CNBC’s Gary Kaminsky had some insight on the fallout of MF Global’s bankruptcy this morning.
Kaminsky said the MF Global story is much bigger than the clients’ missing funds. (Kaminsky spoke right before news broke that the client fund shortfall might be doubled at $1.2 billion.)
The biggest impact of MF Global is the long-term effect on investor confidence, which no one should underestimate, Kaminsky said. “When you cannot get access to your money, when you’re frozen from getting to your account—if you have t-bills or some form of cash equivalent—that is the most significant and dangerous thing for anybody that knows how it is working with clients, whether institutional or retail,” he said.
In addition, the fact that no one has been arrested or charged is also a serious issue following the discovery of the missing funds and the wrong-doing MF Global had engaged in.
Here’s the video of Kaminsky: