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When Stone Is Dust and Only Air Remains

posted by Stephen Lubben

Some thoughts on customer protection at brokerages, following MF Global, over at DealBook.


I like all the comments about how the segregation of the accounts should make prosecution a slam dunk. Not so fast. Might I remind everyone that a significant percentage of the missing assets is good assets that were swapped for crap assets per CFTC Rule 1.25. The swaps themselves were legal, so you have to prove the swapped investments were fraudulent, and prosecutors don't want to mess with that. I wrote about this at my blog: http://businesslawspot.blogspot.com/2011/12/just-because-you-bought-it.html

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