brokerage firm

DealBook: MF Global’s Collapse Spurs Curbs on Brokers

December 6, 2011 by NewsMaker Leave a Comment

Yuri Gripas/ReutersGary Gensler, the Commodity Futures Trading Commission chairman, testified last week before the Senate Agriculture Committee.

8:04 p.m. | Updated

Federal regulators approved tougher constraints on Wall Street risk-taking on Monday, adopting the MF Global rule, named after the collapsed brokerage firm that is believed to have improperly used millions of dollars of customer money.

The new rule will limit how the brokerage industry can invest customer money, largely barring firms from using client funds to buy foreign sovereign debt. It also prevents a complex transaction that allowed MF Global, in essence, to borrow money from its own customers.

The Commodity Futures Trading Commission, which voted unanimously to approve the rule, planned to finish it months ago.

But the agency delayed action as a result of strong opposition from Jon S. Corzine, who at the time was chief executive of MF Global. Mr. Corzine resigned on Nov. 4, four days after MF Global filed for bankruptcy protection.

“I believe that this rule is critical for the safeguarding of customer money,” Gary Gensler, the agency chairman, said Monday.

The revelation that client money was missing at MF Global has incited panic in the futures industry. MF Global’s customers, including farmers and hedge funds, are still owed millions of dollars.

Now, some customers say they are losing faith in a system that promised to protect their money. While brokerage firms can invest client money, such funds must never be commingled with company funds. MF Global violated that principle in its final chaotic days, tapping its segregated client accounts to meet its own financial obligations, people briefed on the matter have said.

The missing money, thought to be about $1.2 billion, has prompted several federal investigations in recent weeks. The futures commission is leading the hunt for the money, while the Federal Bureau of Investigation is examining possible wrongdoing.

Some regulators are also examining a flood of new rules for brokerage firms, part of an effort to prevent a repeat of the MF Global debacle. MF Global’s collapse has also led to renewed calls for federal regulators to keep a closer watch on brokerage firms, reclaiming oversight authority now delegated to for-profit exchanges like the CME Group.

Bart Chilton, a Democratic member of the commodities commission, is pushing for Congress to create an insurance fund for futures industry customers.

The rule adopted by the commission on Monday is aimed at the industry’s use of customer money. While firms can invest customer funds in United States Treasury securities and other plain-vanilla funds, the agency reined in riskier bets.

Until now, brokerage firms could invest client money in a number of securities, including sovereign debt. Under the new rule, if firms want to invest customer funds in foreign government bonds, they must petition the agency for an exemption. The new rule also bars firms from using client money so that one arm of the company can lend to another, a transaction known as an in-house repurchase agreement.

“As recent events have highlighted, the protection and preservation of customer funds is fundamental to our markets,” Scott O’Malia, a Republican member of the commission, said in a statement.

Article source: http://feeds.nytimes.com/click.phdo?i=9d57d7b171ea1bae8f184f13b16cfc73

Filed Under: Business News Tagged With: brokerage firm, brokerage industry, mf global

Fair Game: In MF Global, Sad Proof of Europe’s Fallout

November 6, 2011 by NewsMaker Leave a Comment

That old line from the Marx Brothers came to mind last week as MF Global, the brokerage firm run by Jon S. Corzine, was felled by over-the-top leverage and bad derivative bets on debt-weakened European countries.

Suddenly, all of those claims that American financial institutions have little to no exposure to Europe rang hollow.

You can understand why Wall Street wants to play down the threats from Europe. Its profits depend on the market’s confidence in the products it sells — and on the belief that the firms that sell those products will be around tomorrow.

But MF Global provides two lessons. The first is that our financial institutions are not impervious to Euro-shocks. The second is that when those problems reach our shores, they usually ride in on a wave of derivatives.

“The problems that we’ve had since the inception of the credit derivatives market have never been solved in any meaningful way,” said Janet Tavakoli, president of Tavakoli Structured Finance and an authority on these instruments. “How many times do we want to live through this?”

MF Global’s debacle was a result of complex swaps deals it had struck with trading partners. While those partners owned the underlying assets — in this case, government debt — MF Global held the risk relating to both market price and default.

These arrangements at MF Global underscore two big problems in the credit derivatives market: risks that can be hidden from view, and risks that are not backed by adequate postings of collateral.

These are the same market flaws that helped hide the problems at the American International Group — problems that arose from insurance that A.I.G. had foolishly written on crummy mortgage securities.

The International Swaps Derivatives Association, an industry lobbying group, contends that the market in credit default swaps is far more transparent than it was in 2008. For example, the Depository Trust and Clearing Corporation compiles figures on the number and dollar amount of swaps outstanding on its trade information warehouse.

The numbers are pretty mind-boggling. As of Oct. 28, for example, the warehouse reported $24 billion in net credit default swaps outstanding on debt issued by France, up from $14.4 billion one year ago. Some $17 billion in net credit default swaps were outstanding on Spain, up from $15.5 billion in 2010. Net swaps on Italy were $21.2 billion at last count, down from $28.5 billion last year.

The amount of net credit default swap exposure on the imperiled nation of Greece was much smaller: $3.7 billion late last month. It was $7 billion a year earlier. Officials at the I.S.D.A. say these bets are manageable because they are probably backed by substantial collateral.

MOREOVER, because of the “voluntary” nature of the Greek restructuring deal, which would require private holders of the nation’s debt to write off half its value, the I.S.D.A. predicts that the arrangement should not qualify as a default.

Therefore, the insurance that has been written on all this Greek debt will not cover investor losses generated by the 50 percent write-down — a disturbing consequence to those who thought they were buying insurance against that very risk. Given this turn of events, it’s hard to imagine why anyone would continue to buy credit default swaps.

In any case, the figures compiled by the D.T.C. don’t show the entire amount of credit insurance that has been written on Greece and other nations. D.T.C. says it believes its figures capture 98 percent of the market, but credit default swaps are often struck privately; not all of them are reported to regulators.

Consider an investment vehicle known as a credit-linked note. In these deals, investors buy a note issued by a special-purpose vehicle that contains a credit default swap referencing a debt issuer, like a government. That swap provides credit insurance to the party buying the protection, meaning that the holder of the note is responsible for losses in a so-called credit event, like a default.

Credit-linked notes are very popular and have been issued extensively by European banks. Many are governed by I.S.D.A. contracts, which define the terms of a credit event and require a ruling by the association on whether such an event has occurred.

But some deals have different definitions or contractual language overriding the I.S.D.A. agreement. “The people writing these contracts may say, ‘I would like to be paid if there is a voluntary restructuring of debt, or if Greece goes back to the drachma, or if Greece goes to war with Cyprus,’ ” Ms. Tavakoli said. “I can declare a credit event where I am entitled to get paid if any of those events happen.”

Cash calls can also be generated by declines in the market price of the notes or increases in the cost of insuring the underlying sovereign debt issue, according to credit-linked note prospectuses.

The other party has to agree to these terms up front. But, given the nature of these so-called bespoke deals, we don’t know the full extent of the insurance that investors have written on troubled nations or the circumstances under which the insurance must be paid. Neither do we know who may be facing severe collateral calls or demands for termination payments on the contracts.

When those collateral calls start coming, market values assigned to the securities that have been provided as backup can decline significantly. And when a company’s credit rating is downgraded, as MF Global’s was in late October, cash demands from skittish trading partners become even greater.

“At this late date we still don’t know the risks that are out there,” Ms. Tavakoli said. “This market is opaque, bespoke, and the regulators don’t know what they’re doing.”

At least regulators didn’t deem MF Global too big to fail. That’s a plus. But given the billions at stake in these markets, more transparency is needed about market participants, their financial soundness and their ability to withstand liquidity crises like the one that wiped out MF Global.

Article source: http://feeds.nytimes.com/click.phdo?i=75aa19019496c5345515c6484e3927f5

Filed Under: Economy News Tagged With: brokerage firm, european countries, mortgage securities

Stocks and Bonds: Stocks Plunge on New Concerns About Europe

November 2, 2011 by NewsMaker Leave a Comment

Major equity indexes fell 2 percent or more, sending the broader market in the United States back into negative territory for the year. Major indexes in Europe fell about 3 percent.

Stocks were lower throughout the session, under pressure from disappointing economic data in Europe, and tumbled sharply late in the session after the prime minister of Greece, George Papandreou, said that his Socialist government would hold a national referendum on the rescue package, raising questions about Greece’s ability to follow through on its part of the hard-won deal to stabilize the euro.

That announcement came after the release of economic data earlier in the day by the European statistics agency that inflation remained well above the European Central Bank’s target level and that unemployment in Europe remained stubbornly high.

Bank stocks were hit particularly hard after the European debt crisis claimed its first American financial institution, MF Global, the brokerage firm run by Jon S. Corzine. MF Global, holding more than $6 billion in sovereign debt of European countries, filed for bankruptcy protection. Citigroup and Bank of America each fell about 7 percent.

The economic data in Europe came at a bad time for Mario Draghi, who will take over as head of Europe’s central bank on Tuesday and will preside over his first policy meeting on Thursday. The bank’s policy committee will face a choice of whether to keep a tight rein on inflation or address rising unemployment and further signs of a looming recession.

As signals of a downturn accumulate, the Organization for Economic Cooperation and Development called on Monday for the central bank to essentially ignore inflation by cutting interest rates to encourage growth.

“The status quo is not acceptable,” Ángel Gurría, the secretary general of the agency, said in Paris as the organization updated its economic forecasts ahead of the meeting of the Group of 20 government leaders in Cannes, France beginning Thursday.

In comments aimed at G-20 leaders, Mr. Gurría called for a bolder response to what the organization said would be “a marked slowdown” in the euro area next year, including periods of declining economic output. Growth in the United States will also remain weak next year, the organization predicted, below the level needed to substantially reduce unemployment.

“Much of the current weakness is due to a generalized loss of confidence in the ability of policy makers to put in place appropriate responses,” the organization said in a statement.

In the United States, the Standard Poor’s 500-stock index fell 31.79 points, or 2.47 percent, to 1,253.30. The Dow Jones industrial average fell 276.10, or 2.26 percent, to 11,955.01 and the Nasdaq composite index was down 52.74 points, or 1.93 percent, at 2,684.41.

“Risk aversion is once again taking hold in markets,” strategists at Brown Brothers Harriman Company said in a market commentary.

The S. P. was down 0.35 percent for the year after Monday’s declines, while the Dow was up more than 3 percent and the Nasdaq 1 percent. Still, the Dow Jones industrial average was up 1,041.6 points in October for its biggest monthly point gain ever.

Treasury instruments surged in a flight to safety.

The Treasury’s benchmark 10-year bond rose 1 26/32, to 100 3/32, and the yield fell to 2.12 percent from 2.32 percent late Friday.

“Although encouraged by what we consider to be a good start, we suspect Europe will require other measures going forward to effectively deal with its sovereign debt problems,” said the U.S.A.A. Investment Management Company in another note.

In Italy, the prime minister, Silvio Berlusconi is under pressure to improve the economy. But Italy appears to be a source of worry for investors about whether the country will be able to service its debt. On Monday, 10-year Italian government bond yields pushed above 6 percent, the highest rate since August. The Euro Stoxx 50 index of euro zone blue chips closed down 3.1 percent, while the DAX in Germany and the CAC 40 in Paris lost about 3.2 percent. The F.T.S.E. 100 in London was down 2.8 percent.

Official data from Europe reinforced the pessimistic economic outlook. Inflation in the 17 European Union countries that use the euro was steady in October at a 3 percent annual rate, according to figures from Eurostat, the European Union’s statistics agency. That was contrary to analysts’ predictions of a slight decline because of slowing economic growth.

Meanwhile, unemployment edged higher, to 10.2 percent in September from 10.1 percent in August, Eurostat said.

The data, along with a muted official forecast for Spanish growth, offer no easy choices for Mr. Draghi, who succeeds Jean-Claude Trichet as president of the central bank.

The Bank of Spain said Monday that the Spanish economy stopped growing in the three months through September, as government austerity measures cut into domestic consumption.

At the same time, inflation remained well above the central bank’s target of about 2 percent. As a result Mr. Draghi, eager to establish his credentials as an inflation fighter, may be hesitant to preside over a rate cut just days after assuming the leadership.

“Our forecast is for the first cut to be delivered this week, but this uncomfortably high headline-inflation reading may make the E.C.B. want to wait until December,” analysts at HSBC wrote in a note to clients.

Unemployment was highest in Spain, at 22.6 percent, and in Greece, at 17.6 percent. Italy recorded one of the biggest jumps in joblessness, to 8.3 percent from 8 percent, as well as one of the biggest increases in inflation, to 3.8 percent from 3.6 percent.

“I think it is a big sell-off — profit-taking after an enormous, ferocious, violent run upward,” James W. Paulsen, chief investment strategist for Wells Capital Management, said in discussing the decline in stocks.

But he also forecast that some of the data to be released this week could restore market attention to the economy in the United States.

“I think Europe is certainly part of the reason” for the down day, he said. “Where we end this week is going to have more to do with the data coming from Main Street, U.S.A.”

In particular, Federal Reserve policy makers hold a two-day meeting that ends on Wednesday, and on Friday the government’s monthly report on the job market is to be released.

On Monday, the Chicago Purchasing Managers Index had a reading of 58.4 in October, meaning business activity in the United States continued to expand, but at a slower pace than in September, when it registered 60.4.

Michael J. de la Merced and Ben Protess contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=168f5cb404e8ed9edb447dfd84dba80c

Filed Under: Economy News Tagged With: brokerage firm, national referendum, prime minister of greece

DealBook: U.S. Inquiry Grows Over Olympus Payout

October 28, 2011 by NewsMaker Leave a Comment

Koichi Kamoshida/Bloomberg NewsOlympus’s president, Shuichi Takayama, defended paying $687 million to a now-defunct firm at a news conference on Thursday.

Federal authorities are intensifying an investigation into the large fees that the Japanese company Olympus paid to an obscure American brokerage firm. The Securities and Exchange Commission and other regulators have now begun their own inquiries into the $687 million payout, according to people briefed on the inquiries.

The Federal Bureau of Investigation opened the case only two weeks ago, but the inquiry has now grown to touch nearly every corner of the federal law enforcement arsenal. Federal prosecutors in Manhattan have jumped on the case, while the S.E.C. has begun an examination of the now-defunct brokerage firm, Axes America.

An S.E.C. spokesman declined to comment.

While the focus of the investigation is not yet clear, securities lawyers speculate that investigators will potentially examine whether the steep fees were kickbacks to Olympus officials involved in the deal. So far, it is believed that federal authorities are possibly interested in whether the fees amounted to money laundering or other illicit acts. A spokesman for the F.B.I. in New York declined to comment.

The F.B.I. began its examination soon after Olympus fired its chief executive, who had confronted the company’s chairman about the suspect payouts. Japanese regulators are now looking into the matter as well.

The questions arose from Olympus’s 2008 takeover of a British medical device company, the Gyrus Group. Olympus, which runs both a medical equipment business and a less lucrative digital camera business, has described the $687 million payout as a fee to Axes America for advising on that deal.

But when Olympus announced the acquisition, it said only that Perella Weinberg, an independent investment bank, advised on the deal. The company made no mention of Axes America, according to a recent PricewaterhouseCoopers report.

By any measure, the fees were eye-popping. The funds amounted to 36 percent of the value of the Gyrus deal, the PricewaterhouseCoopers report said. Olympus later doled out the bulk of the $687 million to a Cayman Islands company linked to Axes, a firm called Axam Investments.

At a news conference in Tokyo on Thursday, the newly installed president of Olympus, Shuichi Takayama, defended the funds paid to Axes and Axam, saying that Olympus had determined that the fee “would fully pay off.” He said the advisers were hired to give wide-ranging guidance to Olympus, including identifying potential takeover targets in the medical field.

“Olympus sought acquisitions as part of a strategy to find new growth areas and reduce our dependency on endoscopes,” Mr. Takayama said. “These acquisitions were part of that effort.”

Mario Takeno, an official at Japan’s securities watchdog, the Securities and Exchange Surveillance Commission, told a parliamentary committee on Thursday that the agency would “closely watch” the findings of a third-party committee set up by Olympus to investigate the payments.

“It’s clearly worth investigating,” said J. Mark Ramseyer, a professor of Japanese legal studies at Harvard Law School, who added that the fees were “bizarrely huge.” While the PricewaterhouseCoopers report did not identify “improper conduct,” it said that “given the sums of money involved and some of the unusual decisions that have been made, it cannot be ruled out at this stage.”

Axes America itself presents a curious case.

Just weeks after Olympus closed the deal for Gyrus, the firm shuttered its doors. And after the affiliated Cayman Islands company, Axam Investments, scooped up its portion of the bounty, it too shut down.

It was a peculiar end for both firms. In its 10-year history, Axes America never drew much notice on Wall Street. The firm, run by a longtime Japanese banker, Hajime Sagawa, generated mediocre revenue and never drew the ire of regulators.

Mr. Sagawa could not be reached for comment. A relative in Boca Raton, Fla., said he had planned to return from a business trip late last week, potentially to meet with the F.B.I. But the relative said on Wednesday that Mr. Sagawa had not yet returned to Florida. He has not been accused of any wrongdoing.

Michael C. Woodford, the recently fired Olympus chief, who is British, was in New York on Wednesday meeting with F.B.I. agents and federal prosecutors. He declined to provide specifics of the meeting. As Mr. Woodford flew to New York, Olympus fell deeper into turmoil. On Wednesday, the company’s chairman, Tsuyoshi Kikukawa, resigned.

At Thursday’s news conference, the executive vice president, Hisashi Mori, did most of the talking.

Mr. Mori said he had been introduced to the advisers by a person in Japan whom he declined to name. The advisers had worked with Olympus in an informal capacity for no fee since around 2004 before being formally hired two years later ahead of the 2008 Gyrus deal, he said.

An official said there had been no discussion of Mr. Woodford’s concerns over the acquisitions before the board voted to oust him.

Tensions flared at the news conference, as reporters berated Mr. Takayama and his colleagues for long-winded responses. “What is the point of this press conference if you are not going to address the main issues?” one reporter asked.

Article source: http://feeds.nytimes.com/click.phdo?i=ccf131c25480d1662f079f8c8ba477f6

Filed Under: Business News Tagged With: brokerage firm, illicit acts, independent investment

Fair Game: 5 Wisconsin School Districts and 3 Ill-Fated Securities

August 27, 2011 by NewsMaker Leave a Comment

UNEARTHING the story of the financial crisis is like conducting an archaeological dig. New shards keep emerging from the dust.

Here’s an interesting find. The Securities and Exchange Commission has sued Stifel Financial, a regional brokerage firm in St. Louis, accusing it of fraud in connection with complex debt securities it recommended to five Wisconsin school districts in 2006. Rather than settle with the commission, as many firms do, Stifel is defending the matter.

The S.E.C. sued Stifel on Aug. 10 because the firm advised the school districts to buy the three ill-fated securities, which the regulator said were unsuitably risky for unsophisticated investors. David W. Noack, the firm’s sales representative, misled school district officials when he told them that the deals, involving corporate bonds and rated AA-minus, were nearly as safe as United States Treasuries, the S.E.C. said. The Wisconsin school districts lost tens of millions of dollars on a $200 million investment, most of which was borrowed.

Stifel earned $1.6 million in commissions. But it did not create the securities — and this is where the case gets murky and interesting. Royal Bank of Canada built the failed investments, using parameters set out by Stifel and secretly profiting on the deal, Stifel said. The S.E.C. has not sued the bank.

In a lawsuit against Royal Bank of Canada, Stifel points to internal bank documents indicating a $5.4 million profit on two of the Wisconsin deals. Stifel also maintains that Royal Bank of Canada hid these and the third deal’s profits and had undisclosed conflicts as the deals’ originator. As such, RBC failed to abide by the contract with the school districts requiring “complete expense and fee transparency and disclosure,” Stifel said.

Kevin Foster, a Royal Bank of Canada spokesman, called Stifel’s allegations meritless and said the firm was trying to deflect blame to others for its central role in the troubled investments. “We never misrepresented our estimated profit to Stifel or the districts,” Mr. Foster said in a statement. “Stifel’s math is flat-out wrong and based on erroneous assumptions. The transactions were not profitable to RBC.”

Stifel and a lawyer for Mr. Noack declined to comment.

Here’s a short history of the transactions. In 2005, the school districts faced $400 million in unfunded health care and other non-pension guarantees for retired workers. Mr. Noack had been financial adviser to the districts for decades; he suggested they borrow money and invest in securities rated AA-minus that would generate more in yield than they had to pay in interest.

This becomes maddeningly complex: The bank from which the school districts borrowed — Depfa, of Ireland — told Stifel that it preferred collateralized debt obligations as the securities against which it would lend money to the districts. Stifel asked for proposals from banks. Royal Bank of Canada won the assignment and began to construct synthetic collateralized debt obligations linked to about 100 corporate bonds. It worked with ACA Management and UBS to select the underlying portfolios.

Depfa lent the money to the districts on a “nonrecourse” basis, meaning that the districts would not have to repay the loan if the securities bought with the borrowed funds defaulted. This arrangement, Stifel argues, shows that Depfa, a sophisticated institution, believed that the investment was not high-risk. Under the deal’s terms, Depfa could seize the collateral if the security’s asset values fell to 95 cents on the dollar and did not return to $1.01 within 30 days.

It didn’t take long for the deals to go south, and for the school districts to lose their $37 million investment. Depfa seized the underlying collateral supporting its $163 million loan. Lawsuits began flying.

Once again, we see the same toxic ingredients that have appeared repeatedly in the aftermath of the crisis: collateralized debt obligations, credit default swaps, ruinous leverage, an overreliance on credit ratings, greed and extreme naïveté.

But the case raises questions about a largely unexplored part of the collateralized debt obligation mania — whether Wall Street firms putting together these deals knew how to game the ratings agency models and profited by selecting debt issues to suit their purposes.

If, for example, a firm was designing an instrument to be used to bet against the underlying collateral — Goldman Sachs’s famous Abacus deal was created so the hedge fund manager John Paulson could short risky mortgages — a firm could assign debt issues to the deal that carried overly optimistic or misplaced ratings. Later, when reality intervened and the ratings were cut, those betting against the underlying collateral would prosper.

Article source: http://feeds.nytimes.com/click.phdo?i=d21a0cca6fa01927a399175926c11d42

Filed Under: Economy News Tagged With: bank of canada, brokerage firm, sales representative

Price of Tomatoes Has a Lot to Do With These Thefts

April 15, 2011 by NewsMaker Leave a Comment

Late last month, a gang of thieves stole six tractor-trailer loads of tomatoes and a truck full of cucumbers from Florida growers. They also stole a truckload of frozen meat. The total value of the illegal haul: about $300,000.

The thieves disappeared with the shipments just after the price of Florida tomatoes skyrocketed after freezes that badly damaged crops in Mexico. That suddenly made Florida tomatoes a tempting target, on a par with flat-screen TVs or designer jeans, but with a big difference: tomatoes are perishable.

“I’ve never experienced people targeting produce loads before,” said Shaun Leiker, an assistant manager at Allen Lund, a trucking broker in Oviedo, Fla., that was hit three times by the thieves. “It’s a little different than selling TVs off the back of your truck.”

Industry and insurance company officials said it appeared to add a new wrinkle to a nationwide surge in cargo theft.

In the case of the stolen tomatoes, the thieves seemed deeply versed in the ways of trucking companies and the produce industry. Transportation company executives and a law enforcement official said the criminals appeared to have set up a bogus trucking company with the intention of stealing loads of produce and other goods.

The company, based in Miami, was called EA Transport Express, according to Master Cpl. David M. Vincent of the Florida Highway Patrol’s cargo theft task force. The company registered with the Federal Motor Carrier Safety Administration in late February, according to the agency’s online database. That was right around the time produce prices were soaring.

“They were just sitting and waiting, watching the produce because they knew it was climbing,” said Clifford Holland, the owner of the transportation brokerage firm Old North State, which was a victim of the gang. “It was like a snake in the grass and they struck.”

In the produce industry, buyers and sellers typically use freight brokers as middlemen to hire the trucking companies that carry goods from place to place.

The thieves apparently began watching Web sites where brokers posted notices trying to connect trucking companies with loads they need carried.

In late March, they contacted Allen Lund. The broker carried out a standard series of checks, including verifying the company’s federal registration and its insurance coverage. Then it assigned the company to pick up a load of tomatoes from a shipper in Miami on Monday, March 28.

Over the next four days, working through Lund and three other freight brokers, EA Transport picked up four more loads of tomatoes, a load of cucumbers and a load of frozen meat from shippers across Florida, including in the Miami area, Palmetto and Punta Gorda.

At each pick-up, a driver working for EA showed up at the wheel of a tractor with a refrigerated trailer. The shippers loaded the pallets of tomatoes or the other goods into the trucks and the driver drove off. None of the loads got to their destinations.

The load of frozen meat, worth about $48,000, was picked up from a meatpacker north of Miami. It was bound for Salem, Ore. It is missing, too.

“This was definitely a smart organization,” said Mr. Holland, who was the broker on the load of meat. “They were smooth as silk.”

The thieves sought out loads headed for Detroit, Hartford, the Hunts Point market in New York, Los Angeles and Sacramento. Mr. Holland said that gave them time to carry out multiple thefts before the alarm was sounded, since in each case it would be from two to four days before the loads were due at their destinations. Brokers and shippers suspect the thieves had a buyer for the produce.

Tomato growers said that there had been occasional thefts in the past when prices were high, but the sophistication of this trucking ring was something new.

“We’ve never seen anything like this,” said Bob Spencer, an owner of West Coast Tomato in Palmetto, Fla., which lost a load of about 40,000 pounds of tomatoes that he said was worth about $42,000.

Interviews with several police departments in Florida revealed an investigation that might be lacking coordination.

The thieves appear to have benefited by stealing loads in several jurisdictions, with the result that some police departments were slow to share information about the crimes.

The Florida Highway Patrol said the cargo theft unit of the Miami Dade Police Department was leading the investigation. But Detective Roy Rutland, a spokesman for the Miami Dade police, initially denied that the department was aware of the thefts. He later said the department had been asked to assist in the investigation, but that it was not taking a lead role.

“We’re trying to figure out who’s handling this,” Mr. Rutland said on Wednesday. “We just learned that most of this occurred outside of our jurisdiction.”

Article source: http://feeds.nytimes.com/click.phdo?i=6fcaa529c2ca3e2314fab7020717d43a

Filed Under: Business News Tagged With: brokerage firm, motor carrier safety administration, tempting target