Tue, Jan 17, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Corzine claims lack of involvement in MF Global running during congressional hearing

Friday, December 09, 2011
Opalesque Industry Update – Jon Corzine testified during the first of three subpoenas from congressional committees investigating on Capitol Hill Thursday about the collapse of commodities brokerage MF Global and the missing $1.2bn. He headed MF from March last year until his resignation last month. AP speculated that he would invoke the Fifth Amendment – but instead he answered all questions.

According to a CNBC Video recording of his announcement, The Hon. Jon S. Corzine said that he had been “stunned” when he was told on Sunday October 30th, 2011 that MF Global could not count for many hundreds of million dollars of client money.

“I simply do not know where the money is or why the accounts have not been reconciled today.”

He acknowledged that as CEO of MF Global he ultimately had responsibility for the firm; however, he conceded, he did not involved himself with the mechanics of the clearing and the settlements of trades or the movement of cash and collateral, nor did he have expertise or experience in the operational aspects.

Corzine pointed at the confusion created by the sheer number of transactions during MF Global’s last days, which would cloud whether internal operational errors were done in-house – once again pointing at an area he just claimed to be ignorant about – or whether “banks or counterparties have held on to funds that should rightfully have been returned to MF Global” – here pointing his fingers to the outside.

Corzine’s speech portrayed detachment about the outcome of his firm’s collapse on two counts. First, he assured that the trustee of bankruptcy, the receiver and the regulator are “working to answer these questions.” So, again, no input from him or the firm towards explaining what precisely happened. And he ended by apologising personally and on behalf of the company to customers, employees and investors. “I truly know that they are bearing the brunt of the impact of the firm’s bankruptcy.” Leaving himself out of those bearing the brunt.

Throughout more than two hours of congressional testimony, he said “I certainly would never intend to direct or have segregated funds moved.” Lawyers told Bloomberg it was no surprise that he repeatedly focused on intent. The language Corzine used “is certainly an attempt to defuse any criminal responsibility,” said Stephen Braga, an attorney with Ropes & Gray LLP in Washington.

Jon Stevens Corzine (born 1947) is the former CEO of Goldman Sachs and of MF Global, and a former American politician, who served as the 54th Governor of New Jersey from 2006 to 2010.

MF Global's is apparently the eighth-largest bankruptcy in U.S. history.

George Soros's family fund bought about $2bn of European bonds formerly owned by MF Global, the very debt that helped force the securities firm to file for bankruptcy protection Oct. 31, the WSJ reported today. And David Tepper's Appaloosa Management bought 8.64% of MF Global Holdings Ltd. stock, exceeding 5% ownership, on Nov. 2nd, said Bloomberg.

Former customers of MF Global Holdings Ltd. on Monday charged that JP Morgan Chase was trying to unfairly claim their assets in the court tussle over MF Global's remains, said Nasdaq. And some of the 1,066 workers fired from the futures brokerage filed three lawsuits over their sudden dismissals last month.

Furthermore, U.S. Commodity Futures Trading Commission Chairman Gary Gensler withdrew from the agency’s investigation of MF Global amid concern that his ties to Corzine may give the appearance of a conflict of interest, reported Bloomberg.

B. Gravrand


See our recent coverage related to MF Global:
08.12.2011 Opalesque Exclusive: Jon Corzine's toppling of government regulators should be considered Source

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Southpoint Capital gains 3.8% in Q3, bringing year-to-date returns to 5.2%[more]

    From Valuewalk.com: Southpoint Capital Advisors, the $3 billion New York hedge fund founded by former employees of David Einhorn’s Greenlight Capital, added 3.8% net during the third quarter of 2016, bringing year-to-date returns to 5.2% and cumulative returns since inception (July 2004) of 237.4% a

  2. The Big Picture: The case for emerging market debt in 2017[more]

    Benedicte Gravrand, Opalesque Geneva: Emerging market (EM) assets outperformed in 2016 mainly because of stronger fundamentals and an improving international environment, with GDP picking up speed, leading to positive earnings revisions for the first time in five years,

  3. Hedge funds gain across strategies in December, outperform MSCI to close at record index level in 2016[more]

    Komfie Manalo, Opalesque Asia: Hedge funds posted gains across all strategies in December to conclude 2016, with the HFRI Fund Weighted Composite Index (FWC) rising to a record index value level as oil prices surged, equities gained and U.S. interest rates increased into year end, accordin

  4. Performance - BlackRock's robot stock-pickers post record losses, Soros-backed fund Glen Point loses in first trading year, Regal Funds Management: Bleak year as returns in key funds plunge 25pc, Elm Ridge Capital up 25% in 2016[more]

    BlackRock's robot stock-pickers post record losses From Bloomberg.com: Like so many fund titans these days, Laurence D. Fink is betting on machines to turn around BlackRock Inc.'s beleaguered stock-picking business. Trouble is, they just might have made things worse. BlackRock

  5. Eurekahedge Hedge Fund Index up 1.01% in December (+4.48% YTD)[more]

    Hedge funds gained 1.01% during the month of December, with 2016 returns coming in at 4.48%. Meanwhile, underlying markets as represented by the MSCI AC World Index (Local) gained 2.38% in December with its 2016 returns coming in at 7.37%. North American equity markets traded higher in December as t