Three Years Ago Obama Nominated Gary Gensler To Chair The CFTC, Who Has Stepped Aside From The Search For $1.2 Billion Due To His Too-Close Ties To Obama’s “Wall Street Guy”

FLASHBACK: OBAMA NOMINATES GARY GENSLER TO CHAIR THE CFTC

December 18, 2008: Obama Announces Gary Gensler As Chairman Of The Commodity Futures Trading Commission. OBAMA:“To chair the Commodity Futures Trading Commission, I’ve chosen Gary Gensler, who brings a wealth of expertise from both the public and private sectors to this position.” (President-Elect Barack Obama, SEC, CFTC, and Federal Reserve Board Announcements, Chicago, IL, 12/18/08)

Obama Praised Gensler’s Time At Goldman Sachs And Said He’d Bring “Sound Judgment And Strict Oversight To Our Markets.” OBAMA: “In addition to serving as Under Secretary of Treasury during the Clinton Administration and a Senior Advisor to the Senate Banking Committee, Gary also gained a deep knowledge of our financial institutions during his decade as a partner at Goldman Sachs. As the new chairman of a commission charged with regulating some of the unsound practices and excessive leverage that helped cause this crisis, I know he will restore sound judgment and strict oversight to our markets.” (President-Elect Barack Obama, SEC, CFTC, and Federal Reserve Board Announcements, Chicago, IL, 12/18/08)

• Obama Said Gensler Would Protect Consumers “From Fraud And Manipulation By An Irresponsible Few.” OBAMA: “These individuals will help put in place new, common-sense rules of the road that will protect investors, consumers, and our entire economy from fraud and manipulation by an irresponsible few.” (President-Elect Barack Obama, SEC, CFTC, and Federal Reserve Board Announcements, Chicago, IL, 12/18/08)

GENSLER’S DONE A GREAT JOB…

The CFTC Failed To Reign In Jon Corzine’s MF Global

On December 5, 2011 The CFTC Approved The “MF Global Rule” Which Would Bar Wall Street “From Using Client Funds To Buy Foreign Sovereign Debt” – After MF Global Had Lost Its Customers’ Money.  “Federal regulators approved tougher constraints on Wall Street risk-taking on Monday, adopting the ‘MF Global rule,’ named after the collapsed brokerage firm that is believed to have improperly used hundreds of millions of dollars of customer money. The new rule will limit how the brokerage industry can invest customer money, largely barring firms from using client funds to buy foreign sovereign debt. It also prevents a complex transaction that allowed MF Global, in essence, to borrow money from its own customers.” (Ben Protess, “Regulator Approves ‘MF Global Rule,’” The New York Times’ “Dealbook,” 12/5/11)

• “MF Global Violated That Principle In Its Final Chaotic Days, Tapping Its Segregated Client Accounts To Meet Its Own Financial Obligations, People Briefed On The Matter Have Said.” (Ben Protess, “Regulator Approves ‘MF Global Rule,’” The New York Times’ “Dealbook,” 12/5/11)

The CFTC Proposed The Rule In October 2010, But “Met A Powerful Roadblock In Mr. Corzine.” “Mr. Gensler’s agency initially proposed the crackdown in October 2010, and neared a vote on the plan this summer. But at the time, the agency met a powerful roadblock in Mr. Corzine, former Democratic governor of New Jersey.” (Ben Protess, “Regulator Approves ‘MF Global Rule,’” The New York Times’ “Dealbook,” 12/5/11)

Corzine Launched An “Aggressive Lobbying Campaign” And Delayed The Rule From Taking Effect. “Mr. Corzine’s efforts culminated on July 20, as MF Global executives were on four different calls with the agency’s staff. Mr. Corzine personally participated in two of those calls. Ultimately, the aggressive lobbying campaign helped delay the proposal.” (Ben Protess, “Regulator Approves ‘MF Global Rule,’” The New York Times’ “Dealbook,” 12/5/11)

Corzine Argued That The Rule Would Be Aimed At Fixing “Something That Is Not Broken.”  “The rules were unnecessary, Mr. Corzine said, because federal laws already prevented brokerage firms from mixing client money with company funds. In a letter, MF Global insisted to regulators that they were trying to ‘fix something that is not broken.’” (Ben Protess, “Regulator Approves ‘MF Global Rule,’” The New York Times’ “Dealbook,” 12/5/11)

Possibly Due To The Cozy Relationship Corzine Had With Gensler

“MF Global Also Shows How This New Era Of Regulatory Power Puts A Premium On Political Connections.” (Editorial, “Mr. Corzine And His Regulators,” The Wall Street Journal, 12/1/11)

Gary Gensler Worked For Jon Corzine When They Worked At Goldman Sachs. “Leading the government’s effort to curtail these arcane practices was Gary Gensler, the chairman of C.F.T.C., who had worked for Mr. Corzine at Goldman Sachs. Mr. Gensler pushed for the proposed change in October 2010, and planned to bring it to a vote this summer.” (Azam Ahmed And Ben Protess, “As Regulators Pressed Changes, Corzine Pushed Back, And Won,” The New York Times’ “Dealbook,” 11/3/11)

• “Speaking At A Princeton University Conference Last Year On The Day Before Corzine’s Wedding, Gensler Described Working With Corzine As A ‘Privilege.’” (Daniel Wagner, “MF Global’s Regulator Has Ties To Company’s Leader,” The Associated Press, 11/3/11)

 “Both Men Are Active Democrats, And Served On Financial Panels Together Recently.” (Azam Ahmed And Ben Protess, “As Regulators Pressed Changes, Corzine Pushed Back, And Won,” The New York Times’ “Dealbook,” 11/3/11)

• “When Corzine Ran For New Jersey Governor, Gary Gensler Gave $10,000 To The State Democratic Party, Which Was Trying To Get Corzine Elected.” (Daniel Wagner, “MF Global’s Regulator Has Ties To Company’s Leader,” The Associated Press, 11/3/11)

Regulators Tried To Rein In MF Global, But Corzine Opposed Their Efforts. “Months before MF Global teetered on the brink, federal regulators were seeking to rein in the types of risky trades that contributed to the firm’s collapse. But they faced opposition from an influential opponent: Jon S. Corzine, the head of the then little-known brokerage firm.” (Azam Ahmed And Ben Protess, “As Regulators Pressed Changes, Corzine Pushed Back, And Won,” The New York Times’ “Dealbook,” 11/3/11)

Gensler Has Recused Himself From Investigating Corzine’s Firm. “A regulator says he withdrew from an investigation of Jon Corzine’s collapsed securities firm to avoid being a ‘distraction.’ Gary Gensler, chairman of the Commodity Futures Trading Commission, said Monday that the CFTC has ‘excellent career staff’ to handle such cases.” (Eileen AJj Connelly And Daniel Wagner, “Geensler Explains Recusal From Mf Global Probe,” The Associated Press, 11/7/11)

• Gensler’s “Long And Deep Ties To Corzine” Had Experts Believing He Has A Conflict Of Interest. “But Gensler’s long and deep ties to Corzine pose an apparent conflict of interest that could taint the probe’s findings, experts say. Some say he should remove himself from the case.” (Daniel Wagner, “MF Global’s Regulator Has Ties To Company’s Leader,” The Associated Press, 11/3/11)

REGULATORS ARE STILL LOOKING FOR $1.2 BILLION IN CUSTOMER MONEY

“It’s The $1.2 Billion Question: What Happened To The Customer Money At MF Global?” (James O’Toole, “The MF Global Money Chase,” CNN Money, 12/6/11)

“Former New Jersey Governor Jon Corzine’s Former Brokerage Firm Was Engaged In Activity That Was ‘Either Nefarious Or Illegal,’ Said A U.S. Futures Regulator On Tuesday.” (Tim Mak, “Regulator: Corzine Firm ‘Nefarious,’” Politico, 11/15/11)

• Bart Chilton, CFTC Commissioner: “The money should be there, it’s not. That money should be sacrosanct. It’s really troubling.” (Tim Mak, “Regulator: Corzine Firm ‘Nefarious,’” Politico, 11/15/11)

“The Firm’s Primary Regulator At The Exchange Level, CME Group Inc., Has Suggested Mr. Corzine Knew About Certain Transfers Of Funds That May Have Been Improper.” (Aaron Lucchetti And Scott Patterson, “Corzine Knew Of Fund Transfer,” The Wall Street Journal, 12/16/11)

Corzine Said He Knew About A Transfer Of Funds Overseas. “Former MF Global Holdings Ltd. Chief Executive Jon S. Corzine testified Thursday that he knew about an overseas transfer of funds that has come into focus in recent days as regulators and Congress seek to find out what became of an estimated $1.2 billion in missing customer cash.” (Aaron Lucchetti And Scott Patterson, “Corzine Knew Of Fund Transfer,” The Wall Street Journal, 12/16/11)

• Corzine Testified That The Transfer Was Approved By The Back Office And Took Place On The Last Business Day Before The Bankruptcy. “Mr. Corzine testified, however, that he received assurances that the transfer of millions of dollars to a J.P. Morgan Chase & Co. account in London on Oct. 28, the last business day before MF Global filed for bankruptcy, was approved by at least one official in MF’s back office.” (Aaron Lucchetti And Scott Patterson, “Corzine Knew Of Fund Transfer,” The Wall Street Journal, 12/16/11)