Here’s One Reason Why MF Global Went Down; They Lost Track of a $659 Million Account

Maybe CEO Jon Corzine Was Not Master of the Universe

As regulators took over control of failed Broker Dealer MF Global one of the things they discovered was that they could not account for all of the money the firm was supposed to have.  Now they may have found it.

MF Global Holdings Ltd. has found $659 million in customer accounts it hadn't been able to locate while scrambling to avoid bankruptcy, according to a person familiar with the matter.

The firm, which collapsed Monday amid concerns over exposure to European government debt, was informed in recent days that the funds were in one of its accounts at J.P. Morgan Chase & Co., the person said

Now all of us lose track of money every now and then.  The bank account doesn’t balance.  That $20 bill we thought we had turns up in the washing machine three weeks later.  Happens all the time.

To lose track of $659 million takes real skill.  Only an experienced Wall Street executive could do that.  Lesser men or women would know where an account with $659 million was.  But Jon Corzine, former head of Goldman Sachs, former Democratic U. S. Senator, former Democratic Governor of New Jersey, and an incredibly wealthy man lost track of $659 million.  Isn’t this the type of people we want in charge of the world’s greatest and largest financial system.

People like Mr. Corzine have been destroying financial markets ever since financial markets have existed.  In the MF Global case the world is fortunate in that Mr. Corzine’s firm, MF Global was not large enough to cause a world wide recession.  Yes, everyone was lucky this time.  Next time, no guarantees.

As for Mr. Corzine

"I feel great sadness for what has transpired at MF Global and the impact it has had on the firm's clients, employees and many others," said a statement from Mr. Corzine, who hired prominent Dechert LLP defense lawyer Andrew Levander this past week.

Let’s hope he needs him.

Update:  Regulators are now saying that the newly found money is not missing customer money.

The missing customer money at MF Global is still missing.

On Friday, funds from the bankrupt brokerage firm suddenly surfaced at JPMorgan Chase. Washington and Wall Street, for a moment, were hopeful it was the money they had been searching for all week.

But then, just as quickly, nearly everyone agreed it was not the missing money, and the hunt was on again.

While MF Global has more than $2 billion in accounts at JPMorgan, regulators had previously accounted for those funds, according to people briefed on the matter who were not authorized to speak publicly. Federal officials estimate that roughly $600 million has been misplaced or misused or has disappeared altogether, two of the people said.

As for Mr. Corzine

“I feel great sadness for what has transpired at MF Global and the impact it has had on the firm’s clients, employees and many others,” Mr. Corzine, 64, said in a statement. “I intend to continue to assist the company and its board in their efforts to respond to regulatory inquiries and issues related to the disposition of the firm’s assets.”

to which the proper response would have to be "thanks anyway Mr. Corzine, but  you have done enough for MF Global already".