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Email: Corzine Ordered Transfer Of $200 Million Before MF Global's Collapse
By
Jen Chung
Published Mar 24, 2012
Modified Mar 24, 2012
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By
Jen Chung
Published Mar 24, 2012
Modified Mar 24, 2012
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Last year, former NJ governor and U.S. Senator Jon Corzine insisted he didn't tell his employees at MF Global to misuse customer funds. But now it seems emails show that he ordered that $200 million in a customer fund account be transferred to JP Morgan Chase.
Last fall, MF Global went into bankruptcy (stupid European crisis!) and there's $1.6 billion is missing and now Congress is investigating. And the investigators found an email from assistant treasurer Edna O'Brien that said a $200 million transfer from MF Global to JP Morgan was "Per JC's [Jon Corzine's] direct instructions." And that email is from October 28, three days before the firm collapsed.
The Wall Street Journal reports, "The transfer was needed to fix a $175 million overdraft in the bank account that was making it harder for MF Global to buy and sell securities as it scrambled to survive in late October, according to the memo. Customer accounts hold both firm money and customer money that isn't supposed to be touched under federal regulations."
However, the NY Times says, "At first, the revelation fueled speculation that Mr. Corzine had instructed the transfer of customer funds, despite his assertions to the contrary. But it appears to be no smoking gun. While the memo makes clear that Mr. Corzine was involved in patching the overdraft, it does not indicate that he requested the funds be drawn from customer accounts. He asked only that the overdraft be fixed. And in a footnote, the memo noted that futures brokerage firms like MF Global frequently deposit firm money into customer accounts and may withdraw it at will."
Yes, that's what Corzine's spokesman's statement about the emails says, "He never directed Ms. O’Brien or anyone else regarding which account should be used to cure the overdrafts, and he never directed that customer funds should be used for that purpose. Nor was he informed that customer funds had been used for that purpose.” Still, Corzine, historically, has loved risky trading.
Tagged
bankruptcy
financial collapse
jon corzine
mf global
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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Gothamist is funded by sponsors and member donations
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