No, not the headlines about its bankruptcy - the real story.
If you haven't heard it yet, it goes something like this.
MF Global became a primary dealer only eight months ago.
"Primary dealer" is an elite status. It means the firm is one of only 22 government bond dealers that trades directly with the Federal Reserve's New York trading desk.
Only, the Federal Reserve doesn't regulate or oversee MF Global, the Commodities Futures Trading Commission (CFTC) does - or rather is supposed to.
But, even more incongruously, the CFTC isn't the first overseer of MF Global . It ceded that responsibility to the CME Group Inc. (Nasdaq: CME), which owns and operates the largest futures exchanges in the United States. The designated self-regulatory organization for more than 50 futures brokers, CME was supposed to be the cop on the beat.
However, t he not-so-funny thing about the relationship between MF Global and the CME Group is that MF Global recently boasted on its Website that it "was the top broker by volume at CME's metals and energy exchanges in New York and in the top three at its Chicago exchanges."
So, is it any wonder that the CME just last week audited MF Global's segregated customer funds and found them to be in compliance?
These are the same supposedly segregated funds which the CME is now saying may have been tampered with. According to the CME:
"It now appears that [MF Global] made subsequent transfers of customer segregated funds in a manner that may have been designed to avoid detection insofar as MF Global did not disclose or report such transfers to the CFTC or CME until early morning on Monday October 31, 2011."
How much money are we talking about? About $633 million - or 11.6% out of a segregated fund requirement of about $5.4 billion.
Do you see what I'm driving at?
So the real story is, t he Federal Reserve, which doesn't regulate MF Global but regulates all banks in the United States, lets a futures commission merchant with investment bank wannabe desires become an insider in its dealings. Meanwhile, a private for-profit enterprise that runs the self-regulatory apparatus that oversees its own customers steps in for a federal agency that's supposed to be in charge of commodities, futures and derivatives markets.
And that's only the tip of the iceberg.
Let me jump on the Securities and Exchange Commission (SEC) next, because you aren't going to believe this, either.