The answer right now is that no one has a f***ing clue. We’re going into our 6th month of that assessment.
… An accounting error, according to Phupinder Gill, president of futures-exchange operator CME Group, would normally be "solved in 10 minutes or less." During a recent visit to the Journal, Mr. Gill and CME Executive Chairman Terrence Duffy were careful not to accuse anyone of a crime, but they made clear that many futures market participants believe that's exactly what happened at MF Global.
Mr. Duffy and his colleagues are not disinterested observers. Their futures exchange has suffered reputational damage from the failure of one of its prominent members to provide the most basic customer protection. What is not in dispute is that MF Global broke the rules of the exchange and of the U.S. Commodity Futures Trading Commission (CFTC) when MF failed to maintain client funds in segregated accounts. …
Fortunately for investors, it almost never has. "Not for one second" were customer accounts unprotected when the investment bank Drexel Burnham failed in 1990, says Mr. Gill. When Lehman Brothers went bust in 2008, customer funds were also segregated. Mr. Duffy says that one needs to go back to 1936 to find a violation of segregated accounts similar to the MF Global debacle. [emphasis added]
Ya’ know … as a parent, there comes a point where a kid has stalled to long on producing a viable story for it to be accepted as truth.