CFTC sues Corzine over MF Global collapse
US regulators Thursday sued former US senator and New Jersey governor Jon Corzine over misuse of $1 billion in client funds in the collapse of brokerage MF Global.
- Published: 28/06/2013 at 02:49 AM
- Newspaper section: news
US regulators sued former US senator and New Jersey governor Jon Corzine, pictured December 15, 2012, over misuse of $1 billion in client funds in the collapse of brokerage MF Global.
The Commodities Futures Trading Commission sought restitution and a ban from securities markets against Corzine, a one-time Wall Street high flyer brought to earth when his company fumbled on risky bets on European sovereign debt in 2011.
The CFTC sued MF Global's assistant treasurer for raiding customer accounts to keep the company afloat.
It also sued and reached a settlement with MF Global itself, fining it $100 million over the same charges, the money to be paid from whatever is left after clients are paid for their losses in the collapse.
The CFTC charged that Corzine was aware of the illegal use of funds from customer accounts to balance the brokerage's own books and pay creditors.
"In the last week of October 2011, with virtually no other sources of immediate cash to turn to, the firm repeatedly and unlawfully used customer funds for firm needs, ultimately leaving it nearly $1 billion short of customer funds," the regulator said in a statement.
"In that last week, Corzine is alleged to have been aware of the firm's true low-cash balance, even as he directed the firm to continue paying large obligations without inquiring how the firm could come up with the money to do so."
About the author
- Writer: AFP
- Position: News agency