The Stench From MF Global Gets Worse - Should James Giddens (Bankruptcy Trustee) Recuse Himself?

A few days ago I opined that the stench coming from MF Global had taken on the distinct and nauseous odor of dog shit.  Well now the smell has elevated to the level of the kennel area at the Westminster Dog Show.  It turns out that the law firm of James Giddens - who is the very highly paid bankruptcy trustee - just so happens to do legal work for both Price Waterhouse, MF Globals' audit firm, and JP Morgan, MF Global's largest creditor.  Quite frankly, I find it extremely hard to believe that the bankruptcy court would appoint and allow Gidden to be the bankruptcy trustee in this case, as the conflict of interest has the smell of dog shit all over it.

But it runs even deeper.  I find it very interesting that no one has mentioned Refco or Goldman Sachs in this whole ordeal.  After all, MF Global purchased the assets of Refco after it tanked in colossal fashion.  However, there were many questions which were conveniently swept under the rug and buried.  For instance, Refco filed for bankruptcy literally two months after Goldman Sachs took it public.  Typically, when a large company like Refco is taken public, the underwriter and audit firm involved, Grant Thornton, perform very detailed and thorough legal and accounting due diligence.  The fact that Refco filed bankruptcy literally 60 days after it went public raises all kinds of questions, all of which were neatly and conveniently dismissed.  If memory serves me correctly, Goldman threw out about $300 million in "nuisance" settlement money, thereby somehow avoiding billions in liability actions.  It also made a lot more money off of Refco and it's IPO than the$300 million in "hush" money that it coughed up.  Goldman Sachs' audit firm:   Price Waterhouse, the client of the MF Global bankruptcy trustee James Gidden.

Bloomberg writer, Jonathan Weil raises some interesting questions about the credibility of Price Waterhouse and its competence as an auditor of MF Global and ultimately Goldman Sachs.  Kudos to the commenter who provided the link, which you can read HERE

I don't know about anyone else, but I find it quite fascinating and intriguing that ultimately there is a direct connection from MF Global to Goldman Sachs that goes beyond the Jon Corzine connection.  And there is a direct connection to MF Global, Corzine and the ability of the Government to cover up a lot of this mess via Gary Gensler, Corzine's butt-buddy at Goldman Sachs and the Chairman of the CFTC, the regulatory body of the U.S. Government that was in charge of monitoring and regulating MF Global.

Quite frankly, among James Gidden and his law firm, Hughs Hubbard & Reed, Goldman Sachs, JP Morgan, the CFTC, Price Waterhouse and the ashes of Refco, there is far too much "coziness" and conflict for me to believe that there is not one massive cover-up going on here.  At the very least the Obama Administration should step in and force Gidden to step aside as bankruptcy trustee.  In addition, Attorney General Eric Holder should open up a wide-ranging inquiry into this whole dog shit show, including appointing an independent audit firm responsible for conducting a very thorough forensic audit of every party mentioned above.  Gary Gensler should also be removed at Chairman of the CFTC.  This is the very least that the President who got elected on the promise of cleaning up DC and creating a more level playing field for all should do.

Don't hold your breath on that, but make sure you keep your nose covered, because the smell of dog shit emanating from Wall Street and DC has become unbearable.

This thing stinks worse than a bunch of rotting dead bodies covered in rat shit and I find it quite appalling that the Obama Administration has issued no meaningful statements nor is it taking any meaningful actions to enforce the laws and investigate this matter. It leads me to conclude that the Obama Administration is being complicit in the cover-up.