NY Fed Granted MF Global Primary Dealer Status Despite Concerns and Lack of Due Diligence

So how persistent was Jon Corleone in that private meeting?

Confidence begins with honesty, a sense of fairness, and respect for justice. Not just the letter of the law, but the spirit of the law as well.

"If we desire respect for the law, we must first make the law respectable...Our government teaches the whole people by its example. If the government becomes the lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy."

Louis D. Brandeis

If the patience and trust of the American people was a checkbook, you could mark it 'Account Overdrawn.' This is something that the monied interests and their Beltway bandits just do not yet comprehend. Or perhaps they do, but do not have enough respect for the people to care.

Wouldn't it be a hoot if someone outré was elected President and went Andy Jackson on their pampered posteriors? I wonder if Ron Paul has it in him to be greater than himself, the leader of the whole nation and not a narrow slice of ideologues. All the rest look like conmen, cranks, and stooges.

Reuters
A persistent MF Global won NY Fed dealer status
By Sarah N. Lynch
Wed Dec 14, 2011 8:36pm EST

(Reuters) - Now bankrupt MF Global lobbied the New York Federal Reserve heavily to become a primary dealer, eventually succeeding after a delay sparked by a regulator flagging internal control problems.

Thomas Baxter, the New York Fed's general counsel, revealed the regulator's behind-the-scenes dealings with the futures brokerage, including a personal meeting with former MF Global chief Jon Corzine, in testimony prepared for a congressional hearing on Thursday.

The Fed delayed approving MF Global's application for primary dealer status after the Commodity Futures Trading Commission warned the Fed in April 2009 it had uncovered major compliance issues.

Primary dealers are the financial firms authorized to deal directly with the government to help carry out monetary policy and distribute U.S. debt.

MF Global was eventually given primary dealer status in February of this year. Fed Chairman Ben Bernanke has previously said it did not constitute a "seal of approval."

Baxter is expected to face questions at Thursday's hearing by the House Financial Services oversight subcommittee about whether the Fed overlooked problems with the firm.

"We also have concerns with the apparent lack of due diligence conducted by the Federal Reserve Bank of New York in bestowing its primary dealer designation on MF Global - even as the firm consistently lost money," panel chairman Randy Neugebauer said in a prepared opening statement....