With his brokerage firm's troubles plastered on the front pages of the NY Times and Wall Street Journal, former NJ Governor Jon Corzine resigned from MF Global today. The company issued a statement saying that Corzine, who once headed Goldman Sachs, would not seek his $12 million severance. Which makes sense, since the firm filed for bankruptcy earlier this week and couldn't find about $700 million in funds. But was Corzine's decision hasty? Because now there are reports that the money has been found!
Bloomberg News reports, "An MF Global custodial account at JPMorgan contained about $658.8 million of client funds as of Oct. 31, according to one of the people, who declined to be identified because they weren’t authorized to speak publicly." Then again, while that's good news, MF Global's tactics are questionable. The WSJ reports, "For the past two years, MF Global Holdings Ltd. may have disguised its debt levels to investors by temporarily slashing the debt it was carrying before publicly reporting its finances each quarter, according to an analysis by The Wall Street Journal. The activity, referred to in the financial industry as "window dressing," suggests that the troubled financial firm was shouldering more risk and using more borrowed funds to facilitate its trading than investors could easily detect from the firm's regulatory filings."
And speaking of pesky regulations, the NY Times' front page story on Corzine has this tidbit: "Months before MF Global teetered on the brink, federal regulators were seeking to rein in the types of risky trades that contributed to the firm’s collapse. But they faced opposition from an influential opponent: Jon S. Corzine, the head of the then little-known brokerage firm... The agency proposing the rule, the Commodity Futures Trading Commission, relented. Wall Street, which has been working to curb many financial regulations, won another battle."
Corzine said in a statement, "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. 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." Yes, he's also hired a criminal lawyer, too.