Published November 17, 2011
Former U.S. Senator and New Jersey Gov. Jon Corzine is a man known for taking risks. In 2007, he wasn't wearing a seatbelt when his chauffeur-driven SUV crashed on the New Jersey Turnpike doing 90 miles per hour. Corzine was severely injured.
Now, critics, are saying Corzine brought that same level of risk to his management of MF Global -- a company that crashed in spectacular fashion last month after it disclosed a $6 billion exposure to Eurozone nations like Italy and Portugal.
The former Goldman Sachs CEO’s penchant for juggling finances was once considered an asset. During the tumultuous early months of the Obama administration -- as it faced the immensity of recession -- Vice President Joe Biden hailed Corzine as a wise financial sage. At a campaign stop in October 2009 in support of Corzine's gubernatorial re-election bid, Biden recalled that time and Corzine's counsel.
"I literally picked up the phone and called Jon Corzine and said, 'Jon, what do you think we should do?'"
Just two years later, as the country struggles with recovery, Corzine sits atop the wreckage of MF Global. Its demise is the subject of at least six investigations, including by the FBI and Commodities Futures Trading Commission.
In addition to its bankruptcy filing and lay-offs of more than 1,000 employees, MF Global has told investigative authorities that $600 million of customer money is missing. The shortfall was withheld from investigating authorities for five days -- an apparent violation of the law, according to the head of the Commodities Futures Trading Commission.
"The statute is quite clear that customer money has to be segregated at all times of the day, at every moment of the day," CFTC Chairman Gary Gensler testified recently before a congressional committee. "They're in deficiency in their own words of their own email."
Not long after those remarks, Gensler recused himself from the investigation, admitting to a long relationship with Corzine. The two worked together at Goldman Sachs. Corzine helped arrange a speaking engagement for Gensler at Princeton University last year. Gensler also contributed $10,000 to the New Jersey Democratic Party in 2005.
On Thursday, as the bankruptcy court tried to sort through the debris of MF Global, Judge Martin Glenn ordered 23,000 of 38,000 personal accounts to be reassigned to other brokerage dealers. The move is worth about $520 million. The trustee in charge of the MF Global's liquidation had been cautious about moving too much too fast since so much money is still missing, but Glenn ruled the customers need access to their cash.
"It will take unfortunately some period of time for all of these accounting issues and other issues to be sorted out, and it would be inappropriate in the court's view to delay any distributions to customers," Glenn told the court, The Wall Street Journal reported.
Meanwhile, Corzine has been keeping a low profile since he resigned as CEO of MF Global earlier this month. Repeated attempts by Fox News to reach him at his New Jersey home and his New York City apartment have been unsuccessful. He has hired a prominent defense attorney.