MF Global Is Said to Have Used Customer Cash Improperly - NYTimes.com
MF Global, like other brokers, can use customer cash if it puts up sufficient collateral. But the firm did not provide enough backing in late October, essentially taking free loans, said the people briefed on the investigation, who spoke on the condition of anonymity because the inquiry was continuing.
As customers rushed to withdraw money while the firm was teetering on the brink of bankruptcy, that questionable borrowing worsened a liquidity crisis at the firm.
That seems to be why $600 million is missing. You can call this a free loan if you like, but it looks a lot more like stealing to me. If I take a bag of apples out the door of Target and get caught, nobody will buy it if I say, "I intended to replace them with an equivalent number of apples at a later date." People say there was a time when the term "business ethics" wasn't a laughable oxymoron.