Most Active Stories
- Creative Living E-Newsletter Sign Up
- Michael Feinstein New Year's Eve at the Rainbow Room airs the 31st, at 9 pm
- Christmas with the Mormon Tabernacle Choir airs on Friday, December 19th at 9 pm
- "Elsa's Legacy: The Born Free Story" on Nature, airs the 17th at 7 pm
- Sacred Journeys Pt. 3 and Pt. 4 continue on Tuesday, the 23rd, beginning at 7 pm
Thu June 27, 2013
Regulators File Charges Against Corzine Over MF Global Debacle
Federal regulators are suing former MF Global Holdings CEO Jon Corzine, accusing him of not properly supervising the company that filed for bankruptcy back in 2011. The Commodity Futures Trading Commission says Corzine failed to keep money that belonged to the brokerage's customers from being used to cover MF Global's obligations.
The charges are contained in a civil complaint filed Thursday. It seeks to impose fines on Corzine and other defendants, as well as the return of any salaries and bonuses earned during the violations, and a ban from any further work in commodities futures and options. The trading commission seeks a trial by jury in the case.
Corzine, a former New Jersey governor and U.S. senator, is not accused of ordering or knowing about the unlawful use of around $1 billion in customers' money. Instead, regulators say that his "strategy called for making increasingly risky and larger investments of the firm's money," and that despite warnings from within the brokerage firm, he didn't do enough to bolster its liquidity.
"Ultimately, these failures contributed to the massive customer losses," the regulators said in a news release announcing the charges in U.S. District Court for the Southern District of New York.
The regulatory agency is also suing former MF Global Assistant Treasurer Edith O'Brien, blaming her for "MF Global's unlawful use of customer funds that harmed thousands of customers and violated fundamental customer protection laws on an unprecedented scale."
As The Two-Way reported last year, a congressional inquiry into MF Global seemed to present conflicting versions of events from Corzine and O'Brien.
The commission says it has reached a settlement agreement with the trustee of MF Global, which filed for Chapter 11 bankruptcy in October of 2011, that "includes 100 percent restitution of the approximately $1 billion lost by all commodity customers" when the firm failed.
As Bloomberg News reports, the regulators themselves have also been criticized:
"The CFTC has itself been blamed at times for contributing to MF Global's downfall. The regulator, chaired by Corzine's ex-Goldman Sachs colleague Gary Gensler at the time of MF Global's collapse, failed to coordinate with the Securities and Exchange Commission, according to a 101-page report last November by U.S. House Republicans."