dealers, discount retail broker, any structured product clearinghouse), the system will loose its new suckers. Many farmers, merchants, and producers are worried about how to hedge the risks in their business cycles. This entire mess is a prime example of Normalcy Bias. This time though it's because of the survival instinct. No one wants to give up what they are good at doing and what they enjoy doing. A farmer will find a new clearing house and hope that things will change. The veterans in this industry will leave in frustration because they know too much to go on but they will be replaced by a new group will at least just dumb enough to not understand the depths of the problem MF Global just exposed in global capital markets.
Now that the political connection is made, SIPC's involvement is clear. The Chairman, Orlan M. Johnson, is a democrat and decided that protecting MF Global creditors was more important than enabling the real clients, 98% of them being commodities and derivative traders (not covered under the SIPA Liquidation), to recover their assets.