Corzine's Brokerage Firm May Have Screwed Customers Out Of $1.2 Billion

It was earlier reported that MF Global, the brokerage firm formerly run by John Corzine, was entering bankruptcy with a shortfall of $593 million, or 11 percent of customer funds. Now it seems the shortfall is a tad higher—somewhere in the neighborhood of $1.2 billion, double previous estimates. A billion here, a billion there, and pretty soon you're talking real money!

It's unclear what's behind MF Global’s earlier lower estimates, or where the other $700 or so million went. The Times reports that "authorities are still searching for the money, and are considering two possibilities. One is that MF Global used the money to meet trading partners’ demands for extra cash, which could come back. The other is that it was used to cover trading losses, which would be unrecoverable." Has anybody looked at how many pimped out cargo vans MF Global bought?

According to Business Week, James Giddens, the bankruptcy trustee, released a statement today saying that distributing 60 percent "of what should have been in customers' accounts will take $1.3 billion to $1.6 billion, or almost all of the assets he has within his control. While he expects the transfer will occur in early December, he doesn't have access to funds beyond $1.6 billion." The bankruptcy, which is estimated to be the eighth largest bankruptcy filing in U.S. history, came after the New York-based company revealed that it had made a $6.3 billion bet on European sovereign debt.

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By John Del Signore in News on November 21, 2011 1:57 PM

Comments [rss]

SonnyBobiche

Wasn't Corzine some sort of politician? The kind that overwhelmed his opponents with money, buying TV ads (because,if you see somebody on TV more than another that's who you should vote for)? From a certain party, if I remember. Something starting with a D.

Seems odd to leave it out.

rnrnys

The Gothamist is a far left website. They never eat their own.

Don't expect them to highlight that Corzine was a Democratic senator and then Governor of New Jersey and a feverent supporter and campaign donation bundler for Obama.

But then again given Corzine's history at Goldman Sachs and handling state finances as governor, you would have to be brain dead to invest with him. But people did.

And on top of all of this, he paid himself and exit payout of $12M. What hubris!

Don't be suprised if Corzine walks on this.

brooklynRick

So who is responsible here? All these jerks walk away with their fat paychecks?

MattyGC

"The other is that it was used to cover trading losses, which would be unrecoverable."

how many times does this have to happen before something is done about it? barings bank, society generale, now this...you can't cover bad positions with cutsomer funds...

AaronRed99

Vance is too much of a hack to actually enforce the law.

brooklynRick

Tru Dat.

m015094

I hope none of you were real estate purchasers/buyers during this time (1999-2007). If you were and you made a profit, congrats, you're part of the problem.

A 20% per year real esate bubble is unsustainable. Many people made money because of this. It was only the unlucky (and dumb) investors who are now bankrupt and/or owing more money on their mortgage than what it is worth.

Trustafarian

only dumb people lost money in real estate?

m015094

Yes, only dumb investors got in at the end when the market was already hyper-evaluated. Wall Street (the smart guys) had left months beforehand and/or were selling their stakes to the dumb investors.

Now, you may think that is wrong, but that is business.

Either way, the housing market was going to collapse. There is no way a $150K house should be worth $500K five years later.

Do you want blame for why this happened? If so, look at:

1. Gov't low interest rates (federal reserve)
2. Wall Street
3. Real estate brokers
4. Home buyers/sellers

Trustafarian

i don't disagree with you, and there is plenty of blame to go around. but there were plenty of regular people who lost their shirts through nothing more than bad timing. (and predatory lending, etc - but that's a different topic all together)