Corzine was responsible for MF Global collapse

by Idéfix Thu Apr 04, 2013 1:02 pm

Jon Corzine helped bring down MF Global with a dangerous trading strategy and inadequate risk controls, according to the court-appointed trustee to the collapsed brokerage’s bankruptcy.

Mr Corzine, the former chief executive of Goldman Sachs who ran MF Global from March 2010 to its failure in October 2011, embarked on a “risky business strategy” of betting on European government debt and ignored “glaring deficiencies” in controls, found Louis Freeh, the trustee.

Unusually for a chief executive, Mr Corzine executed some of the trades personally, “even placing trades in the middle of meetings”, Mr Freeh found.

As the European debt crisis worsened the company started to get margin calls, which threatened its liquidity, and it dipped into customer funds to help plug the hole.

“At one point, management even debated how aggressively the [broker-dealer], on an intraday basis, could borrow . . . customer funds [from its futures brokerage arm] required to be kept in secured and segregated accounts,” the report found.
Mr Freeh found that “inadequate controls also prevented the company from knowing, during the last week of its existence” that customer funds were being used to meet the liquidity needs of the broker-dealer and satisfy debt obligations from its UK division.

http://www.ft.com/cms/s/0/c53d6f24-9d33-11e2-a8db-00144feabdc0.html

by Hellsangel Thu Apr 04, 2013 1:13 pm

Did they just realize it?

Corzine was responsible for MF Global collapse

Corzine was responsible for MF Global collapse

Re: Corzine was responsible for MF Global collapse