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Daniel Wagner and Bernard Condon, AP Business Writers, On Friday November 4, 2011, 4:42 pm
WASHINGTON (AP)

-- He set out to create a mini-Goldman Sachs. In the end, he built a mini-Lehman Brothers.

Former New Jersey Gov. Jon Corzine's resignation Friday from the securities firm he led capped a week of high drama and swift failure.

MF Global collapsed into bankruptcy Monday, and Corzine has since hired a criminal defense attorney amid an FBI investigation into the disappearance of hundreds of millions of dollars in client money.

MF Global's implosion, which came after Corzine made a big, risky bet on European debt, revived memories of the 2008 banking crisis and the ruin of the much bigger Lehman.

As Corzine, 64, stepped down as chairman and CEO, he said he felt "great sadness about what has transpired at MF Global." Corzine, who ran the investment firm Goldman Sachs years before joining MF Global, said his resignation was voluntary and called it "a difficult decision."

Regulators said more than $600 million in client money is still missing. They said MF Global apparently moved the money out of client accounts within days as the company's cash dried up.

The FBI is examining whether the firm's actions amounted to a crime, two people familiar with the situation told The Associated Press this week. They spoke on condition of anonymity because they were not authorized to discuss the matter publicly. The New York Post reported that U.S. Attorney Preet Bharara in New York City is also investigating.

Corzine hired prominent defense attorney Andrew Levander of New York, according to a person familiar with the situation.

Securities firms such as MF Global are supposed to keep their own money separate from their clients'. That way, clients can retrieve their assets easily if the company fails.

MF Global has maintained that the missing customer money is being held up by trading partners that froze its accounts as it teetered last week.

The Corzine era at MF Global began in March last year.

Seeking to raise MF Global's profile and expand its business, he sought help from former Goldman Sachs colleagues in New York and Washington.

In February, he successfully lobbied the Federal Reserve Bank of New York to make MF Global one of only 22 banks authorized as primary dealers of U.S. Treasury securities. The New York Fed's president and CEO, William Dudley, was a partner at Goldman until 2007.

Corzine later lobbied his company's main regulator, the Commodity Futures Trading Commission, on new rules, including one related to the handling of client money. He held a call with former Goldman colleague and CFTC Chairman Gary Gensler in July, according to public records.

Corzine, who served one term in the U.S. Senate before being elected governor in 2005, also saw investment opportunity as the European debt crisis unfolded.

European bonds were paying higher returns than debt issued by other nations, and Corzine believed European leaders would back their countries' bonds and prevent them from losing value.

So MF Global decided to buy European government debt, much of it Italian. By the end of 2010, the firm had placed big bets -- and did so with borrowed money. To raise the money, it turned to a common financing technique called repurchase agreements. In the end, it proved fatal.

On the surface, a repo agreement seems like a wise way for a firm to borrow. In exchange for cash, the borrower sells its lender a security such as a government bond with a proviso: It will buy back the security when the loan comes due.

The security acts like collateral for the loan. If the price of the security doesn't move much, the loan seems safe.

But in MF Global's case, the securities were European government bonds. And by June, regulators were growing worried about those bonds.

The Financial Industry Regulatory Authority, a private regulator that oversees brokers, demanded MF Global hold more of a financial cushion against possible losses on its European bets. One fear: If the bonds fell in value, lenders would demand more collateral from MF Global. That could lead others to demand collateral.

It would all amount to a classic -- and deadly -- bank run. As it turned out, that's just what happened.

First came reports from news organizations and Wall Street analysts raising questions about MF Global's wagers on Europe. Then Moody's and other rating agencies downgraded the firm's creditworthiness.

Fear among MF Global's lenders and trading partners mounted, and panic set in. MF Global's stock price plunged. The firm lost business. Customers began pulling their money out, leaving the firm with little cash of its own.

In the end, as with Lehman and the collapsed hedge fund Long Term Capital Management, it wasn't so much what the firm bought that sped its downfall. It was the way it did so, with borrowed money.

Those trades were not the first time MF Global suffered from faulty risk management. It was fined $10 million in 2009 by the CFTC for failing to spot a rogue trader.

Two questions overhanging the company and its creditors: Will the Securities and Exchange Commission and the FBI discover evidence that this scramble for cash led MF Global to break the law and raid customers' accounts? And will Corzine himself become a focus of the criminal investigation?

As the investigations proceed, MF Global said lead director Edward Goldberg and president and Chief Operating Officer Bradley Abelow will continue in their current positions.

At the same time, MF Global's fall has shined a spotlight on Gensler, the top federal regulator investigating the matter.

Gensler long ago built close ties to Corzine -- and eventually worked for him -- as they rose through the ranks of Goldman Sachs. Later, they collaborated on Capitol Hill to pass an anti-corporate fraud law.

Corporate governance experts said Gensler's ties to Corzine posed an apparent conflict of interest that could taint the probe's findings. Some have said he should remove himself from the investigation.

Sen. Charles Grassley, R-Iowa, who sits on the committee that oversees Gensler's agency, said Friday that even after Corzine's exit from MF Global, "It's hard to see how the commission chairman could be completely objective in looking out for wronged investors when he has such strong ties to the principal of the failed firm."

"It seems recusal would be the best outcome for investors," the senator said.

Condon reported from New York.

Time for this old crook to get a Government paid vacation!

I bet Fuzz voted for him when he was Gov/Sen from NJ

No rest for the wicked!

Now Check Out All The Ways Jon Corzine Is Connected To Democrats And Obama
Joe Weisenthal|October 31, 2011|3,034|13


The Republicans have just posted this regarding Jon Corzine, the man at the helm of failed MF Global.

---

Jon Corzine’s Wall Street Firm, MF Global Has Filed For Bankruptcy. “Broker-dealer MF Global, headed by former New Jersey governor and Goldman Sachs chairman John Corzine, has filed for bankruptcy protection, apparently because of holdings of European debt.” (“Broker-Dealer MF Global Files For Bankruptcy,” USA Today, 10/31/11)

Corzine Is Expected To Receive A $12 Million Golden Parachute. “With a sale of MF Global, Mr. Corzine’s role at the firm will almost certainly end, though he is expected to receive a severance payment of nearly $12.1 million.” (Michael J. De La Merced And Ben Protess, “MF Global Said To Be In Deal Talks With Interactive Brokers,” The New York Times’ “Dealbook,” 10/30/11)

Corzine Has Bundled Over $500,000 For Obama’s Reelection Campaign. (Center For Responsive Politics, Opensecrets.Org, Accessed 10/31/11)

“Corzine Has Already Held A High-End Fundraiser And Organized A Secret Meet-And-Greet Between Finance Executives And Obama’s New Chief Of Staff.” (Peter Stone, Elizabeth Lucas, John Aloysius Farrell, Paul Abowd and Rachael Marcus, “Obama Campaign Reports More Than 350 Big Bundlers, Including Solyndra Figures,” Iwatch News, 10/14/11)

Corzine Co-Hosted A Wall Street Fundraiser For Obama In April. “President Obama's first New York event since he declared his reelection will be at the home of former New Jersey Gov. Jon Corzine, the former Goldman Sachs financier who will host a high-dollar, small dinner, an invitation to the event shows. Tickets to the event, which sources said Corzine is co-hosting with another financier, longtime Obama backer Orin Kramer and his wife, cost $35,800 per person.” (Maggie Haberman, “Obama Fundraiser At Corzine Home,” Politico, 4/5/11)

The Fundraiser Was Part Of Obama’s Efforts “To Soothe Frayed Relations” With Wall Street. “The choice of Corzine's home is notable, given his ties to the financial sector. The White House has made efforts in recent months to soothe frayed relations with the business community, after an election cycle during which some donors, unhappy with the push for Wall Street reform, claimed to be sitting on their hands.” (Maggie Haberman, “Obama Fundraiser At Corzine Home,” Politico, 4/5/11)

Corzine Attended Obama’s Blue Room Meeting With Wall Street Donors. (Josh Gerstein, “All At DNC Blue Room Meeting With Obama Were Donors, Politico’s “Under The Radar,” 6/26/11)

Just Before Announcing For Reelection, Obama Brought Two Dozen Wall Street Executives And Long-Time Donors To The White House For A Blue Room Meeting. “A few weeks before announcing his re-election campaign, President Obama convened two dozen Wall Street executives, many of them longtime donors, in the White House’s Blue Room.” (Nicholas Confessore, “Obama Seeks To Win Back Wall St. Cash,” The New York Times, 6/12/11)


The Meeting Was Organized By The Democratic National Committee To Try To “Win Back” Wall Street, One Of Obama’s Main Sources Of Campaign Cash. “The event, organized by the Democratic National Committee, kicked off an aggressive push by Mr. Obama to win back the allegiance of one of his most vital sources of campaign cash — in part by trying to convince Wall Street that his policies, far from undercutting the investor class, have helped bring banks and financial markets back to health.” (Nicholas Confessore, “Obama Seeks To Win Back Wall St. Cash,” The New York Times, 6/12/11)


Obama “Opened The Floor” For The Donors To Talk To Him “On Hot Issues.” “The guests were asked for their thoughts on how to speed the economic recovery, then the president opened the floor for over an hour on hot issues like hedge fund regulation and the deficit.” (Nicholas Confessore, “Obama Seeks To Win Back Wall St. Cash,” The New York Times, 6/12/11)


Read more: http://articles.businessinsider.com/2011-10-31/politics/30341196_1_jon-corzine-mf-global-bankruptcy-protection#ixzz1cqU4Kbep



Full steam ahead!

There's scads of famous quotation sites that need to know this.

Insanity: doing the same thing over and over again and expecting different results.


There...Better?


What in the world is holding you back now?

Yup.


Nope. Not if you are saying he said that. It's no biggie really, just was giving you the information is all. Do with it what you want.

Never vote for a guy who's name sounds like a steroid shot...

Well.......Kristy is fat......

There's Surfish1961, F16devils, Chemyst, Torpedo1, Mark, Brian and myself to name a few (the Dante herf crew), and no, none of us voted for Corzine or Obumer.

...and those Jersey Shore pigs are from New York.

But they are yours now...

I amend the last to read "Alleged" scumbags.

LOL. I see it is only sauce for the goose with you.

You're correct it is the same game and the "alleged" post was a jibe at Hockeydad, who is apparently the advocate general for the scumbags at Goldman Sachs, not intended as any partisan defense of Corzine who I regard as just another branch of the Goldman Sachs international crime syndicate.