Former NJ governor Jon Corzine spoke to Congress today, to clarify the remarks he made last week about the collapse of brokerage MF Global. The firm, which he headed until it filed for bankruptcy, happens to be missing $1.2 billion in client money, and senators wanted to know who authorized the transfer. And, for what it's worth, Corzine said it wasn't him!
Senator Debbie Stabenow (D-Michigan) asked her one-time Senate colleague, "Where's the money? How do you answer that? Where is the money from funds that were supposed to be kept separate?" and said, "This isn't the Dark Ages. MF Global didn't keep their books with feather quills and dusty ledgers. The rules about keeping customer money segregated are pretty straightforward. That it’s been over a month, and teams of lawyers and forensic accountants still can’t figure out what happened, raises very troubling questions."
Corzine, who previously was co-chair at Goldman Sachs and loves risky trading, told the Senate committee, "I never gave any instructions to misuse customer money, never intended to give any instructions or authority to misuse customer funds, and I find it very hard to understand how any one could misconstrue what I've said as a way to misuse customer money."
Of course, after MF Global's problems, the Commodity Futures Trading Commission voted "to limit how brokers invest clients’ margin in money market funds, and ban investments in foreign sovereign debt and in-house transactions such as repurchase agreements."