STOCK MARKET WATCH -- Thursday, 29 March 2012

[Demeter]

70. MF Global’s Counsel Resisted Giving Assurances on Transfers

http://www.bloomberg.com/news/2012-03-26/mf-global-s-ferber-says-jpmorgan-sought-assurance-on-transfers.html

General Counsel Laurie Ferber twice resisted providing assurances to JPMorgan Chase & Co. (JPM) that the broker was complying with rules to segregate customers’ collateral, saying language in a draft provided by the bank was too broad.

Ferber said JPMorgan was “specifically interested in two transfers” that occurred the morning of Oct. 28. The first was a $200 million transfer from a segregated customer funds account at MF Global Inc., the firm’s brokerage, to a “house” account, followed by a second transfer of $175 million from the house account to a London subsidiary’s account at JPMorgan.

“Although I had no reason to believe that any non- compliant transfers from segregated accounts had occurred or would occur, I did not think that any individual officer or employee should be asked to issue such a broad certificate,” Ferber said in testimony prepared for a March 28 House Financial Services subcommittee hearing. Any employee making such an assurance, she said, would have had to personally handle all the transfers or been able to review all the transactions within the available timeframe.