Civil Charges Filed Against Jon Corzine Over MF Global Collapse

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By Douwe Miedema

WASHINGTON - A top U.S. regulator charged former MF Global chief Jon Corzine over the collapse of the futures brokerage, placing the former New Jersey governor firmly at the heart of one of the country's 10 biggest bankruptcies.

The Commodity Futures Trading Commission said on Thursday it will seek to ban Corzine and former Assistant Treasurer Edith O'Brien from the industry in a civil case, and also seek penalties against the two.

"Mr. Corzine is charged with being more than a passive actor in the downfall of MF Global," CFTC enforcement head David Meister said on a call with journalists. "He lacked good faith and ... violated his supervision obligations."

The CFTC also settled with MF Global Inc, which agreed to pay a $100 million penalty and all the funds still owed to customers.


MF Global collapsed in October 2011 under the weight of aggressive bets on sovereign debt, after Corzine -- a former Goldman Sachs co-chief executive and New Jersey governor -- sought to transform the brokerage into a global investment bank.

But investors quickly lost confidence in the company's health when the European economy weakened in the middle of 2011, asking MF Global to put up more money to secure the trades, and causing its remaining cash to rapidly vanish.

Customers were left reeling after it was discovered that about $1.6 billion was missing from their accounts, something that is explicitly banned under futures regulation, and which caused a political fire storm.

In its investigations, the CFTC found that MF Global's company treasurer was describing the liquidity situation as "skating on the edge" and recommended to "take the keys away" from Corzine, which did not happen.

Andrew Levander, a lawyer for Corzine, did not immediately respond to a request for comment. Neither did a Corzine spokesman. O'Brien's lawyer had no immediate comment.

Corzine has often struck a defiant tone when testifying before lawmakers about the debacle, pointing the finger at back-office dealings he had no insight in and denying knowledge of any instructions to misuse customer funds.

O'Brien invoked her constitutional right against self-incriminated and refused to answer questions when called to testify. But the CFTC's complaint places the two firmly at the heart of the $41 billion bankruptcy.

"Our investigation also recovered an audio recording of (O'Brien) saying to a colleague that it could be 'game over' from a regulatory perspective if the customer funds weren't returned," Meister said on the call.

Four years after the end of the financial crisis, there have been few prosecutions, and there is increasing pressure on regulators to bring more of those responsible for the credit collapse to task.

The CFTC said it would continue to press charges against MF Global's holding company.

Louis Freeh, the trustee liquidating MF Global, has said in the past he believes customers would get all their money back when the company in April won court approval to liquidate its assets, and end its $40 billion bankruptcy.

Most customers have already been reimbursed for about 93 percent of the value of their accounts.



MF Global Report Blames Corzine for First Time

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176 Comments

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billscaf

Civil violation?? How about criminal??

June 28 2013 at 5:08 PM Report abuse +1 rate up rate down Reply
bloveday36

Why are evil greedy people like corzine allowed to steal and be a flagrant crook - is our system/government so liberal - this scum should be hung -

June 28 2013 at 4:57 PM Report abuse rate up rate down Reply
spmazanek

Hillary and Bill's good buddy and business associate. Google "Corzine, Clinton".

June 28 2013 at 4:36 PM Report abuse +1 rate up rate down Reply
1 reply to spmazanek's comment
setanta54s_back

heheeeeeeeeeeeee ad what about louieee free_uh ?

June 29 2013 at 6:39 AM Report abuse rate up rate down Reply
BILLMASELLI

this bum belongs in jail...he sucked as governor and worse as a money manager

June 28 2013 at 3:22 PM Report abuse +1 rate up rate down Reply
imd89

There will be no criminal charges with his close relationship with Obama protecting him raising big money for his re-election.

June 28 2013 at 1:07 PM Report abuse +2 rate up rate down Reply
1 reply to imd89's comment
bloveday36

obama must be just as much a crook as he is -

June 28 2013 at 4:58 PM Report abuse rate up rate down Reply
Ron Styrker

This guy should have been sitting in a jail cell a long time ago.

June 28 2013 at 12:00 PM Report abuse +2 rate up rate down Reply
nedfarn25

they are doing what that fraud obama and the one party rule demorats should have done but didnt--go after him and fry his ass

June 28 2013 at 10:18 AM Report abuse +2 rate up rate down Reply
boxcart007

Dumb Question Here: (being Sarcastic of course) When are the Criminal charges coming, isn't usually the Criminal first followed by the Civil ? Oh I forgot, we're talking about the one of the 1 or 2% that never face Criminal Charges, because this is just everyday business, but if someone raped they're own company and left stockholders holding the bag, they're sorry ass would be hauled in front of a Judge before the Ink Dried on the paperwork. This System is a real Joke. The "System" prosecutes people for alot less and yet these Rich Thieves just make phone calls or even have they're aides make the phone calls to the Lawyers to have them deal with these issues. Again: "Great Country America".........
Meanwhile they're victims are left homeless and penniless. Retirement, What's That ???
They'll continue to work till the day they die while this creep is living it up in the Swiss Alps.
You noticed how fast he Bailed when he heard they were gunning for him right ? Gee I wonder why that is ???........Wow !!!!!!!!!!!!!!!

June 28 2013 at 6:41 AM Report abuse +1 rate up rate down Reply
leadfoot494

hmmmmmmmmm makes me wonder what he really did to the state of nj

June 28 2013 at 5:08 AM Report abuse +2 rate up rate down Reply
jesuaphn

What an SOB....put his ass in prison

June 28 2013 at 4:13 AM Report abuse +2 rate up rate down Reply