Welcome, Guest! - or
Easy to remember!  »  VinNews.com

New Jersey - Regulators File Civil Charges Against Ex-N.J. Gov. Corzine

Published on: June 27, 2013 04:25 PM
By: AP
Change text size Text Size  
Former CEO of MF Global Inc., Jon Corzine (C), is sworn-in to testify before the House Agriculture Committee hearing on 'Examination of MF Global Bankruptcy', on Capitol Hill in Washington DC, USA, 08 December 2011. EPA/MICHAEL REYNOLDSFormer CEO of MF Global Inc., Jon Corzine (C), is sworn-in to testify before the House Agriculture Committee hearing on ‘Examination of MF Global Bankruptcy’, on Capitol Hill in Washington DC, USA, 08 December 2011. EPA/MICHAEL REYNOLDS

New Jersey - Federal regulators are accusing former New Jersey Governor Jon Corzine of failing to properly manage MF Global, which misused customer funds before its 2011 collapse.

A civil lawsuit filed Thursday by the Commodity Futures Trading Commission seeks to ban Corzine from trading in the futures market and demands he pay unspecified penalties.

The lawsuit said Corzine bore responsibility for MF Global’s unlawful acts because he directly or indirectly controlled the company and its holdings and “either did not act in good faith or knowingly induced these violations.”


“He also failed to supervise diligently the activities of MF Global’s officers, employees and agents.

Corzine has disputed the allegations by the CFTC, which regulated MF Global.

The regulator also filed civil charges against Edith O’Brien, the firm’s former assistant treasurer.

About $1.2 billion in customer funds disappeared when the firm collapsed. Nearly 90 percent of the money has been recovered for U.S. customers of the firm and around 18 percent for foreign customers.

MF Global has agreed to pay a $100 million penalty as part of a settlement also announced Thursday. The money will come from bankruptcy proceedings.

New York-based MF Global sought bankruptcy protection after a disastrous bet on European countries’ debt. Under Corzine’s leadership, the firm bet $6.3 billion on debt issued by Italy, Spain and other European nations with deeply troubled financial systems. The bonds plummeted in value in the weeks before MF Global’s failure as fears intensified that some European countries might default.

The $41 billion bankruptcy was the eighth-largest in U.S. history.

Corzine, 66, had been a CEO of Wall Street powerhouse Goldman Sachs before entering politics in 2000. He served as a Democratic U.S. senator from New Jersey and later governor of that state. Corzine also has been a major fundraiser for Democrats. He took the top job at MF Global in March 2010 after losing his bid for re-election as governor in 2009.

The lawsuit said that when Corzine joined the firm he planned to convert the company into a major Wall Street investment bank that generated revenue from proprietary trading and other business lines. It said Corzine tried to boost revenue by making significant investments in financial instruments such as the sovereign debt of certain European countries.

The plan worked for a while. The investments became an important part of the firm’s revenue, though the investments grew increasingly risky, the lawsuit said. By the second half of 2011, the investments and other factors put significant strains on the company’s capital and liquidity and by October 2011, sources of cash were drying up, the lawsuit said.

Corzine and other company employees communicated with one another, sometimes by email and sometimes on recorded telephone lines, concerning the firm’s “dire situation,” the lawsuit said.

By the last week of October 2011, MF Global violated U.S. commodity laws by using nearly $1 billion of customer segregated funds to supports its own proprietary operations, directly harming thousands of customers, the lawsuit said.

More of today's headlines

Washington - The U.S. Senate, after a decade of trying and failing, on Thursday passed a wide-ranging immigration bill that would put 11 million foreigners now living... New York - 29 year-old Gershon Barkany pleaded guilty as part of a plea deal in federal court on Wednesday to bilking real-estate investors out of $62M in an elaborate...



Read Comments (2)  —  Post Yours »


 Jun 27, 2013 at 05:03 PM Anonymous Says:

come on, we all know nothing will happen,
Corzine is a liberal democrat, he is great buddies with obama, he wont even get a slap on the wrist,
who cares if he stole/loss a billion dollars of other peoples money, wasn't his money-

just remember one thing folks, lie, cheat and steal okay if you are a liberal democrat, not okay if you are republican, BTW, its a bigger plus if you are great friends with obama


 Jun 30, 2013 at 12:22 AM ActualJew Says:

should have been criminal charges. also should have charges for what he did here in NJ during his reign of terror.


to post a comment

Click here to sign-in.

Scroll Up

Sell your scrap gold and broken jewelry and earn hard cash sell gold today!