MF Global: The Untold Story of the Biggest Wall Street Collapse Since Lehman
Continued from previous page
Hughes Hubbard and Reed is the same law firm handling the bankruptcy of Lehman Brothers. After more than three years, customers have yet to be made whole. There are over 7600 law firms in New York City according to the legal web site, Martindale.com. Why SIPC has selected the same firm for two of the largest Wall Street collapses in history is noteworthy.
Hughes Hubbard and Reed hired the same public relations firm to handle both the Lehman and MF Global matters, APCO Worldwide. APCO was originally formed as a subsidiary of Arnold & Porter, the law firm aligned with spin for Big Tobacco in the 90s.
According to Wendell Potter, an insurance company public relations insider and whistleblower, writing in his book Deadly Spin, "One of the deceptive practices of which APCO has a long history is setting up and running front groups for its clients. In 1993, Philip Morris hired APCO to organize a front group called the Advancement of Sound Science Coalition in response to the U.S. Environmental Protection Agency's ruling that secondhand tobacco smoke was a carcinogen. Philip Morris also hired APCO to manage what it called a 'massive national effort aimed at altering the American judicial system to be more hostile toward product liability suits' and to build a coalition to advocate for tort reform. According to the Center for Media and Democracy, the tobacco industry paid APCO almost a million dollars in 1995 to implement behind-the-scenes tort reform efforts and specifically to create chapters of 'grassroots' citizens' groups called Citizens Against Lawsuit Abuse."
Amy Goodman, host of Democracy Now!, interviewed Wendell Potter on November 17, 2010. Potter revealed more about APCO and front groups: “…there was a front group that was set up called Health Care America, and the sole purpose for it to be set up was to attack Michael Moore [who was about to release his documentary on health care, Sicko] and to attack the notion of a single-payer system in this country…the media contact for it was a guy named Bill Pierce, who I had known and worked with in the past...He was listed as a media contact, and if you called his number, you would have reached him at his desk at APCO Worldwide… There was an article that the New York Times wrote as a kind of a review of Sicko, not really a review but just a story about the movie actually premiering in the U.S. in June of 2007. And theNew York Times story quoted the Health Care America spokesman as saying that this represented a move toward socialism. And there was not an — apparently not an attempt on the part of the reporter, or any reporter that I saw, to disclose the fact that this was funded largely by the insurance industry.”
In the same month that Corzine was hired by MF Global, March 2010, there were confirmed news reports that APCO Worldwide had been hired by the Financial Services Roundtable, a Wall Street trade group, to promote the image of Wall Street as trustworthy. An APCO spokeswoman says they no longer represent the account.
While customers on this side of the pond are left in the dark as to how the sanctity of segregated accounts was bulldozed at MF Global, a recent filing by KPMG, the administrator of the bankruptcy proceeding in the UK of a subsidiary, MF Global UK Limited, provides more fodder for Congressional hearings. The subsidiary was running an operation in the UK called spread betting. That practice was known as bucket shops in the US in the 1920s and is outlawed here. It involves making bets on the price direction of financial stocks, commodities, indexes, and other financial derivatives without the trades ever being placed on an exchange. No security asset is owned by the customer.