Continental Chicago

now in its one-hundred-and-eightieth year

Edie, Spill the Beans

To my mind, the most interesting person in the world at the moment isn’t one of the US Supreme Court justices.  It’s Edith O’Brien, a near-nobody from Chicago who could blow open the whole MF Global scandal if she chose to.  And who knows?  Perhaps tomorrow, before a congressional subcommittee, she will.  But instead she’s expected to plead the 5th.

Ms. O’Brien is caught in the vise of history, though perhaps she doesn’t see herself that way.  She may see herself as being caught in a different kind of trap, the kind that tends to snag the lesser characters, the fall guys, that kind of thing.  Certainly Ms. O’Brien is less colorful than Jon Corzine.  Compared to this megawatt personality—this well-known character who would sooner die than put on a seatbelt—she’s a bit player, a corporate accountant in the high-flying concern he was so flamboyantly running.

Before MF Global collapsed, Ms. O’Brien had a pretty impeccable professional reputation.  Assistant treasurer in MF Global’s Chicago office, she was regarded as “an expert of sorts on the protection of customer money at futures firms.”  According to Ben Protess and Azam Ahmed, who’ve been covering MF Global’s collapse for the New York Times, she was even tapped to lead seminars on the subject by the CFTC (Commodities Futures Trade Commission), the governmental body charged with regulating the futures industry.

Then came the morning of October 31st, 2011, when traders found their clearing house bankrupt, their accounts frozen, their money missing.  This is the story of MF Global: the overnight disappearance of some $1.6 billion from customers’ accounts, an occurrence that no one in the company is now willing to admit knowing about, or doing.

These so-called shortfalls have been treated gingerly.  The traders, farmers, and others whose money was taken have been treated merely as claimants to a bankruptcy.  They have not traipsed down to police stations to say they have been embezzled from.  Only one pig farmer, invited to share his story with members of the US Senate, had the courage to state the matter bluntly.  “The truth of the matter is commingling money is stealing money,” Mr. Dean Tofteland of Luverne, Minnesota, told the senators, “especially when it disappears.”

Now Ms. O’Brien is afraid to cooperate with authorities.  She is scheduled to appear before a Congressional committee tomorrow.  If she were to take the courageous step of telling the truth, the whole truth, publicly and unequivocally, she would emerge as a heroic figure in what has otherwise been a terribly sordid and cynical story of an enormous corporation misusing other people’s money—taking it without permission and then losing it.

RELATED:
Nocera, “Is MF Global Getting a Free Pass?NYT, 12 March 2012.
Ahmed and Protess, “No Criminal Case Likely In Loss at MF Global,NYT, 16 August 2012.

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2 comments on “Edie, Spill the Beans

  1. Sam Dune
    September 5, 2012

    I followed the collapse of MF Global fairly closely. It dominated the business section of my local paper for a good two weeks. And, yes, I found it confounding that Ms. O’Brien could not and would not remember anything. . . . The big-wigs working for MF Global knew only too well that the Federal govt would have a very hard time pinning them down to the actual crime. . . . Thank you for writing this interesting post—it was the eighth largest bankruptcy every filed in the U.S., I think.

    • Susan Barsy
      September 10, 2012

      Yes, Sam, you’re right: the MF Global bankruptcy was on the scale of Chrysler’s but received much less attention politically, perhaps because it was an embarrassment for Democrats, or because it was more technical or affected a different set of people than did Chrysler’s. The complicated, far-flung nature of our economy is hospitable to crime, but it surprises me that no responsibility has been assigned since this scandal came to light.

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