Corzine quits MF Global as inquiries begin

Nov. 4, 2011 at 2:47 PM
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NEW YORK, Nov. 4 (UPI) -- MF Global Chairman and Chief Executive Officer Jon Corzine resigned Friday, but said he would help regulators sort out the firm's financial mess.

"I feel great sadness for what has transpired at MF Global and the impact it has had on the firm's clients, employees and many others," Corzine said in a statement.

"I intend to continue to assist the company and its board in their efforts to respond to regulatory inquiries and issues related to the disposition of the firm's assets," The New York Times quoted him as saying.

The firm filed for bankruptcy this week amidst allegations $633 million in client money is missing. The controversy derailed a potential sale of the company, the Times said. When the deal fell apart, MF Global filed for Chapter 11 protection.

The firm is now under investigation by the Securities and Exchange Commission, the Justice Department and the Commodity Futures Trading Commission.

The Wall Street Journal reported for seven consecutive quarters, MF Global's quarterly records showed short-term borrowings were 16 percent lower when reported than the average borrowing for the quarter.

The reporting strategy is known as "window dressing." Funds are shifted just before the quarterly report snap shot of the firm is taken -- the data the public sees.

In this case, it appears MF Global was taking more risk than shareholders knew about, including making large bets on European debt.

Corzine, a former governor of New Jersey and a former director at Goldman Sachs, who returned to Wall Street in 2010 after a failed re-election campaign, has not been accused of any wrongdoing.

However, he has reportedly hired high-profile criminal defense lawyer Andrew Levander, the Times said.

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