Reuters reports that in late October, as MF Global Holdings Ltd teetered toward bankruptcy, Jon Corzine phoned his close-knit circle of Wall Street friends for help. His firm, facing demands from customers and other firms for cash, needed to sell billions of dollars in securities to raise the money. As the week progressed, MF Global executives came to believe that JPMorgan Chase & Co., one of MF Global's primary bankers and a middleman moving that cash, was dragging its feet in forwarding the funds.
The delays contributed to a serious cash shortage at MF Global, according to people familiar with the matter. These people say the firm started trading one day in late October with $600 million in cash and spent the whole day selling securities, only to end with just $200 million in cash.
By adhering to procedure and not cutting MF Global any slack, these people say, JPMorgan was able to slow the delivery of funds, worsening MF Global's distress. As a result, they note, hundreds of millions of dollars of MF Global money may be still stuck in accounts at JPMorgan...
Find out more at http://www.reuters.com/article/2012/01/19/us-mfglobal-jpmorgan-idUSTRE80I02520120119
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