Former Gov. Corzine Subpoened…and What the MF Global Fallout Could Mean
- Posted on December 2, 2011 at 12:07pm by
Becket Adams
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Former New Jersey governor, senator, and Obama fundraiser, Jon Corzine has been subpoenaed to testify next week about his leading role in the demise of MF Global, a brokerage firm that collapsed this fall after a disastrous bet on European debt.
The Dec. 8 hearing will be a rare moment in Washington. Congressional historians and Capitol Hill insiders cannot recall another time when a former member of Congress was summoned by his former peers to testify about a matter under federal investigation.
Corzine has also been asked to testify later this month before two other panels, including the Senate Agriculture Committee. In the case of SAC, Corzine could face tough questions from former Senate colleagues.
The House Agriculture Committee decided to issue the subpoena only because Corzine failed to reply to an informal request to appear at the hearing.
Chairman Rep. Frank Lucas, R-Okla., said his testimony is “essential to fulfill our objectives.”
However, although the Obama fundraiser has been subpoenaed, customers, investors and creditors probably won’t learn anything new about the demise of MF Global or how Corzine pushed the firm off a cliff by betting its assets.
“It‘s a unique situation that Jon’s in,” said Abbe Lowell, a defense attorney who was counsel to the House of Representatives and whose clients have included former Sen. John Edwards and former Nevada Gov. Jim Gibbons.
The subpoena comes on the heels of an investigation by regulators who are looking into whether MF Global used money from customers’ accounts for its own purposes as its financial condition worsened.
An estimated $1.2 billion or more may be missing from customer accounts. Regulators say MF Global moved money out of customer accounts within days as the firm’s cash dried up.
If MF Global was using customer accounts to alleviate their financial burdens, then it has violated securities rules. And it might get worse: the FBI is investigating whether the firm violated any criminal laws.
“It seems crazy that the trades that blew up the firm were leveraged bets on Italian sovereign debt, but the potential theft of customer funds is where this really becomes lunacy,” writes John Ogg of 24/7 Wall St..
Even before the subpoena, Corzine had “lawyered-up” for civil suit protection.
“It might be a safe bet to put the odds that [Corzine] will ‘Plead the Fifth’ at 99.9 percent. After all, it would be in his best interest unless he can somehow claim that this whole implosion was just a misunderstanding. The odds of that ‘unless’ factor: zero,” said Ogg.
(Related: ‘Going Galt’: Hedge Broker Shuts Down Firm With Chilling Letter About the Market)
Outside of what may be very criminal behavior, the implications of the MF Global fallout could be severe.
“Imagine if this happened at a ‘too big to fail’ institution and millions of customers are suddenly told ‘we do not know where you client funds are and you cannot close out or hedge any of your positions,’” Ogg said.
“Imagine what can happen if a firm can just declare bankruptcy and then says that its customer segregated funds accounts do not add up. It would be a license to steal and the millions and millions of dollars (actually billions and billions).”
The amount that could be stolen is so great, in fact, that it could be large enough that many managers who are supposed to have a fiduciary duty might be willing to risk prison.
One last note: no one at MF Global has been charged with a crime or civil violation
The Associated Press contributed to this story.
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georgeisn6
Posted on December 5, 2011 at 10:56amHow are they going to get him out of “O”whatabummers” pocket?
Report Post »ireport uderide
Posted on December 5, 2011 at 7:39amSarc.
Move along, nothing to see here.
Blame Bush!
It’s the Republicans fault; they’ve been in charge for 10 months.
Corzine is the smartest man in the room.
And if Corzine is finally subpoenaed, all he has to do is use the Hillary defense strategy.
Report Post »“I don’t recall”.
tbarr4
Posted on December 4, 2011 at 9:28pmArrest Corzine now and have his share a cell with Bernie Madoff
Report Post »flfshrmn
Posted on December 4, 2011 at 11:47amPeople better wake up now! Get your $$$ out of the banks and in YOUR posession as soon as possible. Maybe even invest in a PM or a piece of land. Just leave enough to pay bills and function, but don’t leave large sums of paper (dollars, CD’s, ect)anywhere or you may very well lose it all. MF Global is a canary in the mine shaft, and events in EU as well for what we are to face here in the US. Why would our government introduce BILL 1867 that would declare the world, including the US a battlefield AND to give them the authority to detain an American citizen indefinately without due-process? This means our Constitution is null and void!! They have prepared for this moment with FEMA Camps that can hold 10mil. people. What people are they expecting to have to detain indefinately? My guess is the people that get out of control when the FED Gov. uses the banks to steal everyones savings, checking, non-leveraged, and leveraged investment accounts, pensions, 401K and anything else that is a promisorry PAPER NOTE. They may even confiscate PM’s as all of this HAS happened before in our history. Actions like this will piss-off and get several million US CITIZENS held indefinately in detention centers. What will happen if banks only let you get $100 a week, no ATM’s, and the bank is only open 2-3days a week? How can all of this coupled with Bill 1867 NOT paint a picture? I would love nothing more than to be wrong……however, take care of youselves and your families and Merry Christ
Report Post »Bill Burns
Posted on December 4, 2011 at 5:10amYet another of O-blame-O’s handpicked cronies has his tit in a wringer. It may take decades to right the ship Obama has driven into the great abyss for our children and grandchildren to deal with.
Report Post »Collbuzz
Posted on December 4, 2011 at 12:04amWho misplaces 1.2 billion? A criminal idiot, and our VP thinks Corzine is a genious. God help us.
Report Post »watashbuddyfriend
Posted on December 3, 2011 at 11:32amSubpoened? If you draw the line in the sand, who is qualified to question him?
Report Post »Pigpen
Posted on December 3, 2011 at 4:23pmUm, well, WATASHBUDDYFRIEND, if that is a genuine question on your part, then the genuine answer to “Who is qualified to question him [Corzine]? would be, “Any one of the myriad of Associated Persons who have passed the Series 3 National Commodity Futures Exam.”
And pretty much ANYONE who has ever read a Wall Street Journal before would know that YOU CAN‘T USE CUSTOMERS’ ACCOUNTS TO MANAGE THE RISK ON THE FIRM’S OWN PROPRIETARY TRADING !!! (It’s not just against CFTC regulations or FINRA rules, it’s a felony!)
Report Post »str8blues
Posted on December 3, 2011 at 9:45amFrom this bastard who should be put in prison for life and Bernacke and Timmy Geitner should be hung on the public square for committing the biggest heist on America in History. Printing money to prop up the EU. Where’s the OWS crowd. We know who the criminals are. We can name names rather than just going after bogus wall street fat cats. Corzine, Bernacke and Geitner have stolen more money from Americans than probably anyone in American History. Hello Occupy……Wake up.
Report Post »Maidoff101
Posted on December 3, 2011 at 7:39amThis is only for show, Corzine is friendly with the very people asking questions. Wonder How many of these great Investigators “Shared” Insider information with Corzine over the Years? My guess He will plead the Fifth through his Attorney, and drag this out till the day He Dies. The only People who get screwed will be The Investors, and theTaxpayers. once again!
Report Post »GLENNONALL
Posted on December 2, 2011 at 6:40pmI hope that all of his friends at MSNBC invested with MF
Report Post »Collbuzz
Posted on December 4, 2011 at 10:05pmHEE HEE! That would be heeeeeelarious! I hope you are right.
Report Post »wbalzley
Posted on December 2, 2011 at 4:59pmPOLL: What does everyone here think of the National Emergency Employment Defense (NEED) Act of 2010? The primary thrust of the bill is to take the issuing power away from the FED and return it to Congress. It also ends “Fractional Reserve Lending” and prevents banks from using depositors’ money to make investments…
What do you think?
Report Post »Bill Rowland
Posted on December 2, 2011 at 9:04pmSounds like a good idea to me. Give the treasury department the mint back, they should be in charge of all currency and subject to congressional oversight.
That was part of Treasurys job originally and should still be their responsibility and not the work of a bunch of bankers that we are not even allowed to know who they are.
OMG
Report Post »Texas_Tip
Posted on December 2, 2011 at 4:53pmThe House Agriculture Committee had to subpoena him. I’m sure Sen. Roberts (R-Kansas) would of loved to have had the Senate do the same. But IMO, there’s no way that Sen. Stabenow and the D’s have the ****** to subpeona one of their own. There was really no other recourse but have the House to do the subpeona.
Report Post »Too many of their farming constituents have been left out in the cold when the supposed 1.2 trillion in client funds could not be located immediately as it should of been. Derivatives need to have a clearinghouse. Those who used MF Global have been shutout.
This is not just procedural or sloppy bookkeeping with regards to MF Global finances. All being forgiven if and when the missing money is found. As the article stated, the co-mingling of client and company accounts is illegal. Again. The co-mingling of client and company accounts is illegal.
That the CFTC gave MF Global thumbs up in their October audit reeks. CFTC Gensler has already recused himself. Which means nothing forthcoming from Corzine’s one-time pal.
Although it very well may be a 5th Amendment run around, the subpeona of a former U.S. Senator is something of an eye-opener itself. So it will be very interesting to watch the hearing.
Mil Mom
Posted on December 2, 2011 at 11:07pmJust sounds like an average day for either bernake or geithner. Nothing to see here, nothing new, we all do it in the senate. So do you in the house, (Remember the House Bank and the House Post Office?)
Report Post »Frankly don‘t see why he didn’t just go to his good friend dirty harry when he got in trouble, I‘m sure he had a friend who’d have let him put it all on blue and let it ride until he could rake it back in!
mrsalvage2
Posted on December 2, 2011 at 3:46pmI have chosen not to care much about this more of the same.
When Lehman Brothers went down, it was becasue JP morgan withheld tens of Millions Lehman had on deposit at that time. They just stalled and look what happened.
They probably did the same to Johnny boy.
Well, he is a Senator, so who can have sympathy?
If they did this to Johnny boy;s money, what will they do with Barneey’s.
He is leaving the country. I would if I were him.
Report Post »Morris
Posted on December 2, 2011 at 5:04pmGive this Dictator Obama Fundraiser, a cell next to Ernie Madoff,Another fat cat that should be put away for good!
The GREED of these people makes me sick!
We did hear that Corzine was going to take the“ FIFTH”?????????????
So what will Dictator Barack Hussein Obama do for Corzine????????????
Watch and see America?????
Impeach Dictator Barack Hussein Obama,Get Rid of all of these SOBS,Them with all of their Corruption,
Incompetence and Greed,Must all be sent to HELL!
Impeach Dictator Obama,Save our Republic our America!
Report Post »Anonymous T. Irrelevant
Posted on December 5, 2011 at 9:19amWhat did Ernie do to land in jail? :-)
Report Post »South Philly Boy
Posted on December 2, 2011 at 3:26pmHe NEEDS to go to JAIL and he can take a bunch of his Liberal DemonCrates friends with him
Report Post »lovemynation
Posted on December 2, 2011 at 3:19pmNothing new here, is there? Like the disappearance of the $3 Trillion of the Soc.Sec. funds “borrowed and spent” by our own gov’t, or the $500 Billion cut from Medicare to use in the Obama/Hillary Healthcare takeover, or even the states that raided and spent the workers pensions like Wa state gov’t did, The ends justify the means, according to the liberal lefties. Corzine is obama’s greatest advisor. Nothing will happen to him, just like nothing has happened to Wall St.,Fannie or Freddie, or even our so called “elected” politicians, who helped Wall St. do what they did in the “tsunami” of greed. And like so many of our “elected”, the behaviors of Corzine and his firm will be excused by the investigators. Its just another example of our leaders putting more shame and disgust on the name of their positions. No wonder Leke Wallensa said that the world could no longer look to America for truth, honesty, content of character or anything else, now that so many in gov‘t and elsewhere are as greedy and corrupt as most of all the other gov’t powers in the world. And we have to admit, our elected have put alot of shame on their positions from both their actions and words.
Report Post »V-MAN MACE
Posted on December 2, 2011 at 3:29pmWhatever happened to criminal charges and arrests for crimes like this?
Subpoenaed?
Puhlease.
They’re all criminals up there in Washington.
Report Post »Bonnieblue2A
Posted on December 2, 2011 at 3:12pmhttp://geraldcelente-blog.blogspot.com/2011/11/your-money-in-banks-is-not-safe.html
Report Post »packsack54
Posted on December 2, 2011 at 3:59pmAmen, great info, like I said nothing but LCT’s. Be prepared and keep your powder dry.
Report Post »Ron Staiger
Posted on December 2, 2011 at 3:07pmAnother thieving democrat- what else is new?
Report Post »Bonnieblue2A
Posted on December 2, 2011 at 3:05pmThis post comes from Gerald Celente’s comments over on “The Hill”. Mr. Celente is the most outspoken victims of Corzines theft from his account:
I Got Effed by MF Global.
Who’s Going to Eff U?
by Gerald Celente
“KINGSTON, NY, 28 November 2011 — The MF Global bankruptcy has more far reaching implications than are currently being acknowledged. Not simply an isolated instance of corporate mismanagement resulting in disastrous and irreparable effects on options and commodity futures markets, the MF bankruptcy – the eighth-largest in US history – is a harbinger of much worse to come.
Don‘t be taken in by today’s stock market bounce that’s based on the belief that Europe is coming closer to resolving its debt crisis, and that strong US Black Friday retail sales are a sign recession has been averted.
The European debt crisis is a long term trend with no quick fixes. And the retail surge is no more than a flash mob spending spree hyped by a corporate media. The more they hype it and the more consumers spend, the more advertising space the media sells to retailers
The MF meltdown, however, is symptomatic of a global economic system on the verge of collapse. No financial sector will escape unscathed: banks, brokerages, hedge funds, insurance companies, stocks and stock markets are all at risk.
Do you know where your money is? Will you get it back? Are you prepared?
When the evidence is pieced together, it proves how corrupt, bankrupt and dishonest
Report Post »Julio
Posted on December 2, 2011 at 2:42pmHere is the complete explanation and how Jon Corzine is a CRIMINAL.
Ann Bernhardt is awesome.
http://www.financialsense.com/financial-sense-newshour/guest-expert/2011/12/01/ann-barnhardt/entire-futures-options-market-destroyed-by-mf-global-collapse
Report Post »Brents Torts
Posted on December 2, 2011 at 2:25pmWhere was the SEC? Oh yeah, it was to busy taking it up the back side.
Report Post »Bonnieblue2A
Posted on December 2, 2011 at 2:34pmThe SEC is the fox watching the chicken coop. The CME along with MF Global/Jon Corzine have destroyed farmers hedging their crop storage/sales to purchase grain for next year’s planting. What happens when these farmers cannot make margine because the funds have been stolen from their accounts? Is their farmland then foreclosed upon and does Goldman-Sachs swoop in like a vulture to gorge itself on the remains? Is there really a coincidence that this happened at a time when Midwest cropland is selling at all time highs?
Corzine needs a perp walk ASAP. Confiscate his passport if he has nor already left the country. Put hi on the no-fly list until the warrant for his arrest is served!
THIS is what OWS should be protesting!
Report Post »Krazy_Kreepy_Ketchup
Posted on December 2, 2011 at 2:22pmAnd this guy is the hero of the left and unions in the NY/NJ metro area. If it was a republican this would be on the mainstream news 24/7. Morning joe douchebag would be calling for his public hanging and Al Sharpton would be marching in the streets screaming “racism” somehow while piglet Pelosi sheds a fake tear…
I genuinely hope that the OWS “leadership” (Unions/Van Jones/etc.) hiccups this winter and the anger turns on these punks in Washington. The useful idiots are itching to burn cities to the ground. If only their anger could be turned toward D.C.
Wishful thinking.
Report Post »westfayetteville
Posted on December 2, 2011 at 2:12pmThe shame of all this is nothing will happen, except wasting more money holding these hearings
Report Post »HumbleMan
Posted on December 2, 2011 at 2:15pmIf he’s done what it appears he has done, he deserves handcuffs and a nice orange-suit. I pray it will happen. The list of politicians who deserve prison is long and un-distinguished.
Report Post »wbalzley
Posted on December 2, 2011 at 5:02pmDo you know anything about the National Emergency Employment Defense (NEED) Act of 2010’’? It would end “Fractional Reserve Lending” and prevent banks from using depositors’ money to make investments. Would this prevent such events from happening?
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