MF Global Invesitgation Focuses on Treasurer, Soros Speaks on Europe: Wall Street Roundup

Probing MF Global: Two former back-office employees at MF Global, the broker-dealer led by Jon Corzine until its collapse last year, warned superiors that the firm was using clients’ funds to cover its own obligations. The misuse continued anyway. Federal investigators are focusing on Edith O’Brien, a former treasurer at MF Global; Ms. O’Brien has asked for immunity from prosecution. That’s according to The New York Times. The Wall Street Journal reports that a mid-level accountant alerted Ms. O’Brien to discrepancies in customer accounts, but a preoccupied Ms. O’Brien delegated the issue to an underling.

Whither Europe: European governments have about three months to save the monetary union, George Soros said at the Festival of Economics: “I expect that the Greek public will be sufficiently frightened by the prospect of expulsion from the European Union that it will give a narrow majority of seats to a coalition that is ready to abide by the current agreement. But no government can meet the conditions so that the Greek crisis is liable to come to a climax in the fall. By that time the German economy will also be weakening so that Chancellor Merkel will find it even more difficult than today to persuade the German public to accept any additional European responsibilities. That is what creates a three months’ window.”

Investors wonder whether central bankers can come to the rescue again, as Europe signals another tumultuous summer for markets.

Self-defense: Securities and Exchange Commission Enforcement Director Robert Khuzami defended his agency’s low tally of prosecutions against top investment banking officials for charges arising out of the financial crisis. For one thing, said Khuzami, decisions on mortgage-backed securities weren’t made at banks’ highest levels. For another: “We are responsible for regulating 35,000 entities, and yet we are about the size of the D.C. police force.”

The SEC investigator suspended last month after he confided in co-workers his desire to carry a handgun had previously applied for a permit to carry a concealed weapon, but was denied.

One insider trader hit the speaking circuit, hoping to build up some goodwill ahead of his sentencing today.

What’s in a hedge? Rule makers contemplate the Volcker rule and JP Morgan’s recent $2.3 billion “hedging” loss.

Fee fie: Bankruptcy lawyers are under pressure to justify fees that often exceed $1,000 per hour. The lawyers will have their chance to defend themselves today, at a public meeting with the Justice Department’s Trustee Program.

Golden oldies: AIG CEO Robert Benmosche looks to the European debt crisis and sees retirement ages moving as high as 80. MF Global Invesitgation Focuses on Treasurer, Soros Speaks on Europe: Wall Street Roundup