Arab Today, arab today cftc sues corzine over mf global collapse
Last Updated : GMT 06:30:05
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CFTC sues Corzine over MF Global collapse

Arab Today, arab today

Arab Today, arab today CFTC sues Corzine over MF Global collapse

New York - AFP

US regulators Thursday sued former US senator and New Jersey governor Jon Corzine over misuse of $1 billion in client funds in the collapse of brokerage MF Global. The Commodities Futures Trading Commission sought restitution, an unspecified financial penalty and a ban from securities markets against Corzine, a one-time Wall Street high-flier brought to earth when his company fumbled on risky bets on European sovereign debt in 2011. The CFTC sued MF Global\'s assistant treasurer, Edith O\'Brien, for raiding customer accounts to keep the company afloat. It also sued and reached a settlement with MF Global itself, fining it $100 million over the same charges, the money to be paid from whatever is left after clients are paid for their losses in the collapse. The CFTC charged that Corzine was aware of the illegal use of funds from customer accounts to balance the brokerage\'s own books and pay creditors. \"In the last week of October 2011, with virtually no other sources of immediate cash to turn to, the firm repeatedly and unlawfully used customer funds for firm needs, ultimately leaving it nearly $1 billion short of customer funds,\" the regulator said in a statement. \"In that last week, Corzine is alleged to have been aware of the firm\'s true low-cash balance, even as he directed the firm to continue paying large obligations without inquiring how the firm could come up with the money to do so.\" CFTC Enforcement Director David Meister told a news conference that recorded phone conversations and other evidence established that Corzine was told at one point in MF Global\'s final week before declaring backruptcy that it had only $82 million in its accounts. At the time, the company owed $200 million on a JPMorgan Chase London account that had been overdrafted. \"Mr. Corzine directed that the overdrafts be satisfied without determining if they could legitimately come up with the money,\" Meister said. \"The overdrafts were paid with customer money.\" Meister declined to comment on CFTC investigations into other MF Global officials, the status of any settlement talks with Corzine, or whether the evidence in the CFTC complaint contradicted Corzine\'s testimony before Congress that he knew nothing about missing customer funds before the firm\'s bankruptcy.

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