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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Category: MF Global
April 4, 2013 at 9:51 AM

The MF fraud: As bad as you thought

Why is Jon Corzine still at large?

Corzine, the former New Jersey senator and governor, former chief executive of Goldman Sachs, led MF Global, a futures broker and bond dealer that collapsed in 2011. MF Global investors lost as much as $2.1 billion. At the time MF ran into trouble, Corzine was eligible for as much as a $12.1 millon golden parachute. However, Steven Goldberg, a spokesman for Corzine, told me this afternoon that Corzine didn’t take any compensation when he stepped down. He also said Corzine has been unemployed since then, spending time with his family and doing philanthropic work.

Vanity Fair produced an exhaustive look at the collapse last year. Now a report to the bankruptcy trustee by Former FBI director Louis Freeh confirms what anyone paying attention already knew. According to Reuters, Freeh’s 124-page report states, “The risky business strategy engineered and executed by Corzine and other officers and their failure to improve the company’s inadequate systems and procedures so that the company could accommodate that business strategy contributed to the company’s collapse.” As is the habit of the likes of Corzine, he was not using the investments of MF Global to fund productive enterprises and create jobs and innovations, but betting to profit from the misery of others, on European sovereign debt.

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March 28, 2012 at 9:34 AM

Why is Jon Corzine still at large?

If a kid in a hoodie held up a store for $15, he’d soon be in the custody of Sheriff Sue. A well-connected guy in a business suit “loses” $1.6 billion in other people’s money? He’s still free. “Equal justice under law”? That’s rich.

Last fall, MF Global, headed by former New Jersey Governor and Senator Jon Corzine (and Goldman Sachs alum) collapsed. MF Global was a major broker of derivatives, you know, the weapons of financial mass destruction, and a primary dealer in Treasury securities. Apparently in trouble over bets made over the eurozone crisis, MF Global transferred some $700 million to cover shortfalls in the U.K. This was allegedly customers’ money, not funds from the firm itself — a big no-no even in the deregulated Wild West of Wall Street.

As usual, the case is highly complex and the investigation slow. Today, a House committee is holding the third congressional hearing on the ripoff. According to the Wall Street Journal, Corzine was in “direct contact” with JPMorgan about putting $175 million into a Morgan account to cover an overdraft. Yet assurances were apparently never satisfied that the money didn’t belong to customers.

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