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Entries in Jon Corzine (14)

Tuesday
Feb282012

Criminal Charges Possible in Corzine Company Probe

Chris Maddaloni/CQ-Roll Call(WASHINGTON) -- A federal grand jury has subpoenaed "information and witnesses" on MF Global, the bankrupt brokerage once run by former New Jersey governor Jon Corzine, to determine how $1.6 billion in client money went missing when the firm collapsed in late 2011.

The CME Group, the exchange operator for MF Global and other commodity brokerages, said in its annual report to the SEC Tuesday that it had received two subpoenas in early November, just days after MF Global declared bankruptcy.

The annual report said that CME had been asked "to produce information and witnesses in connection with authorities' investigation of the matter" by a grand jury in the Northern District of Illinois and by the Commodities Futures Trading Corporation, the U.S. agency that regulates futures and options markets. According to CME, the trustee seeking to recover funds for MF Global investors has also made a "document request" in January. CME, which owns the Chicago  Mercantile Exchange and the New York Mercantile Exchange, did not respond to a request for comment.

Officials say the missing funds were apparently used to cover losses as the company began to teeter in 2011. Client funds are supposed to be kept segregated from company money.

Corzine, who has not been charged with wrongdoing, was at the helm of the firm when it declared Chapter 11 on Oct. 31, the eighth-largest bankruptcy filing in U.S. history. Regulators initially thought $600 million in customer funds had gone missing, but later upped their estimate to more than $1 billion. Only 60 percent of customer funds could be found.

According to the February issue of Vanity Fair, Corzine, who reportedly made over $16 million between 2010 and 2011, was shopping for a chateau in France with his wife two weeks before MF Global filed for bankruptcy.

Testifying before the House Agriculture Committee in December, Corzine said he had no idea where the $1.2 billion in missing customer funds had gone and that investigators are still untangling what happened.

Later in the month, he appeared before the Senate Agriculture Committee to deny any wrongdoing. "I never directed anyone at MF Global to misuse customer funds. I never intended to, and as far as I'm concerned, I never gave instructions that anyone could misconstrue," said Corzine.

Corzine, a Democrat, served as U.S. senator from New Jersey from 2001 to 2006. He was elected governor of New Jersey in November 2005. He became CEO of MF Global in March 2010 after losing his reelection bid to Chris Christie. Before entering politics he had amassed a fortune as CEO of Goldman Sachs. His personal wealth was estimated at $100 million in 2010.

A spokesperson for Jon Corzine declined an earlier ABC News request for comment on the MF Global collapse.

Copyright 2012 ABC News Radio

Friday
Feb102012

MF Global Trustee: At Least $1.6 Billion Missing

Stephen Yang/Bloomberg via Getty Images(NEW YORK) -- Even more money is now thought to be missing from the firm run by former New Jersey Gov. Jon Corzine.

The trustee overseeing MF Global's liquidation found another $400 million missing from customer accounts, bringing the total to at least $1.6 billion.

Trustee James Giddens made clear the money is unlikely to be paid back any time soon.  And he said the amount could change again as he continues to sort through the bankrupt firm.

Copyright 2012 ABC News Radio

Monday
Jan092012

Farmers Sue Jon Corzine over Missing Millions

Chris Maddaloni/CQ-Roll Call(WASHINGTON) -- Montana farmers have filed a class-action suit against former New Jersey Governor Jon Corzine, charging that the failed financial firm run by Corzine stole millions from their accounts to pay off its spiraling debts, and that Corzine's "single-minded obsession" with making MF Global a big player on Wall Street led to the firm's collapse.

MF Global's clients included 38,000 wheat farmers, cattle ranchers and others who "hedged" their crop prices by placing millions in MF Global accounts. Those accounts were supposed to be "segregated and secure," according to the federal suit, meaning MF Global could not draw on those funds.

The lawsuit, filed on behalf of all 38,000 customers, alleges that when MF Global made a series of bad investments -- notably in European debt -- it began "siphoning funds withdrawn from segregated client accounts" to cover its debts.

"This is a suit by the real victims of MF Global," said plaintiffs' attorney Mark Baker of the law firm Anderson, Baker & Swanson. "The missing funds were not investments in MF Global, or loans to MF Global, but rather the customer's own money as collateral to guaranty their contracts. They were not to be used by others -- let alone their own broker -- to speculate on risky and exotic securities."

Corzine was at the helm of the firm when it declared Chapter 11 on Oct. 31, the eighth-largest bankruptcy filing in U.S. history. Regulators initially thought $600 million in customer funds had gone missing, but later upped their estimate to $1.2 billion. Only 60 percent of customer funds could be found.

According to the February issue of Vanity Fair, Corzine, who reportedly made over $16 million between 2010 and 2011, was shopping for a chateau in France with his wife two weeks before MF Global filed for bankruptcy.

Testifying before the House Agriculture Committee in December, Corzine said he had no idea where the $1.2 billion in missing customer funds had gone and that investigators are still untangling what happened.

Later in the month, he appeared before the Senate Agriculture Committee to deny any wrongdoing. "I never directed anyone at MF Global to misuse customer funds. I never intended to, and as far as I'm concerned, I never gave instructions that anyone could misconstrue," said Corzine.

The lead plaintiff in the Montana suit, Martin Klinker, told ABC News that two of his accounts totaling nearly $600,000 are unaccounted for, leaving him with an uncertain future for his grain and cattle farm. "I have a tremendous amount of uncertainty. It's consumed my life," he said. Klinker runs his farm in Fairfield, Montana, with the help of his wife and four children.

Plaintiffs' attorney Mark Molumphy of the law firm Cotchett, Pitre & McCarthy told ABC News that if the farmers lose their money and crops are affected, consumers will feel it at the grocery store. "There could be less product and higher prices in the long term," said Molumphy.

Plaintiffs cannot sue MF Global while it is under bankruptcy protection, but can sue the company's former executives, including Corzine. The Montana suit names Corzine and other former top MF Global executives, as well as the accounting firm PricewaterhouseCoopers and JPMorgan Chase, the bank that held MF Global's funds. Other lawsuits filed on behalf of MF Global investors have also named Corzine and other members of MF Global's former management team.

Corzine, a Democrat, served as U.S. senator from New Jersey from 2001 to 2006. He was elected governor of New Jersey in November 2005. He became CEO of MF Global in March 2010 after losing his reelection bid to Chris Christie. Before entering politics he had amassed a fortune as CEO of Goldman Sachs. His personal wealth was estimated at $100 million in 2010.

A spokesperson for Jon Corzine declined to comment. PricewaterhouseCoopers and JPMorgan Chase also declined comment.

Copyright 2012 ABC News Radio

Friday
Dec232011

Obama To Return Corzine's Campaign Contributions

Chris Maddaloni/CQ-Roll Call(WASHINGTON) – President Obama’s re-election campaign has decided to return campaign contributions from Jon Corzine, former chairman and CEO of MF Global Holdings Ltd, Bloomberg reports.

According to an anonymous Democratic official, the money was refunded out of abundance of caution, following the firm’s recent collapse and declaration of bankruptcy.

The president had been criticized by Republicans for originally keeping the contributions from the former New Jersey governor.
 
Both Corzine and his wife had each contributed $30,800 to the DNC and $5,000 to Obama’s campaign, the maximum amounts that are allowed to be donated by individuals.

Copyright 2011 ABC News Radio

Wednesday
Dec142011

Jon Corzine Aware of MF Global Money Transfer, Says Senate Witness

Chris Maddaloni/CQ-Roll Call(WASHINGTON) -- Sen. Pat Roberts, R-Kan., said a revelation from a Senate witness on Tuesday "tossed a bomb" near the end of the day-long hearing about the $1.2 billion in missing client money from bankrupt company MF Global.

The chairman of the CME Group, Terry Duffy, told the Senate Agriculture, Nutrition and Forestry Committee investigating MF Global that former CEO Jon Corzine was aware of loans that may have used customer money, contradicting Corzine's two testimonies to Congress and authorities investigating missing clients' funds.

Senators drilled Corzine, who testifed before Congress again on Tuesday, as well as the chief financial officer and chief operating officer of the company.

Duffy said he learned on Saturday from lawyers of CME Group, the world's largest derivatives exchange, that Corzine was aware of a $175 million loan transfer to one of MF Global's European affiliates that may have involved client money.

"Somebody went and violated rules of CME and the government and transferred out customer money into a broker dealer account," Duffy told Congress.  He said he informed the authorities, including the Securities and Exchange Commission, though he did not know the full details to describe how Corzine knew of the transfer.

Corzine, who resigned as MF Global's CEO on Nov. 3, said the committee turned down his request to testify voluntarily in January.  The former New Jersey governor said he had limited access to relevant documents, including internal communications and account statements, and his own notes.

"I had hoped that, by that time, I would have obtained and reviewed relevant records so that I could be more helpful to the committee," Corzine said earlier.

MF Global's chief financial officer, Henri Steenkamp, and chief operating officer, Bradley Abelow, earlier testified that they did not know where the missing client money is located.  The two executives and Corzine said they did not authorize any transfers of customer money.

Copyright 2011 ABC News Radio

Tuesday
Dec132011

Former MF Global CEO Jon Corzine to Testify Again

Chris Maddaloni/CQ-Roll Call(WASHINGTON) -- Former MF Global CEO Jon Corzine is scheduled to testify before Congress again on Tuesday, this time before the Senate Agriculture, Nutrition and Forestry Committee, but the whereabouts of about $1.2 billion in client money is still unknown.

The bankruptcy of the commodities trading firm on Oct. 31 was the eighth largest in U.S. history.

Corzine, New Jersey's former Democratic senator, testified before the House Agriculture Committee last Thursday, saying he was at a loss as to what happened to the missing money.

"I simply do not know where the money is, or why the accounts have not been reconciled to date," Corzine testified.  "My understanding is that our books and records were reflecting the chaos that occurred in the last two or three days as the firm was under severe pressure and had lost the confidence of the marketplace."

The New York Times, however, reported that the former New Jersey governor and Goldman Sachs CEO "played a much larger, hands-on role in the firm's high-stakes risk-taking than has previously been known" and that Corzine, who became chief executive of MF Global in March 2010 and resigned on Nov. 4, was "convinced that he could quickly turn the money-losing firm into a miniature Goldman Sachs."

According to the Times, Corzine "compulsively traded for the firm on his BlackBerry during meetings, sometimes dashing out to check on the markets."  In a move considered out of the ordinary for a chief executive, Corzine "became a core member of the group that traded using the firm's money.  His profits and losses appeared on a separate line in documents with his initials: JSC."

Steven Goldberg, an attorney for Corzine, declined to comment.

Included in the witness list for Tuesday's hearing are representatives from the farming industry and commodities trading sector.

In addition to Corzine, two MF Global executives, Henri Steenkamp, chief financial officer, and Bradley Abelow, president and chief operating officer, will also testify on Tuesday.

Copyright 2011 ABC News Radio

Thursday
Dec082011

Corzine Can't Explain Missing $1.2B

Chris Maddaloni/CQ-Roll Call(WASHINGTON) – An estimated $1.2 billion of customers’ money is missing after investment banking giant MF Global declared the eighth-largest bankruptcy in U.S. history. Former CEO Jon Corzine -- the former Governor of New Jersey and a man once rumored to be on President Obama's short-list for Treasury Secretary -- testified today he “simply [does] not know where the money is.”

Corzine, who resigned as CEO three days after MF Global declared bankruptcy in October, told a congressional committee Thursday that he was “stunned” and “devastated” to find out that “millions of dollars of client money” was missing.

“I simply do not know where the money is, or why the accounts have not been reconciled to date,” said Corzine, who President Obama called "our Wall Street guy" when he campaigned for Corzine's failed reelection bid in New Jersey. “My understanding is that our books and records were reflecting the chaos that occurred in the last two or three days as the firm was under severe pressure and had lost the confidence of the marketplace.”

Corzine was widely expected to invoke the 5th Amendment to avoid testifying at Thursday’s House Agricultural Committee hearing, but as a former senator, he said he understood the importance of such hearings. His testimony marks the first time in a century that Congress has subpoenaed a former senator to testify, according to the Senate historian.

Because he said he has had “limited access” to company documents since resigning Nov. 3, Corzine did not offer details of how the $1.2 billion went missing.

“There are, Mr. Chairman, many transactions that occurred in those last chaotic days,” Corzine said in response to a question from committee Chairman Frank Lucas, R-Okla. “I am not aware of all those nor do I have the information to be able to look at all those transactions. As a consequence, it would be very hard for me to speculate why or where that shortfall took place.”

While Corzine offered little insight into where the money disappeared, James Kobak, the lead council on MF Global’s liquidation process, said he expects that, unless the missing money is found, the firm’s 38,000 customers will only be able to recoup about 70 percent of their money, which should be paid out in two to four weeks.

Kobak said the $1.2 billion is hard to find because the firm’s records are, “a mess.”

The firm sold $10 billion worth of assets leading up to its declaring bankruptcy, Corzine testified.

Copyright 2011 ABC News Radio

Thursday
Dec082011

Jon Corzine to Testify on MF Global: 'I Don't Know Where the Money Is'

Stephen Yang/Bloomberg via Getty Images(WASHINGTON) -- Former New Jersey Gov. Jon Corzine plans to tell Congressmen on Thursday he, "simply [does] not know where the money is" when he testifies before a House Committee investigating the bankruptcy of the financial firm he ran.

As much as a billion dollars in client funds are unaccounted for following the collapse of MF Global, and in prepared remarks, Corzine says he was "stunned" to learn it went missing.

He says he accepts responsibility for the trades that lead to the firm's demise and "sincerely apologize[s], both personally and on behalf of the company, to our customers, our employees and our investors, who are bearing the brunt of the impact of the firm’s bankruptcy."

Corzine had been expected to plead the Fifth Amendment, but in his remarks, he says he'll answer questions to the best of his ability.

However, the former chairman and CEO of MF Global cautions that "since my departure from MF Global on November 3, 2011, I have had limited access to many relevant documents, including internal communications and account statements, and even my own notes, all of which are essential to my being able to testify accurately about the chaotic, sleepless nights preceding the declaration of bankruptcy."

"While I intend to be responsive to the best of my ability today, without adequate time and materials to prepare, I may be unable to respond to various questions members might pose," he will go on to say.

[CLICK HERE TO READ CORZINE'S PREPARED STATEMENT]

Copyright 2011 ABC News Radio

Friday
Nov112011

MF Global Lays Off 1,066 Employees

Daniel Acker/Bloomberg News edit Delete caption(NEW YORK) -- MF Global officially laid off 1,066 employees on Friday. The news comes almost two weeks after Jon Corzine, the former governor of New Jersey, resigned as chairman and CEO of MF Global after it filed for Chapter 11 bankruptcy protection.

The company plans to pay staff through Nov. 15, and cover health insurance through the end of the month. They will not, however, be paid severance, according to a source close to the firm.

Trustee James Giddens distributed a statement Friday announcing the dismissal of the unit’s 1,066 employees.

Copyright 2011 ABC News Radio

Friday
Nov042011

Jon Corzine Steps Down as CEO of MF Global

Stephen Yang/Bloomberg via Getty Images(NEW YORK) -- Jon Corzine, the former governor of New Jersey, has resigned from his posts as the chairman and CEO of MF Global, the embattled securities firm announced Friday.

According to the firm, he will not be seeking a severance package.

Corzine's resignation comes four days after MF Global filed for Chapter 11 bankruptcy protection.  The company's collapse is mostly attributed to its exposure of $6 billion to European sovereign debt out of $41 billion in total assets, according to Janney Capital Markets.

Copyright 2011 ABC News Radio







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