Jon Corzine, the former CEO of Goldman Sachs and a former Democratic governor and senator from New Jersey, could be in very big trouble. And if reports such as these prove true, he damn well ought to be:
WASHINGTON (AP) — The court-appointed trustee overseeing MF Global’s bankruptcy says up to $1.2 billion is missing from customer accounts, double what the firm had reported to regulators last month.
Regulators are investigating whether MF Global tapped money from clients’ accounts as its own financial condition worsened. That would be a violation of securities rules. The FBI is investigating whether New York-based MF Global violated any criminal laws.
Corzine recently resigned as head of MF Global.
It is illegal for a brokerage to use clients’ money as its own. If the facts are as alleged, the missing $1.26 billion — still a preliminary figure, the court trustee has stressed — was in effect stolen from MF Global customers in order to cover for the company’s bad investments. It’s hard to believe that a person of Corzine’s experience and position would engage in such a scheme, but at the moment, there may also be 1,200,000,000 reasons to think otherwise.
If true, it also feeds the narrative that corruption on Wall Street has become endemic.
– Jay Bookman