The Wall Street Journal notes that there were no effective capital controls or accounting standards at MF Global:

As MF Global Holdings Ltd. teetered last October, an accountant in its Chicago office got an urgent question from regulators: How much cash did the firm have left?

It is supposed to be an easy question for brokerage firms to answer, even in the middle of a crisis. U.S. rules set tight controls on the accounting, oversight and movement of money that belongs to customers or firms themselves.

This will require a significant effort,” the MF Global accountant, Matthew Hughey, wrote in an email to seven colleagues at 4:24 a.m. on Oct. 27, 2011. A copy of the email was reviewed by The Wall Street Journal.

The reason Mr. Hughey couldn’t answer the question for regulators: Employees at MF Global couldn’t keep track of exactly how much money it had at any given moment, even before the company began to wobble, according to Mr. Hughey’s email. Officials had been trying to fix the problem for months.

As regulators and lawmakers plow ahead with investigations that began when MF Global tumbled into bankruptcy a year ago this week, yawning gaps in the New York company’s procedures for moving and keeping track of money are getting new attention.

A private lawsuit expected to be updated early next month is expected to highlight such issues and how they are tied to the more than $1 billion that went missing from customer accounts as MF Global failed last October, according to people involved in the suit.

A House financial services committee report, which will be released in the next few weeks, is expected to scrutinize how regulators handled MF Global. It is unclear how much focus will be given to the deficiencies in internal computer systems and procedures at the firm.

………

There are no signs that prosecutors are planning to bring criminal charges related to the firm’s demise.

Jon S. Corzine and Henri J. Steenkamp, MF Global’s chief executive and finance chief, respectively, have told lawmakers that they believed internal controls at the company were sound when they signed securities filings in 2011. Their signatures were required under the Sarbanes-Oxley corporate-governance law.

Mr. Corzine, a former Goldman Sachs Group Inc. chairman, strongly backed the 2002 law while he was a Democratic U.S. senator from New Jersey. He has repeatedly denied any wrongdoing related to MF Global. A spokesman for Mr. Corzine declined to comment Sunday. Mr. Steenkamp’s lawyer and Mr. Hughey couldn’t be reached for comment. A lawyer for Mr. Hughey declined to comment.

(emphasis mine)

Under Sarbanes Oxley, Jon Corzine personally certified that MF Global had established and was maintainied “internal controls” and “designed such internal controls to ensure that material information relating to the company and its consolidated subsidiaries is made known to such officers by others within those entities, particularly during the period in which the periodic reports are being prepared.” (From the Wiki)

The didn’t. It wasn’t even close, and Jon Corzine was in violation of the law, and should be subject to criminal penalties.

What have we heard from the Department of Justice? **crickets**

It is a disgrace.