Tuesday 12 December 2017

Colm McCarthy: Public entitled to full accountability

US shows a marked contrast with speedy probes into causes of financial collapses, writes Colm McCarthy

A Report issued last Monday in New York has begun the allocation of responsibility for the collapse of the commodities and securities firm MF Global, which has left customers short of $1.6bn (€1.28bn). The 275-page report was issued by the bankruptcy court in Manhattan and is the work of a team headed by lawyer James W Giddens.

The report, available to all and sundry on the internet, is admirably detailed and explains how the company collapsed. The role of individually named officers in the disaster is explored fully.

Giddens has concluded that John Corzine, the CEO of MF Global, as well as other named senior officers, bear primary responsibility for the collapse. Briefly, the firm had been speculating on European government securities and got on the wrong side of a big market blow-out. They had placed customer funds, as well as the firm's own capital, at risk, which is in breach of regulatory rules.

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