Former MF Global Head Jon Corzine Sued for Theft of Customer Funds

By:  Bob Adelmann
07/05/2013
       
Former MF Global Head Jon Corzine Sued for Theft of Customer Funds

The Commodity Futures Trading Commission's lawsuit against former MF Global head Jon Corzine will likely end his career as a Wall Street manipulator.

The sanctions sought against Jon Corzine (shown in photo), the former head of MF Global, by the U.S. Commodity Futures Trading Commission (CFTC) in a lawsuit filed in U.S. Southern District Court in New York on June 27 should end Corzine’s career as a Wall Street manipulator and send him into ignominious oblivion.

In the 47-page filing by Steven Ringer, a CFTC attorney, the charges against Corzine (and his co-conspirator, Edith O’Brien, who, as assistant treasurer of his firm, aided and abetted the theft) include violating the sacrosanct rule against using customers’ funds for the firm’s own purposes. In this case, wrote Ringer:

MF Global … on the brink of failure and in desperate need of cash to survive, invaded its customer funds and violated these fundamental customer protections on a scale never previously seen in the U.S. futures markets, harming thousands of people….

Jon Corzine, the Chief Executive Officer … is legally responsible for MF Global’s misuse of customer money. Edith O’Brien, MF Global’s Assistant Treasurer, is also liable.

After reviewing the timeline of Corzine’s attempts to turn a small futures trading company into a rival of his old firm, Goldman Sachs, the filing said:

Corzine bears responsibility for MF Global’s unlawful acts. He held and exercised direct or indirect control of MF Global and [its parent company MF Global Holdings] and either did not act in good faith or knowingly induced these violations.

The Fiscal Times gave a brief overview as to what is happening with the MF Global case:

In an agreement with the CFTC that’s still subject to court approval, MF Global has agreed to make sure its commodity customers get back the amounts owed to them as of October 31, 2011, when it declared bankruptcy. It has also agreed to pay a $100 million penalty. The CFTC doesn’t have the authority to bring criminal charges against Corzine, but it is looking to ban him from the futures and options industry, a ruling that would be tantamount to ending his Wall Street career.

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