Jon Corzine Slammed in Report on Collapse of MF Global

Ex-Senator Was 'Negligent' in Failure: Report

Harsh Verdict: Jon Corzine was blamed for the failure of MF Global Holdings in a scathing 124-page report.
getty images
Harsh Verdict: Jon Corzine was blamed for the failure of MF Global Holdings in a scathing 124-page report.

By Reuters

Published April 04, 2013.
  • Print
  • Share Share
  • Single Page

The “negligent conduct” of Jon Corzine and other officers of the MF Global Holdings Ltd brokerage contributed to the firm’s dramatic collapse in 2011, according to a report by the bankruptcy trustee.

The report by former FBI director Louis Freeh said the failure of MF Global’s officers contributed to losses of as much as $2.1 billion and adds to the growing number of reports and investigations pointing to their liability.

Freeh has prepared a lawsuit against former executives for breaches of fiduciary duty, but had not filed it pending the outcome of talks with a mediator appointed in a separate securities class action, according to the report.

Freeh’s 124-page document blamed the collapse on “the risky business strategy engineered and executed by Corzine and other officers and their failure to improve the company’s inadequate systems.”

While the report was sharply critical of Corzine’s conduct, it did not focus on one of the biggest mysteries of the MF Global collapse: the misappropriation of funds from customer trading accounts.

A spokesman for Corzine dismissed the report as “Monday morning quarterbacking” that ignores that Corzine took over a money-losing business and with board oversight began to improve its performance.

MF Global collapsed into bankruptcy in October 2011, less than two years after Corzine, a former New Jersey governor and Goldman Sachs chief, became CEO.

Corzine sought to transform the business into a global investment bank and pursued an aggressive strategy of betting on the sovereign debt of European countries such as Ireland and Portugal.

As Europe’s economies weakened in the middle of 2011, MF Global was required to meet margin calls on its trades. Regulators have found that there was an unprecedented use of money in customer trading accounts to cover liquidity gaps as the company teetered on the brink.

Freeh’s report found that reporting systems were lacking and failed to alert the company that customer money was being used.

“These glaring deficiencies were long known to Corzine and management, yet they failed to implement sufficient corrective measures promptly,” Freeh wrote in the report.


The Jewish Daily Forward welcomes reader comments in order to promote thoughtful discussion on issues of importance to the Jewish community. In the interest of maintaining a civil forum, The Jewish Daily Forwardrequires that all commenters be appropriately respectful toward our writers, other commenters and the subjects of the articles. Vigorous debate and reasoned critique are welcome; name-calling and personal invective are not. While we generally do not seek to edit or actively moderate comments, our spam filter prevents most links and certain key words from being posted and The Jewish Daily Forward reserves the right to remove comments for any reason.





Find us on Facebook!
  • "I fear that we are witnessing the end of politics in the Israeli-Palestinian conflict. I see no possibility for resolution right now. I look into the future and see only a void." What do you think?
  • Not a gazillionaire? Take the "poor door."
  • "We will do what we must to protect our people. We have that right. We are not less deserving of life and quiet than anyone else. No more apologies."
  • "Woody Allen should have quit while he was ahead." Ezra Glinter's review of "Magic in the Moonlight": http://jd.fo/f4Q1Q
  • Jon Stewart responds to his critics: “Look, obviously there are many strong opinions on this. But just merely mentioning Israel or questioning in any way the effectiveness or humanity of Israel’s policies is not the same thing as being pro-Hamas.”
  • "My bat mitzvah party took place in our living room. There were only a few Jewish kids there, and only one from my Sunday school class. She sat in the corner, wearing the right clothes, asking her mom when they could go." The latest in our Promised Lands series — what state should we visit next?
  • Former Israeli National Security Advisor Yaakov Amidror: “A cease-fire will mean that anytime Hamas wants to fight it can. Occupation of Gaza will bring longer-term quiet, but the price will be very high.” What do you think?
  • Should couples sign a pre-pregnancy contract, outlining how caring for the infant will be equally divided between the two parties involved? Just think of it as a ketubah for expectant parents:
  • Many #Israelis can't make it to bomb shelters in time. One of them is Amos Oz.
  • According to Israeli professor Mordechai Kedar, “the only thing that can deter terrorists, like those who kidnapped the children and killed them, is the knowledge that their sister or their mother will be raped."
  • Why does ultra-Orthodox group Agudath Israel of America receive its largest donation from the majority owners of Walmart? Find out here: http://jd.fo/q4XfI
  • Woody Allen on the situation in #Gaza: It's “a terrible, tragic thing. Innocent lives are lost left and right, and it’s a horrible situation that eventually has to right itself.”
  • "Mark your calendars: It was on Sunday, July 20, that the momentum turned against Israel." J.J. Goldberg's latest analysis on Israel's ground operation in Gaza:
  • What do you think?
  • "To everyone who is reading this article and saying, “Yes, but… Hamas,” I would ask you to just stop with the “buts.” Take a single moment and allow yourself to feel this tremendous loss. Lay down your arms and grieve for the children of Gaza."
  • from-cache

Would you like to receive updates about new stories?




















We will not share your e-mail address or other personal information.

Already subscribed? Manage your subscription.