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In the latest in the on-going scandal over the now-bankrupt futures trading company MF Global, new testimony prepared at a Congressional hearing today shows that the Federal Reserve gave MF Global so-called “primary dealer status” in February of this year, even after it was discovered that there were serious questions about compliance with regulations. The company which was headed by former Senator and former Goldman Sachs CEO John Corzine, lobbied heavily for the status which meant MF Global could “deal directly with the government to help carry out monetary policy and distribute U.S. debt” (Reuters). When questioned at a Congressional Hearing earlier in the week about missing billions of dollars of customer money, Corzine said he simply didn’t know what had happened to the money. Rolling Stone writer Matt Taibbi described what happened this way: “Corzine essentially reached into the company cash register to pay off his gambling debts. He didn’t have enough money of his own to fight off the wolves, so he took the money he had access to, in a desperate, insane hope that his bets would eventually turn around and he could replace the missing cash later on.” The MF Global scandal is only the latest in a series of instances of corporate fraud that have now become part and parcel of the American capitalist way, with any fines or disciplinary action upon discovering the fraud becoming simply a cost of doing business. President Obama, when questioned on CBS’s 60 minutes about corporate fraud, said “Some of the most damaging behavior on Wall Street — in some cases some of the least ethical behavior on Wall Street — wasn’t illegal.” Meanwhile a Syracuse University study in November revealed the shocking fact that criminal prosecutions against financial institutions for fraud per year, had fallen dramatically under President Obama. Even President George W Bush’s Administration pursued more than twice as many prosecutions for financial fraud per year than Obama. With the Occupy movement having taken a hold of the national popular imagination, there is a renewed public hunger for economic justice.

GUEST: William Black, Associate Professor of Economics and Law at the University of Missouri, Kansas City and the author of “The Best Way to Rob a Bank Is to Own One.”

Visit http://neweconomicperspectives.blogspot.com for more information.

Here is a link to the article Prof. Black referred to during the interview: http://online.wsj.com/article/SB10001424052970204336104577094772749499652.html

From the WSJ article: “Under the proposal, banks would be released from legal claims tied to servicing delinquent mortgages as well as certain mortgage-origination practices, but government officials still would be able to pursue claims related to the packaging of mortgages into securities.”