Jon Corzine's troubles build after MF Global bankruptcy
As MF Global's bankruptcy recedes further into the past its problems are not going away.
Since the firm, which was led by former Goldman Sachs chairman and U.S. Sen. Jon Corzine, filed for bankruptcy protection on Halloween, each passing week has brought forward troubling new revelations.
The firm went down after making a series of big bets on European sovereign debt. The Wall Street Journal reports Tuesday that MF Global's risk officer raised concerns about these bets with Corzine and was rebuffed. According to the story, Corzine responded that "the likely profit was worth the risks."
The company's more immediate problem, though, is the hundreds of millions of dollars of missing customer money. A shortfall was revealed in the immediate aftermath of the bankruptcy, along with allegations that the company had misallocated the money in a bid to keep MF Global afloat. In late November, the trustee overseeing the bankruptcy raised the amount missing, from about $600 million to about $1.2 billion.
At least one congressional committee has voted to subpoena Corzine, to force him to testify about where the money went.
Meanwhile, former employees at MF Global, who were almost all laid off, are now suing Corzine and the company's board, saying that they destroyed the careers and retirement savings of MF Global's staff.
The whole saga of Corzine's rise and fall -- from the loftiest heights of Wall Street, to public disgrace -- is told in a long Newsweek story this week. The story says that Corzine continues to return to his old barber on Wall Street, but has to hide himself on the way in and out:
While preparing to defend himself, Corzine continues to pay regular visits to Wall Street — if only to sit in the throne-like chair at Esquires, as he has since the days when he gazed into the barbershop mirror and saw the CEO of Goldman Sachs reflected back at him. It bears noting that J.P. Morgan once kept an apartment on the uppermost floor of the 32-story building where Esquires is located, directly across the street from the New York Stock Exchange, which the tycoon singlehandedly rescued from itself during the Panic of 1907. For all his many virtues, Corzine had become the latest Wall Street sinner, the latest to have been blind to the lessons of the past.
-- Nathaniel Popper
Photo: MF Global CEO Jon Corzine. Credit: Rich Schultz / Associated Press