Jon Corzine Pleads Ignorance To Questions About $1.2 Billion In Missing Customer Money

Jon Corzine: “I Simply Do Not Know Where The Money Is, Or Why The Accounts Have Not Been Reconciled To Date.” (Jon S. Corzine, Committee On Agriculture, U.S. House Of Representatives, Testimony, 12/8/11)

 JON CORZINE WAS OBAMA’S OWN “WALL STREET GUY” AND A MAJOR BUNDLER FOR HIS CAMPAIGN

President Obama: Corzine Is “Our Wall Street Guy.” “The rollout also provided a showcase for Corzine, the former Goldman Sachs CEO whom Obama referred to as ‘our Wall Street guy’ at a meeting of Democratic governors in Chicago on Friday.” (Claire Heininger, “Corzine Profile Rises In Obama Camp,” The Star-Ledger (NJ), 6/23/08)

President Obama: Corzine Helped Develop The Stimulus. “Jon Corzine wasn’t just the first governor to pass an economic recovery plan for his state; he was an ally with the Obama administration in helping us develop a national recovery plan.” (President Obama, “Remarks By The President At New Jersey Rally For Governor Jon Corzine,” Holmdel, NJ, 7/16/09)

• Watch Obama’s Comments Here

Jon Corzine Has Bundled Over $500,000 For Obama’s Reelection Campaign. (Center For Responsive Politics, Opensecrets.Org, Accessed 10/31/11)

• Corzine Played A “Central Role” In Obama’s Wall Street Fundraising Efforts. “His new legal troubles, sparked by the bankruptcy filing of his investment firm, MF Global, could complicate the president’s efforts to raise money from the financial community given Corzine’s central role in those efforts.” (Michael Isikoff, “Corzine, Top Obama Fundraiser, Under FBI Investigation,” MSNBC, 11/2/11)

 “Just Months Ago Corzine, A Democrat, Was Seen As A Possible Successor To Treasury Secretary Timothy Geithner.” (Peter Schroeder, “The Fall Of ‘Key Man’ Corzine,” The Hill, 12/6/11)

CORZINE SAYS HE WAS NOT INVOLVED IN THE DAY TO DAY OPERATIONS, SO WHAT WAS HE HIRED FOR?

Corzine: “I did not, however, generally involve myself in the mechanics of the clearing and settlement of trades, or in the movement of cash and collateral.” (Jon S. Corzine, Committee On Agriculture, U.S. House Of Representatives, Testimony, 12/8/11)

‘“MF Global Also Shows How This New Era Of Regulatory Power Puts A Premium On Political Connections.” (Editorial, “Mr. Corzine And His Regulators,” The Wall Street Journal, 12/1/11)

Corzine’s Firm Issued “Highly Unusual” Securities Which Promised To Pay  Higher Interest Rates If Corzine Was Appointed And Confirmed To A “Federal Position By The President Of The United States.” “Just a few months after that event, Corzine’s firm, MF Global, surprised many Wall Street investors by issuing highly unusual securities notes that appeared to highlight Corzine’s close relationship with the White House: The notes suggested that the former New Jersey governor might be in line for a top administration post should the president get re-elected. The notes promised to pay an extra 1% in interest rates in the event of ‘the departure of Mr. Corzine as our full time chief executive officer due to his appointment to a federal position by the President of the United States and his confirmation…by the United States Senate prior to July 1, 2013.’” (Michael Isikoff, “Corzine, Top Obama Fundraiser, Under FBI Investigation,” MSNBC, 11/2/11)

CORZINE USED HIS COZY RELATIONSHIP WITH REGULATORS TO DELAY A RULE WHICH ALLOWED HIM TO PUT CUSTOMER MONEY AT RISK

This Week The CFTC Approved The “MF Global Rule” Which Would Bar Wall Street “From Using Client Funds To Buy Foreign Sovereign Debt.” “Federal regulators approved tougher constraints on Wall Street risk-taking on Monday, adopting the ‘MF Global rule,’ named after the collapsed brokerage firm that is believed to have improperly used hundreds of millions of dollars of customer money. The new rule will limit how the brokerage industry can invest customer money, largely barring firms from using client funds to buy foreign sovereign debt. It also prevents a complex transaction that allowed MF Global, in essence, to borrow money from its own customers.” (Ben Protess, “Regulator Approves ‘MF Global Rule,’” The New York Times’ “Dealbook,” 12/5/11)

The CFTC Proposed The Rule In October 2010, But “Met A Powerful Roadblock In Mr. Corzine.” “Mr. Gensler’s agency initially proposed the crackdown in October 2010, and neared a vote on the plan this summer. But at the time, the agency met a powerful roadblock in Mr. Corzine, former Democratic governor of New Jersey.” (Ben Protess, “Regulator Approves ‘MF Global Rule,’” The New York Times’ “Dealbook,” 12/5/11)

Corzine’s “Aggressive Lobbying Campaign” Delayed The Rule From Taking Effect. “Mr. Corzine’s efforts culminated on July 20, as MF Global executives were on four different calls with the agency’s staff. Mr. Corzine personally participated in two of those calls. Ultimately, the aggressive lobbying campaign helped delay the proposal.” (Ben Protess, “Regulator Approves ‘MF Global Rule,’” The New York Times’ “Dealbook,” 12/5/11)

The CFTC’s Chairman Is Gary Gensler, Who Worked For Corzine When They Worked At Goldman Sachs. “Leading the government’s effort to curtail these arcane practices was Gary Gensler, the chairman of C.F.T.C., who had worked for Mr. Corzine at Goldman Sachs. Mr. Gensler pushed for the proposed change in October 2010, and planned to bring it to a vote this summer.” (Azam Ahmed And Ben Protess, “As Regulators Pressed Changes, Corzine Pushed Back, And Won,” The New York Times’ “Dealbook,” 11/3/11)

• “Both Men Are Active Democrats, And Served On Financial Panels Together Recently.” (Azam Ahmed And Ben Protess, “As Regulators Pressed Changes, Corzine Pushed Back, And Won,” The New York Times’ “Dealbook,” 11/3/11)
• “When Corzine Ran For New Jersey Governor, Gary Gensler Gave $10,000 To The State Democratic Party, Which Was Trying To Get Corzine Elected.” (Daniel Wagner, “MF Global’s Regulator Has Ties To Company’s Leader,” The Associated Press, 11/3/11)

NOW THOSE REGULATORS ARE SCRAMBLING TO FIND $1.2 BILLION

“Federal Regulators Are Investigating Whether MF Global, As Its Financial Condition Worsened, Tapped Client Funds That Were Supposed To Be Kept Safe In Strictly Segregated Accounts.” (Steve Karnowski, “Shock Waves From MF Global Collapse Felt On Farms,” The Associated Press, 12/4/11)

• “They’re Also Trying To Determine What Became Of The Money — It’s Not Clear If The Cash Is Parked Somewhere Or If It’s Gone.” (Steve Karnowski, “Shock Waves From MF Global Collapse Felt On Farms,” The Associated Press, 12/4/11)

Up To $1.2 Billion Is Missing From Customers Of Jon Corzine’s Firm. “The court-appointed trustee overseeing MF Global’s bankruptcy says up to $1.2 billion is missing from customer accounts, double what the firm had reported to regulators last month.”  (Marcy Gordon, “MF Global Trustee Says $1.2B Or More Missing,”The Associated Press, 11/21/11)

• “The Havoc Wreaked” By The Failure Of Jon Corzine’s MF Global Is Rippling Through The Farm Belt. “The havoc wreaked by MF Global’s bankruptcy filing has been felt not just by Wall Street investors and traders, but also by wheat and corn growers, cattle ranchers and pig farmers. Dotting the farm belt, many who used the commodities market to protect against price swings are finding their money locked up and their hedges unwound due to the firm’s downfall.” (Jerry A Dicolo And Dan Strumpf, “MF Global Collapse Felt In Farm Country,” The Wall Street Journal, 12/7/11)
• Farmers, Ranchers And Rural Businesses Were The Hardest Hit By MF Global’s Failure And The Investigations Following The Bankruptcy. “Farmers, ranchers and rural businesses such as grain elevators and feed mills were among the hardest hit when they were cut off from the cash in their hedging accounts at MF Global, which sought bankruptcy protection in October after making a disastrous bet on European government debt. The number of people harmed and the extent of their losses isn’t clear yet.” (Steve Karnowski, “Shock Waves From MF Global Collapse Felt On Farms,” The Associated Press, 12/4/11)

If The Money Was Accidentally Put In The Wrong Account, It Would Already Have Been Discovered. “’If this had been simply an accident where the money had been put in a wrong account, that should have been discovered by now,’ said Ed Ketz, an accounting professor at Penn State University.” (James O’Toole, “The MF Global  Money Chase,” CNN Money, 12/6/11)

• Which Means Either MF Global Had “Extremely Poor Accounting Controls” Or “Unlawfully Appropriated” The Money. “He said that leaves two possibilities: Either MF Global had ‘extremely poor accounting controls’ and is unable to track down the money, or the funds were unlawfully appropriated.” (James O’Toole, “The MF Global  Money Chase,” CNN Money, 12/6/11)

• “In The Latter Scenario, Staff From MF Global Could Potentially Face Criminal Charges, And The FBI Is Now Investigating The Case.” (James O’Toole, “The MF Global  Money Chase,” CNN Money, 12/6/11)

CFTC Commissioner Says Corzine’s Firms’ “Books Are A Disaster…. We’re Trying To Figure Out What Numbers Are The Real Numbers.” “‘Their books are a disaster,’ Scott O’Malia, a commissioner at the Commodity Futures Trading Commission, one of the regulators leading a hunt that has stretched 10 days so far, said in an interview. ‘We’re trying to figure out what numbers are the real numbers.’” (Scott Patterson And Aaron Lucchetti, “Inside The Hunt For MF Global Cash,” The Wall Street Journal, 11/11/11)

Routine Financial Information “Took Hours To Produce” When It “Should Be Accessible Instantly.” “An executive at another company that considered making a bid for parts of MF Global as it was going downhill said officials at his firm ‘couldn’t get a good sense of what was on the balance sheet.’ Routine information about assets and positions on MF Global’s books took hours to produce, the executive said. Such information should be accessible instantly, he added.” (Scott Patterson And Aaron Lucchetti, “Inside The Hunt For MF Global Cash,” The Wall Street Journal, 11/11/11)

CFTC Commissioner Says Corzine’s Firm “Haven’t Been Cooperative.” “CFTC Commissioner Bart Chilton disputed how much help regulators are getting from MF Global. Efforts to get information from the firm since the bankruptcy filing have been ‘difficult and disappointing,’ he said. ‘I think they haven’t been cooperative,’ Mr. Chilton added in an interview.” (Scott Patterson And Aaron Lucchetti, “Inside The Hunt For MF Global Cash,” The Wall Street Journal, 11/11/11)

• “He Compared Efforts To Locate The Missing Money To ‘A Magical Mystery Tour.’” (Scott Patterson And Aaron Lucchetti, “Inside The Hunt For MF Global Cash,” The Wall Street Journal, 11/11/11)

“Former New Jersey Governor Jon Corzine’s Former Brokerage Firm Was Engaged In Activity That Was ‘Either Nefarious Or Illegal,’ Said A U.S. Futures Regulator On Tuesday.” (Tim Mak, “Regulator: Corzine Firm ‘Nefarious,’” Politico, 11/15/11)

• Bart Chilton, CFTC Commissioner: “The money should be there, it’s not. That money should be sacrosanct. It’s really troubling.” (Tim Mak, “Regulator: Corzine Firm ‘Nefarious,’” Politico, 11/15/11)