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Probe points to MF Global's misuse of segregated customer funds

Section: Daily Dispatches

Now we know what the "MF" stands for: a nickname for Jon Corzine.

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By Scott Patterson
The Wall Street Journal
Thursday, November 17, 2011

Regulators have unearthed more details about MF Global Holdings Inc.'s activities in the days before its bankruptcy filing that suggest the securities firm shifted hundreds of millions of dollars in customer funds to its own brokerage accounts, according to people familiar with the matter.

MF Global's internal records indicate that the company moved segregated customer funds in transactions as large as hundreds of millions of dollars at a time, these people said. The money was transferred out of the unit that houses the assets of futures-trading customers and went into the accounts of MF Global's brokerage, people familiar with the situation said.

Such moves could violate regulations stipulating that commodities brokers can't mix customer funds with brokerage funds. Brokerage funds often are used to back proprietary-trading positions.

... Dispatch continues below ...


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MF Global officials are still working to piece together what happened in the last days before the Oct. 31 bankruptcy filing. It is common practice among futures brokers to maintain a buffer of firm capital in customer segregated accounts to protect against possible customer losses. However, MF Global officials believe it was acceptable to use that buffer when needed for the company's own purposes, people familiar with the matter said.

Still, it appears increasingly likely to regulators from their investigation so far that MF Global burned through all of its capital buffer during the week before the bankruptcy filing, and then started tapping customer funds, according to people familiar with the matter.

Whether that occurred intentionally or by mistake in the confusion of the securities firm's moves to stave off bankruptcy isn't clear. But the money, estimated at about $600 million, still is missing and might never be recovered.

Commodity Futures Trading Commissioner Scott O'Malia said in a statement this week that it "appears that MF Global failed this fundamental responsibility" to not commingle customer and proprietary funds.

A lawyer for MF Global said the firm and its employees are cooperating with regulatory probes and that "any characterization at this point of what occurred at MF Global is premature and inappropriate."

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Golden Phoenix Signs Definitive Agreement to Acquire and Reopen Santa Rosa Gold Mine in Panama

Company Press Release
Monday, September 19, 2011

SPARKS, Nevada -- Golden Phoenix Minerals Inc. (OTC Bulletin Board: GPXM) has signed a definitive agreement to acquire a 60 percent interest, with an option to buy an additional 20 percent interest, in the Santa Rosa gold mine in Panama, now owned by Silver Global S.A., a Panamanian corporation.

Santa Rosa produced more than 100,000 ounces of gold from 1996 to 1998 before being closed in part to low gold prices, which are now more than five times higher.

Golden Phoenix intends to acquire its initial 60 percent interest in Santa Rosa by acquiring 60 percent of the share capital of a recently created company under the name Golden Phoenix Panama S.A., formed to hold and operate the mine.

Tom Klein, CEO of Golden Phoenix says: "The agreement establishes a solid framework from which we can advance Mina Santa Rosa to production-ready status."

For Golden Phoenix's complete statement, please visit: