Jon Corzine Portrait
A U.S. House subcommittee said today that MG Global collapsed because of mistakes made by Jon Corzine, the former financial wizard voters elected governor of New Jersey. “Corzine dramatically changed MF Global’s business model without fully understanding the risks associated with such a radical transformation,” Rep. Randy Neugebauer, chairman of the House Financial Services Subcommittee on Oversight and Investigations, said in a statement. “Farmers, ranchers and other customers may never get back over $1 billion of their money as a result of his decisions.” My colleague Malia Rulon Herman in Washington reports the subcommittee plans to release the full results of its year-long investigation into the collapse of MF Global today.
"According to a summary of the findings released today, Corzine set up an authoritarian leadership structure that allowed him to make risky investments in European bonds, prompting a downgrade of the firm’s credit rating. That prompted investors to pull their money from the firm, which in turn led the firm to use other clients’ money to cover its losses."
"This failure represents a dereliction of his duty as MF Global's chairman and CEO."
According to the subcommittee, prosecutors and regulators will determine if MF Global or its employees violated laws or regulations by using customer funds to cover losses. None of MF Global’s executives, including Corzine, have faced civil or criminal charges in connection with the firm’s collapse.
Corzine was defeated for a second term in New Jersey by Gov. Christie.