In the most damning evidence thus far of malfeasance at MF Global, Bloomberg reports that former New Jersey Senator and Governor Jon Corzine, while CEO of the company, personally ordered $200 million in investor funds transferred to cover an overdrawn account at JPMorgan Chase. Bloomberg has the goods in the form of a memo from one of MF Global’s treasurers:
Edith O’Brien, a treasurer for the firm, said in an e-mail quoted in the memo that the transfer was “Per JC’s direct instructions,” according to a copy of the memo obtained by Bloomberg News. The e-mail, dated Oct. 28, was sent three days before the company collapsed, the memo says. The memo does not indicate whether that phrase was the full text of the e-mail or an excerpt.
O’Brien’s internal e-mail was sent as the New York-based broker found intraday credit lines limited by JPMorgan, the firm’s clearing bank as well as one of its custodian banks for segregated customer funds, according to the memo, which was prepared for a March 28 House Financial Services subcommittee hearing on the firm’s collapse. O’Brien is scheduled to testify at the hearing after being subpoenaed this week.
“Over the course of that week, MF Global (MFGLQ)’s financial position deteriorated, but the firm represented to its regulators and self-regulatory organizations that its customers’ segregated funds were safe,” said the memo, written by Financial Services Committee staff and sent to lawmakers.
The real damaging piece is that JPMorgan sought verification that the $200 million wasn’t coming from customer funds. They drafted a letter to ensure that MF Global stood in compliance with securities rules. And MF Global never sent the letter back.
If this is true, among other things, it will prove that Corzine lied to Congress when he told the House Financial Services Committee last December that he didn’t know where the customer funds went and that “I did not instruct anyone to lend customer funds to anyone.” Corzine’s statement on the memo claims that he didn’t know which account they would use to cover the overdraft, or which funds were contained in it. But this maintenance of ignorance only can get you so far; it’s impossible to believe that an assistant treasurer would just make a call like that on her own. You don’t get much more of an open and shut case than this. And as noted above, O’Brien will testify before Congress, presumably verifying the Corzine order, this coming week.
Corzine pretty much has to go to jail at this point. You have direct evidence of him stealing $200 million in customer funds to pay off his firm’s bad bets. If Corzine walks, you have to ask yourself as an investor if your brokers just have a license to rip you off with impunity in America.




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Eric and Preet will get to this right after they’re done prosecuting the wine-fraudster.
Unless one of the MF Global victims is a billionaire, it’s a victimless crime.
Wouldn’t it be clearer to say “steal your money” rather than “rip you off”? A rip off seems like may be you didn’t get full value for what you purchased. Corzine stole the money of people who trusted him- disgusting!
And don’t forget The Tomato King.
Wouldn’t it easier just to send letters to those connected to Wall Street who don’t have to worry about indictment for lying or stealing. I’ve got to think this would be a great savings in stamps alone. A small step, to be sure, in balancing our bloated budget. Next up, sending letters to the unemployed who are not welfare kings and queens. Another short list according to the politicians and Wall Street carnival barkers.
Nice link.
Mysteriously, that kind of behavior doesn’t always result in the guys at the top being prosecuted.
“Wouldn’t it easier just to send sternly-worded letters . . . ”
There, that’ll send even more shivers down their spines.
Here’s the memo. Another interesting sentence in it is “Notwithstanding the SEC’s admonition, MF Global transferred the funds.” CFTC’s lawyers said the lack of data and supporting documentation was “driving adverse inferences.” The question is whether O’Brien got it in writing or there are witneses. There are probably more shoes to drop in this one.
It’s about time someone was made an example.This seems pretty easy for your “Average Joe” to understand. I wonder if he’d have the balls to use the Aberto Gonzales “I don’t recall 72 times” defense.
Corzine’s fortunes didn’t go off a cliff all at once. I think it was a longer process than since MFG.
Anyone wanting to be NJ Gov is self-destructive –Christie that way, too, I’d bet.
Corzine is a thief, the question is will anyone do anything about it? In America if you get caught robbing a liq. store and you make off with a bottle of rum and $25 dollars chances are pretty good if convicted you’ll do 1 -7yrs. in a State prison or more depending on the State. But, that’s for the 99%, Corzine is part of the 1% and operates under a different set of rules ( none.)
What would Steve Martin say ?
Well Eexxccussseee Meee, I forgot
Could read ” They drafted a memo to ensure that MF Global stood in compliance with securities rules. And Corzine never sent the signed memo back.
Now it’s a he said she said thing and watch who winds up in prison if there is prison time.
I’m shocked.
Not.
Nonetheless, we must look forward.
Corzine is a talented man who can contribute a lot to society if he is not prosecuted.
(That’s snark, BTW. But I do not expect him to be prosecuted, anyway. And that is not snark.)
He is a D so he may actually be prosecuted.
MF Global been huge news for several days, since Louis J. Freeh tried to award them with huge bonuses after they stole segregated account money, and tried to use the investors judgment money to pay for MF Globals legal fees for a case they lost.
I don’t usually read ZeroHedge, but this was one of the best for inducing outrage. http://www.zerohedge.com/contributed/2012-12-22/mf-global-roundup-louis-freeh-feeling-heat-bill-black-talks-fraud-capital-acc
I’ve been watching CNN Enemy TV this morning, specifically the financial segment. This wasn’t even mentioned. Instead they’re talking about some lawsuit for alimony from one of those tabloid hollywood wives shows. Ridiculous. National Enquirer is less of a self-parody for news.
In a sane world this would be reason number the nth why we don’t vote for Dems–or bother to cover their daily doings in such dreary detail–any more than we do Republicans. The only difference at this stage is that they hate gay people a lot less and unions a little less. F*ck Corzine, who misled my mother among other people. And f*ck the Democratic party.
He might possibly be prosecuted if he ripped off some really really rich dude. Otherwise furgedaboutit.
“Corzine pretty much has to go to jail at this point. You have direct evidence of him stealing $200 million in customer funds to pay off his firm’s bad bets. If Corzine walks, you have to ask yourself as an investor if your brokers just have a license to rip you off with impunity in America.”
Forget it Jake. It’s Chinatown.
By talented do you mean he’s a “Savvy” businessman ?
A D, but also a One Percenter.
Tough call, but I know which way I’d bet.
Jon Corzine…former Democratic Senator from New Jersy… former Democratic governor of New Jersy… and major Democratic Party campaign contributor and Democratic party fundraiser…and major fundraiser for Barack Obama’s presidential election campaign...and personal friend of Barack Obama… and head of MF Global.
When MF Global declared bankruptsy… a lot of money went missing…
BUT, one of the firms largest and longest term investors was allowed to withdraw and transfer ALL of their money from MFG just before the bankruptsy… thereby insuring they lost no money [not one penny]… unlike other investors who had their accounts frozen and will end up loosing large amounts of money.
Who was that investor…?
Get ready for this…
THE KOCH BROTHERS !
BOTH the Democratic and Republican partys and their fradulent “leaders’ are all totally corrupted to the core. There is no saving either of these two totally corrupt organizations.
The time has come to find a new way… the two party system has failed.
Can you please provide a link to that.
That kind of info. should be shared. If for no other reason than me emailing people with the link.
Thank you.
Thank you for that link. Real eye-opener. Haven’t really kept up with it so poorly informed on the new outrage of the day. I do not for one second think any of the top tier will be hurt by this.
Rule of law these days: slap-on-the-wrist fine (amounting to pennies of what was stolen), no one is held responsible (jail time? don’t make me laugh). I believe it’s called the “The look-forward” rule of law. Caveat, it only applies to the 1%.
So from zerohedge:
“Moving along, it’s been a rough couple of weeks for MF Global Trustee Louis Freeh. We learned the former FBI director is being investigated by the Treasury Department for allegedly taking tens of thousands of dollars in speaking fees from a designated Iranian terrorist group.
Freeh was also pounded last Friday by the Senate Agricultural Committee, which sent him a letter signed by every single member of the committee, itself a rare event. They wrote:
“We are deeply troubled by media reports that you are considering seeking permission of the court to pay enormous bonuses to top executives of the now-bankrupt MF Global Holdings. It is difficult to understand why you would even consider paying anyone a bonus while nearly $1.6 billion in customer money is still missing. And it is absolutely outrageous to propose paying bonuses to the very people who were responsible for the firm’s operational, legal, and financial management at the time customer money disappeared.”
These “very people” would be MF’s top executives (sans Corzine) and lower level employees that were retained under the MF Global Holdings USA unit, which curiously filed for Chapter 11 protection only as recently as March 2, 2012. Four of these employees will testify next Wednesday, March 28, 2012, including General Counsel Laurie Ferber, known for being able to pull regulatory strings, and Christine Serwinski, who signed off on the MF Global Inc. broker unit annual audit that the SEC first withheld from the public, then changed the file stamp date. Mr. Henri Steenkamp, the PricewaterhouseCoopers-trained CFO, will testify again, as will the treasury back office worker, Edith O’Brien, for the first time.”
They’re going to pay bonuses to the very people who stole and destroyed the company. Why am I not shocked or outraged? Same reason I’m not shocked or outraged that no one will go to jail. Because that is now justice in America. Has been for a while.
Here’s a Reuters report on it.
I imagine another “proper” word, tjbs, is “astute”.
Looks like a prime occasion for Obama to invite Corzine over for a Beer Summit.
Jon Corzine, apparently, just made an itty bitty mistake in communication and some dumb underling misinterpreted what was actually said, sadly, placing Prince Jon in an distressing and most undeserved and even slightly embarrassing position
If Corzine walks, then you have to ask yourself, as a CITIZEN, if the country actually has a Rule of Law … which answer will be a huge surprise if you haven’t been awake since 2000 … unless you’re of the 1%.
DW
That’s the sad thing here. He’s a D. And to whom is he testifying? The R-led House.
Is the D-led Senate Banking Committee (Johnson – SD??) asking him any questions?
Based on all available evidence, if there was a crime committed… it seems that it’s less about fraud and larceny… and more about party affiliation.
The whole gang of 535 needs to go.
Appreciate it. Now that’s some good stuff.
And this gets to the “point”…
http://www.huffingtonpost.com/daniel-dicker/the-koch-brothers-and-mf-_b_1089906.html
We could get Democratic senators to deliver them personally. The Republican senators are to busy carrying envelopes from Wall Street to their offshore and re-election accounts to be tasked with such trivial matters. But the Dems, slow learners that they are, could use the practice, practice, practice.
Did he perjure himself to Congress or did they give him a way out by not putting him under oath? I didn’t see the beginning of those hearing. Although, I could tell he was lying the entire time.
The Beltway is in a pickle with this one.
I’m wondering if their “out” is to send Corzine into so-called “exile” while living in luxury?
It would be sad to see that not only have we lost our rule of law, but we would also have former “leaders” living in exile.
The very definition of a banana republic. :(
Book Salon up with John Horgan’s The End of War hosted by Scott Horton
This whole issue goes to the heart of Obama administration’s failure. The failure to rein in the crime and fraud on Wall St which is the cause of the economic implosion. The failure to regulate Wall St to stop further crime and fraud.
The only way the public will get Corzine in a court room is by massive public outcry.
But notice that the Republicans who should be releasing the attack dogs are almost dead silent. There is no better indication that there is ONE set of masters for both political parties.
Mr.Corzine needs to be sent to,Guantanamo Bay,with all the rest of the god damm wall street jihadist,u can take that to the bank…
he should sent to the swamps of Jersey but Obama will never do anything about it…
former CEO of Goldman Suks
and Darth gets a new heart on OUR dime
Reuters doesn’t say there was any wrongdoing with Koch brothers pulling their money out early.
They might have been targeting MFGlobal too, they would need to have received insider information, and they were being down graded at the time.
Oh My.The tangled webs we weave.
I wonder if the bonus payments Louis J. Freeh was trying to disperse would have any effect on deterioration of the memories of those underlings?
He is not without his own conflicts of interest, being investigated by the FBI for his lobbying or speechifying on behalf of of the MKO terrorist organization.
The gov’t has been playing dumb here, they know exactly what he and a half a dozen currently sidelined political operatives are up to on behalf of Israel, to promote their new ally, these anti-iranian “activists.”
This could be a Sword of Damocles to keep Freeh from finding any evidence.
LINK
Can’t say Freeh didn’t try.
Yes, the slow earning, but noble and selfless Democrats… unlike Republicans, who are just corrupt to the core.
note to yall
rich get richer poor get poorer
hope? change?
nah
it twas always thus
It appears that’s exactly what happened… they were tipped off by MFG as to what was about to happen.
See my link in comment 28.
The game is rigged… the Democrats and Republicans are ALL in on it… and they are working hand in hand to loot the country.
The Robber Barons are back and they’re all gonna get sumpin’ while the gettin’s good!
There’s not “direct evidence of him stealing $200 million in customer funds”. It seems that Corzine authorized a transfer but read the committee’s memo, especially the footnote on page 3 where it says:
“Futures commission merchants and broker-dealers are permitted to, and in the ordinary course do, deposit funds in excess of segregation requirements in segregated accounts. These excess funds belong to the firm, and may be transferred out of the segregated accounts.”
Link
Depends what the meaning of the word is, is.
Here’s someone to watch. Says he just got brought in and will push immunity for O’Brien.
@jameskoutoulas
CEO of Typhon Capital Management & Lead Attorney/Co-Founder of the Commodity Customer Coalition which is fighting to return the property of MF Global clients
I don’t think that is clear or apparent, and @jellybelly appears to be correct.
Corzine didn’t tell the truth to congress but it’s clear if he lied yet.