Memo to Mr. Corzine – Now is the Time to Find a Good Defense Lawyer
This Forum regularly criticizes Republicans and Conservatives because, well because they so regularly do and say things that invites criticism. But this does not mean that liberals and Democrats do not engage in nefarious behavior and also earn well deserved criticism. Such is the case with a very liberal former Senator and Governor, Jon Corzine.
Mr. Corzine was a star at Goldman Sachs and left the firm with some degree of contention and a huge amount of money. He was elected Senator from
, then quit to be elected Governor of that state and was defeated by Chris Christie in his race for re-election. He then took over a small broker dealer, MF Global and decided to turn the first into another Goldman. He failed and the firm failed. New Jersey
Failing is not a crime in
, but in the securities business using customer funds to fund firm activities is forbidden. And in MF Global’s case, after the bankruptcy it turns out that over $1 billion of customer funds is missing. And Mr. Corzine has testified under oath that he does not know what happened to the funds. America
That position may change.
Jon S. Corzine gave "direct instructions" to move $200 million from an MF Global Holdings Ltd. account containing customer funds three days before the securities firm collapsed, according to an employee email reviewed by congressional investigators.
The Oct. 28 email was disclosed in a five-page memo released Friday afternoon by a House Financial Services subcommittee. The panel is investigating what caused an estimated $1.6 billion shortfall in customer funds at MF Global, which collapsed into bankruptcy Oct. 31.
To be fair, Mr. Corzine states that he did not order to transfer to take place from customer funds, and further investigation will have to take place
Customer accounts hold both firm money and customer money that isn't supposed to be touched under federal regulations. In testimony to lawmakers in December, Mr. Corzine, the former Goldman Sachs Group Inc. GS +1.15%chairman and New Jersey governor who was MF Global's CEO, said he never directed anyone to misuse customer funds.
"He stands by that testimony," a spokesman for Mr. Corzine said in a statement Friday. "He never directed Ms. O'Brien or anyone else regarding which account should be used to cure the overdrafts, and he never directed that customer funds should be used for that purpose," the statement said.
Mr. Corzine wasn't "informed that customer funds had been used for that purpose," the statement said.
But JPMC was concerned enough to ask for Mr. Corzine to certify that the funds being transferred were not from customer accounts. Which he never did. So this story will continue. As for Mr. Corzine, he was a very nice progressive voice in the Senate. He should have stayed there.