Feds Sue Jon Corzine Over MF Global Collapse
Federal regulators have filed civil charges against former New Jersey Governor Jon Corzine in connection with the failure of his commodities firm, MF Global. The government says Corzine failed to stop the firm from dipping into customer funds during a financial crisis in October 2011.
DAVID GREENE, HOST:
And some news here in the U.S. New Jersey's former governor, John Corzine, is facing civil charges in connection with the collapse of MF Global. That's the commodities firm he used to head.
Here's NPR's Jim Zarroli.
JIM ZARROLI, BYLINE: The Commodity Futures Trading Commission has charged Corzine and another official at the firm with misusing customer funds. Corzine came to the firm after losing his re-election bid for New Jersey governor. U.S. officials say he wanted to turn MF Global into a major investment bank. Under his watch, the firm bought risky foreign government bonds, and by the summer of 2011, had lost a lot of money.
The commission's enforcement director David Meister says the firm began raiding its customers' accounts to pay what it owed.
DAVID MEISTER: They did not have a good handle on the precise line between customer money and house money, and they did not have a good handle on forecasting what the demands on their cash would be.
ZARROLI: One official at the firm was quoted as saying, "MF Global was skating on the edge and didn't have much ice left." By the time the firm went under, more than a billion dollars in customer funds had disappeared.
U.S. officials say Corzine didn't try to stop what was happening - even though he was legally obligated to protect the firm's customers. Corzine himself has denied any wrongdoing and his lawyer said yesterday he looks forward to being vindicated in court.
But the firm has now agreed to pay back more than a billion dollars to its customers, as well as $100 million fine. The settlement has to be approved by a judge.
Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.View this story on npr.org