Posts Tagged Jon Corzine

MF Global’s Missing Customer Money All Accounted For: Trustee

Jon Corzine might not know where the money is, but somebody certainly does.

James Giddens, the trustee overseeing MF Global’s liquidation, told the Senate Banking Committee on Tuesday that he has now accounted for the $1.6 billion in customer funds that went missing following the brokerage firm’s collapse, adding that his analysis “is substantially concluded,” CNNMoney reports. Giddens team has been tracking down the funds ever since MF Global became the eighth-largest bankruptcy in U.S. history last October.

Giddens additionally pushed for broader restrictions on actions like those taken by the brokerage firm. The trustee argued for the creation of an insurance fund that would protect customers if a similar event ever occurred in the future, The New York Times reports. “With such a fund in existence,” Giddens said, “three-quarters of MF Global’s commodities customers would not have been subject to any loss and could have been made whole within days of the bankruptcy filing.”

Some action has already been taken by regulators in an attempt to ensure such a situation never repeats itself. The so-called MF Global rule, approved in December, will curb the use of customer funds within the brokerage industry.

The news likely comes to as a relief to many nervous MF Global customers, who could only watch as former MF Global CEO Jon Corzine testified shortly after the firm’s collapse that he “simply [did] not know where the [lost customer] money” was. As recently as January, it was thought that the money may have simply “vaporized, ”following a Wall Street Journal report. In February, news came that large portions of the money had been traced to banks like JPMorgan Chase in the United Kingdom, as well as to other customer’s accounts.

But soon after those reports, it was additionally found that a MF Global employee received approval to move $165 million of the company’s funds from one of its accounts to another in a single minute, further raising suspicions that the firm may have inappropriately moved customer money in an effort to avoid collapse.

Even if the money has been found, it remains to be seen whether all of it will be returned in full to MF Global customers, although so far Giddens has recovered about 80 percent of customer losses, according to CNNMoney. That’s of particular concern to the large portion of MF Global clients that are farmers, since their livelihoods in many cases depends on the restitution of funds.

It’s unlikely that federal authorities will bring criminal charges against MF Global executives in connection with the lost funds. Giddens, for his part, has said he supports civil fines against Corzine and others.

See Huffingtonpost for a timeline of MF Global’s collapse –

Source:  Huffingtonpost

Posted by Steven Maimes, The Trust Advisor



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Grand Jury Convened in MF Global Case

Federal prosecutors in Chicago convened a grand jury last year to investigate potential wrongdoing surrounding the collapse of MF Global and the disappearance of customer money from the commodities firm once run by Jon S. Corzine, according to a regulatory filing.

The CME Group, the exchange operator and for-profit regulator of MF Global and other commodities brokerage firms, disclosed in its annual report on Tuesday that it had received two subpoenas related to the defunct brokerage firm: one from a federal grand jury in Chicago and another from the Commodity Futures Trading Commission, the federal regulator heading up the investigation.

The grand jury in Chicago issued the subpoena to CME on Nov. 1, the day after MF Global filed for bankruptcy. The subpoena from the futures commission came on Nov. 3.

More recently, the trustee overseeing efforts to recover customer money sought documents from the CME Group, according to the filing, which did not detail the extent of the request. The trustee, James W. Giddens, sent the request on Jan. 31.

The Federal Bureau of Investigation and federal prosecutors in New York are also examining how the firm misused more than a billion dollars of customer money, which has not been recovered. The scope of the investigation encompasses billions of dollars in wire transfers in the days before the firm’s downfall, dozens of witnesses, and tens of thousands of e-mails and documents.

While the existence of a grand jury represents the seriousness of the case, it does not indicate wrongdoing or imminent charges. The grand jury determines whether charges can be brought. And it is unclear what shape the investigators’ case is taking or who they might be pursuing.

No one at MF Global, including Mr. Corzine, a former Democratic governor of New Jersey, has been accused of wrongdoing.

The CME Group, which also has not been accused of any wrongdoing, was simply asked “to produce information and witnesses in connection with the authorities’ investigation of the matter,” the exchange said in its annual report.

CME has been criticized for how it responded to the crisis at MF Global. Officials at CME, charged with oversight of MF Global’s operations, left the firm’s headquarters early on Oct. 28 as the situation was spiraling out of control and before receiving assurances that customer money was safe. MF Global filed for bankruptcy on Oct. 31.

Mr. Giddens and regulators have since traced nearly all of the customer cash transfers in the weeks before MF Global collapsed. The money passed through a battery of financial players, including major banks like JPMorgan Chase, in addition to trading partners and exchanges.

A spokeswoman for the CME Group declined to comment.

Source:  Dealbook NYT

Posted by Steven Maimes, The Trust Advisor.


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Missing MF Global Customer Funds May Have ‘Vaporized’

Jon Corzine still doesn’t know where the money is, and it seems nobody else does either.

A “significant amount” of the missing $1.2 billion in MF Global customer funds may have been “vaporized,” the Wall Street Journal reports, citing “a person close to the investigation” into the missing funds. The money could have gotten lost during chaotic trading leading up to the brokerage firm’s bankruptcy filing.

Yet only one week before the brokerage collapsed, MF Global’s CFO sent an email to Standard & Poor’s saying the company had “never been stronger,” according to Bloomberg.

Some officials reportedly believe that despite public claims to the contrary, the firm was growing more concerned about its European bets, employees dipping into customer money and using it to unfreeze assets at banks and meet demands for more collateral, according to the WSJ.

The report comes nearly two months after former MF Global CEO Jon Corzine, once chief executive of Goldman Sachs, told a Congressional panel “I simply do not know where the money is.” The firm filed for bankruptcy in October, after risky bets related to the European debt crisis compromised its position. Corzine resigned shortly after the bankruptcy and the company laid off more than 1,000 workers.

The bankruptcy filing also spawned investigations by multiple federal agencies into allegations that the firm misused hundreds of millions in customer funds. In addition to Corzine, the company’s CFO and COO also told lawmakers that they don’t know where the missing funds are. Some of the missing money may have been found at a British JPMorgan Chase in November, according to The New York Times.

That hasn’t stopped the government from acting. Roughly two months after the extent of the firm’s collapse was made clear, the Commodity Futures Trading Commission, a federal regulator tasked with overseeing the derivatives market, approved “the MF Global rule” in order to avoid similarly improper uses of client money in the future, according to The New York Times.

Even if the rest of the money turns up — a prospect that seems unlikely — Corzine’s reputation may never recover. The former New Jersey Governor, Senator and CEO of Goldman Sachs has become somewhat of a pariah on Wall Street since the meltdown. Some of his former employees created a pinata featuring a photo of him at a holiday party and President Obama gave back tens of thousands of dollars of campaign donations from Corzine.

Source: Huffington Post

Posted by Steven Maimes, The Trust Advisor.


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Corzine Shopped For French Chateau Just Before MF Global Collapse

As MF Global inched towards collapse, CEO Jon Corzine pre-occupied himself with a few other things — namely securing a chateau for him and his wife in the ritzy south of France.

At a party in Paris on October 15 — just two weeks before MF Global filed for bankruptcy, costing more than 1,000 workers their jobs — Corzine and his wife, Sharon Elghanayan, were discussing , according to an upcoming report in Vanity Fair.

“It’s not in Cap Ferrat,” one person at the party told Vanity Fair they recall Elghanayan saying in an effort to tone down the extravagance. Cap Ferrat is a coastal town in the south of France known for its lavish lifestyle.

Though Corzine, a former Goldman Sachs CEO, governor of New Jersey and Senator, was able to scrounge up the money for a possible chateau purchase, he’s having a little bit more trouble tracking down MF Global clients’ money, much of which is still missing. Shortly after the company filed for bankruptcy on October 31 over risky bets on European debt that went disastrously wrong, hundreds of millions worth of customers’ money was discovered missing.

Corzine, who resigned in early November after the firm’s collapse, told Congress of the lost client funds: “I simply do not know where the money is.” The missing funds have attracted the attention of the FBI and federal prosecutors, according to Reuters.

Sources: Huffington Post, Vanity Fair

Posted by The Trust Advisor.



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Was Jon Corzine a True Gambling Addict?

A New York Times investigation into the MF Global tenure of former U.S. senator, New Jersey governor, and Goldman man Jon Corzine concludes that the CEO “played a much larger, hands-on role in the firm’s high-stakes risk-taking than has previously been known.” Upon Corzine’s first visit to the company’s Chicago offices, he asked a broker excitedly, “How are you making money on side bets? What else are you guys doing to make money here?” Corzine eventually upped the ante at the “miniature Goldman Sachs,” and brought the whole thing down.

Jon Corzine

Corzine personally pushed big MF Global bets

He pushed through a $6.3 billion bet on European debt — a wager big enough    to wipe out the firm five times over if it went bad — despite concerns from other executives and board members. And it is now clear that he personally lobbied regulators and auditors about the strategy.

Corzine compulsively traded for MF Global on his BlackBerry during meetings

His obsession with trading was apparent to MF Global insiders over his 19-month tenure. Mr. Corzine compulsively traded for the firm on his BlackBerry during meetings, sometimes dashing out to check on the markets. And unusually for a chief executive, he became a core member of the group that traded using the firm’s money. His profits and losses appeared on a separate line in documents with his initials: JSC.

Sounding like a true gambling addict, Corzine defended his moves at a Congressional hearing last week: “As of today, none of the foreign debt securities that MF Global used has defaulted or been restructured,” he said. “There actually were no losses.” Technically he’s right, and Corzine has not been accused of wrongdoing. But as the Times notes, “Some $1 billion in customer money remains missing and thousands of clients, including small farmers in Kansas or hedge funds in Connecticut, still do not have nearly a third of their funds.”


Posted by Steven Maimes, The Trust Advisor.




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