Jon Corzine. Former Chairman of Goldman-Sachs, Former US Senator, Former New Jersey Governor and Former Head of MF Global. There are very few people who fit the title of “Washington Insider” better. Now it seems as if Corzine is heading to the Hot Seat.
Jon Corzine was called for questioning before Congress on the bankruptcy of MF Global, which he oversaw until it entered bankruptcy in October. He seemed a bit confused and puzzled as he spoke in a grainy voice to the House Agricultural Committee about the implosion of the firm. He stated “I Simply Do Not Know” where 1.2 billion dollars in clients money disappeared to. He tried to paint a picture of a firm in chaos leading up to the bankruptcy filing but expressed some level of optimism that client’s csh would turn up.
Corzine could wind up being personally liable for client losses if it turns out the firm acted irresponsibly with their funds. Under SEC regulations, the CEO of a financial firm must personally certify that the company financials are correct or possibly face civil suits against their personal assets.
MF Global was invested heavily in European Sovereign Debt, investing heavily in countries such as Italy and Spain. Corzine claimed that it wasn’t the firm’s European investments that caused the collapse but a strong turn around in consumer confidence experienced in late October.
Corzine spent months on Capitol Hill since taking over MF Global. He lobbied heavily against regulations which would have limited the firm’s ability to engage in high-risk investments. He also wanted to avoid new reporting requirements which may have brought about the demise of MF Global even earlier.
Do you think Corzine should be held personally responsible for the collapse of MF Global?