POLITICS: PennAve

Feds sue former NJ Gov. Jon Corzine over MF Global collapse

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Beltway Confidential,Brian Hughes,Goldman Sachs,New Jersey,PennAve

The Commodity Futures Trading Commission on Thursday sued Jon Corzine, the former New Jersey governor and chief executive of MF Global, saying he effectively drove the investment firm into one of the largest bankruptcies in U.S. history.

“Turning a profit is not the only job of the person at the top of a CFTC-regulated firm,” CFTC Enforcement Director David Meister said in announcing the lawsuit. “Particularly in times of crisis, the person in control, like the CEO here, must do what’s necessary to prevent unlawful uses of customer money, so that customers’ money is still there if and when the music stops.”

MF Global agreed to pay a $100 million fine, regulators said. Federal officials are seeking to ban Corzine from all futures trading. The former New Jersey governor and senator — and chairman and CEO of Goldman Sachs — ran MF Global as $1.2 billion of customers’ money mysteriously disappeared.

Corzine contends that he was an unknowing victim of circumstances, completely in the dark about illicit operations performed at lower levels of the company.

“The CFTC apparently intends to bring what would be an unprecedented and meritless civil enforcement action against Mr. Corzine,” Steven Goldberg, a spokesman for the former governor, said before the civil charges were announced. “The CFTC has not alleged that Mr. Corzine engaged in any wrongdoing or directed anyone to engage in any wrongdoing with regard to customer funds.”

 

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