RED ALERT: It's Open Season on All Customer Funds
Posted by Ann Barnhardt - August 10, AD 2012 3:33 PM MST
The NFA is collusion with the Banksters, government and judiciary have achieved their goal. The entire concept of "customer segregated funds" is officially, completely, legally dead.
Guys, it is OVER. I know that many of you are still cowering in normalcy bias, unable to deal with reality, unable to face the world as it is, but you have GOT to snap out of it. The marketplace is DESTROYED. You CANNOT be in these markets. All legal protections are now officially gone.
Do you remember how I told you about the Ponzi scheme that imploded in 2007 called "Sentinel Management Group" that stole over $500 million in customer funds? The NFA was the auditing regulator of Sentinel, and the NFA admitted after the Sentinel Ponzi imploded that they signed off on their audits even though the NFA claimed not fully understanding Sentinel's books or accounting methods. In other words, the NFA didn't really audit Sentinel at all - they just PRETENDED to audit them, drew up some forms, had some robosigners sign off, and then just hoped that when the shit hit the fan, everyone in the industry would be so terrified of the NFA that no one would hold the NFA accountable for their criminal malfeasance - or even talk about it.
Sentinel took customer segregated money and fraudulently used it as the collateral on a loan from Bank of New York Mellon for $312 million to fund their own in-house proprietary trading operations. When the Sentinel Ponzi collapsed, BNYM sued to go to the front of the line of creditors - ahead of the customers of Sentinel whose money was fraudulently used as collateral, which has now been "linguistically sanitized" into the word "hypothecated".
The federal appeals court ruled yesterday that not only does BNYM stay at the front of the line, but that using customer segregated funds as collateral is NOT a crime, and that co-mingling customer segregated funds with proprietary funds is NOT fraud.
Here is the Reuters piece.
Read this quote from the ruling, which is, in essence, the entire financial market paradigm being guillotined:
That Sentinel failed to keep client funds properly segregated is not, on its own, sufficient to rule as a matter of law that Sentinel acted ‘with actual intent to hinder, delay, or defraud' its customers.
U.S. Circuit Judge John D. Tinder
What this means is that even if Jon Corzine is somehow dragged into court by private citizens, because you know damn good and well that the Justice Department will never, ever touch him, Corzine now has a legal precedent, likely from a bribed or otherwise coerced Federal Appeals Court, explicitly stating that an FCM can use customer deposits to pay its debts, and that the customers themselves are subjugated and have basically no legal right to their own monies, no matter what the law says, or what legal assurances, claims or guarantees are made to that customer about their funds held with an FCM or any other brokerage or depository institution. The "secured" party at the front of the line will always be the mega-bank who made the fraudulent loan using the stolen customer funds as collateral.
In other words, all customer funds in the United States are now the legal property of JP Morgan, Goldman Sachs, BNYM, or whichever megabank is the counterparty on the loans the FCM or depository institution takes out in order to fund its mega-levered proprietary in-house trading desks.