Three years ago, in February 2013, traders were outraged upon learning that the National Futures Association refused to ban former MF Global chief Jon Corzine from trading with other people’s money, rejecting a motion brought before that body’s board of directors to do so. The decision was a blow to a vocal group within the commodities trading world who – noting that Corzine has not been held accountable by the government for alleged crimes – wanted to see him publicly upbraided by his peers in the market.
All that changed today when Corzine agreed to pay a $5 million civil fine to settle a lawsuit by the U.S. Commodity Futures Trading Commission over the 2011 collapse of the former New Jersey governor’s brokerage, MF Global Holdings. More importantly, under the settlement disclosed on Thursday, Corzine also agreed to be barred for life and never again work for a futures commission merchant, or register with the CFTC in any capacity.
Jon Corzine, former Governor of New Jersey and CEO of Goldman Sachs, took over the helm of MF Global in March 2010. When revenue at the bank failed to live up to expectations, Corzine developed a scheme to place a massive $6BN bet on the sovereign debt of the aptly named PIIGS (Portugal, Italy, Ireland, Greece, Spain) through a financial structure known as a “Repo to Maturity”. To summarize the strategy for all you aspiring CEO’s, when you find it difficult to generate organic revenue growth sometimes the better option is to just bet your entire firm on a single, massively-levered trade on the sovereign debt of countries on the verge of insolvency.
– Vapor Capital Asset Mismanagement LP: Jon Corzine Planning Hedge Fund Launch (ZeroHedge, April 19, 2015):
Shortly after Jon Corzine not only destroyed MF Global but “vaporized” $1.6 billion in supposedly segregated client funds which were illegally commingled with operating cash, Jon Corzine had a brief encounter with the legal system including several kangaroo court sessions in Congress, which ultimately led to absolutely nothing for two simple reasons.
– A Close Encounter With Jon Corzine (ZeroHedge, Feb 21, 2015)
– You Can’t Make This Up: MF Global Sues PWC, Blames It For Its Collapse (ZeroHedge, March 29, 2014):
File this one in the “you can’t make it up” category. Over two years after the MF Global collapse, in which the primary dealer headed by Jon “I don’t recall” Corzine all but admitted it had engaged in the cardinal sin of any financial intermediary, i.e., commingling money, to cover up a trade gone horribly bad and which resulted in the disappearance of some $1 billion in client funds until such time as the bankruptcy process managed to “liberate” funds from other part of the company, MF Global has suddenly figured who is at fault: not the CEO, not his brown-nosing lackey, not some janitor meant to be scapegoated precisely in a situation such as this, not even the infamous “glitch” – no, the party that is accountable for the firm’s theft of client funds, and horrible investing decisions that led to its bankruptcy, are the accountants.
No really: yesterday MF Global Holdings sued PricewaterhouseCoopers LLP for $1 billion, alleging accounting malpractice helped bring down the brokerage company.
Like we said, you can’t make this up. From Bloomberg:
– 31 Year Old Son Of Jon Corzine Reported Dead (Zerohedge, March 13, 2014):
He may not have been a banker or trader, but the just reported passing of one Jeffrey Corzine, 31, son of the infamous Jon Corzine will likely raise more eyebrows than all previous recently reported banker deaths combined.
According to the NY Post, Jeffrey Corzine, who friends said worked as a drug counselor in California, was just 31, when he passed. Details of his death were not immediately known.
“Mr. Corzine is obviously devastated by this tragic loss,” said his spokesman, Steven Goldberg. “We ask that all respect his family’s privacy during this very difficult time.”
– Feds Raid Marijuana Dispensaries in Washington State (Liberty Blitzkrieg, July 25, 2013):
Like an insecure bully trying to demonstrate how tough he or she is and feel better about itself, the Feds raided marijuana dispensaries in Washington state despite the fact that Proposition 502 made it legal. Recall, I warned about this last year in my piece: Colorado Legalizes Marijuana: Your Move Eric Holder.
More links are down below.
– Jon Corzine will not face criminal charges over MF Global: report (MarketWatch, July 8, 2013):
There will be no criminal charges for former New Jersey Governor Jon Corzine over the use of customer funds leading up to collapse of MF Global.
The criminal probe into whether there was wrongdoing on the part of Corzine by the Department of Justice will now be dropped due to lack of evidence, said a report in The New York Post, citing a person with knowledge of the matter.
– Apparently This MF Global “Clusterfuck” Does Not Deserve Criminal Charges (ZeroHedge, July 1, 2013):
We salute the CFTC for finally, if belatedly, doing the right thing and going after Jon “the bundler” Corzine. However, we wonder, just how is the following documented exchange between Edith O’Brien, MFG’s assistant treasurer, and some MF Global employee, not considered crime-worthy by Eric Holder? Or is the US Attorney General too busy to answer, having to come up with his own alibi to avoid going to jail for lying to Congress under oath?From the MF Global Civil, not Criminal, Complaint
Just prior to 6:30 p.m. ET, O’Brien told Employee #2 on a recorded telephone line that the Firm would not be in compliance with customer segregation rules because funds were not being returned to customer segregated accounts:
O’BRIEN: It is a total clusterfuck . . . . They have to move half a billion dollars out of BONY to pay me back . . . . Tell me how much money is coming in and I will make sure it gets posted. But if you don’t tell me, then tomorrow morning I am going to have a seg problem . . . . I need the money back from the broker-dealer I already gave them. I can’t afford a seg problem.