Corzine resigns as CEO of bankrupt MF Global
In this Jan. 9, 2011 file photo, former New Jersey Gov. Jon S. Corzine reflects on his four year term in office during an interview with The Associated Press at his home in Hoboken, N.J. / File,AP Photo/Rich Schultz
Updated at 9:46 a.m. ET
WASHINGTON - Jon Corzine stepped down Friday from running the securities firm that collapsed after his disastrous bets on European debt. The move was announced as a criminal probe of the company appeared to be intensifying.
The firm, MF Global, said Corzine has resigned as chairman and CEO and will decline payments from a severance package worth $12.1 million, including cash and benefits.
MF Global filed for bankruptcy protection on Monday after its bets on European debt spooked investors and trading partners.
The company is under investigation by regulators and the FBI because hundreds of millions disappeared from customer accounts as it slid toward bankruptcy.
Corzine hasn't made any public appearances since MF Global's bankruptcy filing, but sources to The New York Times' Dealbook blog said that he has hired a criminal defense lawyer.
FBI to probe Corzine firm's use of client money
How MF Global came up "snake eyes" under Jon Corzine's watch
Corzine's MF Global firm files for bankruptcy
Corzine ran the investment firm Goldman Sachs and was governor of New Jersey before joining MF Global.
He said in a statement that he feels "great sadness about what has transpired at MF Global and the impact it has had on the firm's clients, employees and many others." He said he will continue to assist the company and its board as they continue to sort out what happened in the firm's final days.
Corzine said his resignation was voluntary, and called it "a difficult decision."
Regulators say more than $600 million in client money is still missing. They say MF Global apparently moved the money out of client accounts in mere days as the company's cash dried up.
The criminal investigation of MF Global appeared to be moving forward. Corzine hired criminal defense attorney Andrew Levander of Dechert LLP, according to a person familiar with the situation who spoke on condition of anonymity because he was not authorized to discuss it. The news that he retained a lawyer was reported earlier by The Wall Street Journal.
The FBI was examining whether MF Global's actions violated criminal laws, two people familiar with the situation had told The Associated Press on Tuesday. They spoke on condition of anonymity because they are not authorized to discuss the matter publicly.
The New York Post reported that U.S. Attorney Preet Bharara in New York City also is investigating.
Securities firms such as MF Global are supposed to keep client money separate from company money. That way, clients can claim their assets easily if the company fails.
MF Global admitted to regulators early Monday that it could not find about $1 billion in customer money. The company has maintained that the money is being held up by trading partners that froze its accounts as it teetered last week.
The collapse of MF Global has begun to shine a spotlight on the top federal regulator investigating the matter.
Gary Gensler, head of the Commodity Futures Trading Commission, is leading the inquiry into how hundreds of millions vanished last week from client accounts at MF Global.
He 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. And on Wednesday, Republican Sen. Charles Grassley of Iowa, who sits on the committee that oversees Gensler's agency, said "it's hard to see how the chairman could be completely objective in looking out for wronged investors when he has such strong ties to the principal of the failed firm."
MF Global says lead director Edward Goldberg and president and Chief Operating Officer Bradley Abelow will continue in their current positions.
Corzine's professional meltdown began when he bet heavily on European debt, and lost. As head of MF Global, he pushed for the $6.3 billion gamble on debt issued by Italy, Spain and other European nations with troubled economies that ultimately doomed the securities firm he took over last year.
Before filing for bankruptcy, a presale audit revealed potentially millions in missing client funds, scaring off a potential buyer. MF Global was in court Tuesday, asking a judge to allow it to borrow $8 million to finance the bankruptcy. By that night, the FBI and federal prosecutors had gotten involved.
"There is no question about his integrity," said Sen. Ray Lesniak, former chairman of New Jersey's state Democratic Party, who recruited Corzine to run for U.S. Senate in 2000. "His judgment and risk-taking is another issue."
Corzine joined MF Global last year, determined to remake his image on Wall Street after losing the 2009 New Jersey governor's race to Chris Christie, the brash and underestimated Republican former federal prosecutor. Before entering politics — first as U.S. senator then as a one-term governor — Corzine built his Wall Street credentials at Goldman Sachs, the white-shoe investment bank where he worked for 25 years.
"Jon has this avuncular professorial demeanor with his beard and sweater that masks the alpha-male, aggressive, risk-taking guy that he is," says William Cohan, the author of the book "Money and Power: How Goldman Sachs Came to Rule the World."
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. . . I hope he's found to have broken laws, . . .
So you're saying you'll be disappointed if he did nothing wrong?
Jules - Hundreds of millions dissappearing, a company going down the toilet under his commande. Iit is obvious he did something wrong. credible is just hoping the justice system requires him to pay something for it.
nothing to worry about!
Authorities would find someway to avoid prosecuting him on criminal
charges!
But, the problem is, there are too many guys like him, who have
swindled the public and robbed investors!
And, ALL of them can't be 'let off the hook', it wouldn't look good! Even the dumbest citizen would figure out that the system
is rigged to let Wall St. rob the public!
So, occasionally, someone has to take a fall! Corzine is likely
one of these guys!
No, he doesn't need the 12.1 million severance pay, there's 600 million outstanding, still missing! What's the chances he has
some of that in an offshore bank?!
He's got a choice, stay and be prosecuted, and probably get a slap on the wrist, or, run to a country with a non-extradition policy and retire with whatever funds he has in his possession!
It's HIS CALL!
It seems the more they have, the more they want. For some reason, millions and millions just doesn't seem to be enough.
------------------------
Yup, that would make him a perfect candidate for Congress.
No wonder he doesn't care about the 12.1 million golden parachute.
Ain't America great - at least, if you're at the top of the food chain? Doesn't matter what you do to your company, your employees, the shareholders...the tradition of one-hand-washing-the-other at the top is so very strong that you'll get handed a boatload of loot even if you destroyed your company and left in a cloud of suspicion.
And THOSE are the people the Republicans answer to.
"Come on, take the money and RUN!!!"