Frontline - Six Billion Dollar Bet (2012)PBS
"Six Billion Dollar Bet" is a short extension of Frontline's 4 part program titled "Money, Power & Wall Street" which I uploaded earlier. This program covers the fraud committed by Jon Corzine and the collapse of MF Global, which included a still unaccounted for loss of customer funds amounting to over $1 billion. (well, sort of...at least).
Corzine was a former CEO of Goldman Sachs and Senator of New Jersey- both jobs he was forced from. So, in an attempt to re-establish his name, he took the helm at MF Global where he would see it move into the field of investment banking and take alot more risk. The risk he chose to take, unfortunately for everyone at MF Global, was to invest in Sovereign bonds in the failing Eurozone markets (Greece, Spain etc). He thought this was going to be a buy low sell high scheme and was betting on the failing economies to be bailed out.
But he was wrong and didn't realize it. He kept betting on these sovereign funds to the chagrin of his risk assessment experts. MF Global was just too small to make the amount of bets he was taking. To continue on his course, Corzine took actions which some have called "amounting to fraud". He used normally segregated customer funds to invest on his radical bets, using a mechanism called "Internal Repo" (moving money from one part of the firm to cover activities being undertaken by another part of the firm). "Internal Repo" was quasi-legal and the FTCT regulatory body was considering banning the activity...well, that was until they were lobbied by Corzine against it.
When Corzine realized the proverbial shit-was-hitting-the-fan, he used even more of customers money (though he denies this) to cover the "margin call" from their parent bank- JP Morgan (where the missing customer funds currently reside today, though they are technically still considered "missing"). In a last ditch effort to gain back capital he tried to sell off the company, but it inevitably collapsed- short over a billion and a half dollars of customer funds which legally should have been segregated from the high risk investments being undertaken by the investment half of the bank.
Corzine denies any knowledge of customer funds being used in his risky bets, but it is clear he is lying. He has been called before a congretional committee whom are still investigating the case. Which will continue to develop.
Not my rip, originally uploaded by rich06048, Thanks!
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Jul 15, 2012, 04:04:32
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