MF Global

  • 28 Aug 2014 at 10:00 AM

So Did Anyone Lose Any Money At MF Global?

Oh sure, obviously, the answer is yes, everyone. But Jon Corzine would like it to be noted that, eventually, it all came back and then some. Read more »

A federal judge on Wednesday ordered PricewaterhouseCoopers to face a $1 billion lawsuit claiming that its bad accounting advice was a substantial cause of the October 2011 bankruptcy of MF Global Holdings Ltd, a brokerage run by former New Jersey Governor Jon Corzine. U.S. District Judge Victor Marrero in Manhattan said PwC’s advice on “repurchase-to-maturity” transactions through which Corzine bought $6.3 billion of European sovereign debt affected how MF Global implemented its strategy and in turn contributed to its alleged losses. “This line of causation gives rise to a plausible claim that PwC proximately caused harm to MF Global,” Marrero wrote. MF Global’s bankruptcy plan administrator sued PwC on March 28, accusing it of professional malpractice for having provided “flatly erroneous” accounting advice to the company. Corzine is not a defendant. [Reuters]

Reuters reports that earlier today, U.S. District Judge Victor Marrero greenlighted a lawsuit seeking to hold Jon Corzine and the upper echelons of MF Global management responsible for the late firm’s difficulties. But before customers’ lawyers got around to high-fiving and slapping each other on the back, Marrero had some words for them too. The short version: You assholes are on thin ice, too. Read more »

So James Giddens, who is working diligently to find John Corzine’s former clients’ money, sent a letter to a few MF Global introducing brokers and other vendors. One-hundred and forty, give or take. The missive includes words and phrases like, “considering whether to seek to recover” and “records suggest” you may have “received more than” you should and “litigation” and “right to insist on payment.”

In retrospect, now that it’s been brought to his attention by The New York Times, the trustee sheepishly acknowledges that these may seem like arm-twisting tactics. But he assures you that when he wrote all of those things and then offered to go away if you paid him 90% of what he was asking for, bullying you was the furthest thing from his mind. Read more »

Point: Jon Corzine acted in good faith while at the helm of MF Global, accept it, move on, show’s over, nothing else to see here, this man is a saint, god why are you so obsessed with him? Counterpoint: Oh, he was a saint alright. The Patron Saint of Plot Hatching and Unauthorized Cash Transfers. Read more »

Lawyers for Mr. Corzine filed a motion late Tuesday to dismiss a civil case against him brought by the Commodity Futures Trading Commission, the federal agency that regulated MF Global until its demise in 2011. The 30-page motion, filed in Federal District Court in Manhattan, outlined Mr. Corzine’s defense and leveled a sharp critique of the commission, depicting the agency’s lawsuit as poorly drafted and error prone. “There is no evidence demonstrating that Mr. Corzine knowingly directed unlawful conduct or acted without good faith,” wrote the lawyers from Dechert, Andrew J. Levander and Benjamin E. Rosenberg. “Rather than acknowledge that reality and move on, the C.F.T.C. has clung to its baseless presumptions and manufactured charges of wrongdoing that are supposedly connected to Mr. Corzine.” [Dealbook]

  • 27 Jun 2013 at 4:25 PM

MF Global Was Bad

The thing is that when you run a brokerage company and it goes and loses $1bn of customer money, the CFTC really ought to charge you with “fail[ing] to supervise diligently the activities of [your] officers, employees, and agents,” no? At least? There are various views of Jon Corzine’s role in MF Global’s efforts to misplace a billion dollars – did he intentionally misuse customer funds? was he aggressive but above-board? just confused? – but no one is going around saying “oh, yeah, Corzine was really on the ball there protecting customer money.” You’re just irreducibly not supposed to lose a billion dollars in customer money, and if you do, “failure to supervise diligently” is pretty much the kindest possible description.

Anyway here is the CFTC press release and complaint against Corzine and Edith O’Brien, the MF Global assistant treasurer and general fall guy. There have been approximately eight thousand lengthy blow-by-blows of the MF Global implosion by now, and I would understand if you didn’t want to read this one; I sure didn’t. Unlike the others, though, the CFTC complaint is enlivened by recorded telephone conversations. In which Edith O’Brien does not come off well: Read more »