Tuesday, November 22, 2011
Bad news for Jon Corzine
The amount of customer money missing from the collapsed trading firm MF Global may be more than $1.2 billion — double previous estimates — the trustee dismantling the firm’s brokerage unit said on Monday.
But the surprise finding, which caught regulators off guard, may be overstated, according to a person briefed on the investigation. Some regulators say they believe that the trustee double-counted $220 million that had been transferred between units of MF Global, this person said.
Still, the much higher number highlights the disarray of MF Global’s records and raises significantly the hurdle for tens of thousands of customers seeking to get their money back. The trustee’s estimate represents a significant portion of customer funds held by MF Global.
How do you screw up your records that badly if you are not intending to screw them up? Well, it can happen. But only if your internal auditors have no power or no brains.
3 Comments:
By 
, at
Wed Nov 23, 02:34:00 AM:
Questions:
So how does a theft of this magnitude unfold?
The buck stops with Corzine and rightfully so, but where were the the other top execs, the COO and the CFO for example? Why don't we hear about them? How could this happen without their knowledge, or if they knew and were powerless to stop it, why didn't they resign in protest?
Or am I missing something? Is there some legal loophole that allows an MF Global to speculate with clients' funds without their knowledge or consent?
By , at
Wed Nov 23, 07:37:00 AM:
The moment of truth for Jon Corzine was when his officer in charge of funding MFG's long shot proprietary trading positions proposed to him that MFG use other peoples money without permission for the purpose, and he agreed. That was the "bad news" moment.
By , at
Thu Nov 24, 09:24:00 PM:
If Corzine doesn't go to prison for this, then our justice system is done for.
