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He was once touted as a possible replacement for Treasury Secretary Timothy Geithner. He was the solidly progressive United States Senator whose progression to New Jersey governor was once seen as a stepping stone to a White House run. He is a top bundler in Barack Obama's re-election. And he, and the generosity he showed with his ample checkbook, built the New Jersey Democratic Party during his rise, funding downballot candidates and struggling local parties. But as CEO of the securities firm MF Global, Jon Corzine presided over a company that eventually bet too heavily on European sovereign debt, was rocked by credit rating downgrades and investors pulling out, filed for bankruptcy protection just yesterday amid rumors that $700 million in client funds were missing, then confirmation that federal regulators were indeed investigating $700 million - $700 million! - unaccounted for.
Now multiple news sources (here's WSJ and Associated Press) are reporting that MF Global has admitted to federal regulators that money had been diverted out of customer accounts, which is against the law.
Impossible to know at this point how deep this goes, who if anyone will be held culpable, and what will happen in the Chapter 11 filing, or in the future of the man running the show at MF Global. The press on this 8th largest corporate bankruptcy in U.S. history and on MF Global's chief have been brutal (see Wow, Jon Corzine - Way To Fly Your Company Into A Mountain at Business Insider). And may get worse. You'd expect that. This sounds like a clusterfuck of gigantic proportions. That said, we don't know what facts will eventually shake out here, or who the pointy knives will come out for. But I'm for more regulation of of financial institutions that gamble big for bigger payouts.
Let the regulators find what they find. |
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