MF Global's former CEO, Jon Corzine’s game plan on European Bonds highly failed pushing the firm to file for Chapter 11 bankruptcy protection. About $1.2 billion of MF Global’s customer money was unaccounted for when the company collapsed of which $ 175 Miliion of customer account went missing.
Investigation on the missing hundreds of millions of dollars in customer funds is been carried out by Federal investigators. They are probing if the customer money was raided by the futures brokerage to try to contradict an insolvency crisis, a major breach of industry rules. It is suspected that Jon Corzine knew where the missing money was.
Terrence Duffy’s Allegations
In a hearing before the Senate Committee on Agriculture, Nutrition and Forestry, CME Group Inc. Executive Chairman Terrence Duffy, contradicting Corzine’s testimony, told the senate panel, “The information is fourth-hand but is the strongest statement yet from a regulator that Corzine knew before Oct. 30 about a transfer of $175 million in the form of a loan to a European affiliate of MF Global.”
“Mr. Corzine was aware because our employee had heard this, on the phone—‘Send back 175’ — and said he was aware of this loan,” Duffy told the Senate committee.
Testimonies By Jon Corzine, Bradley Abelow & Henri Steenkamp
Jon Corzine testified that he didn't know any customer money was missing until Oct. 30, the day before MF Global became the eighth-largest bankruptcy in U.S. history. About $1.2 billion of customer money was unaccounted for when the company collapsed. Bradley Abelow, president and chief operating officer of MF Global Holdings, the brokerage’s parent company, and Henri Steenkamp, chief financial officer of the holding company were together with Jon Corzine before the congressional committee.
If Corzine is found to have lied in his testimony before multiple congressional committees, he could be prosecuted.
Last Thursday before the House Agriculture Committee, Corzine was himself very confident, though less forthcoming. He also wanted to distance himself from statements he made last week about how customer funds may have come up missing in the first place.
All three witnesses said they do not know where the missing money was. Yet their phrasing varied in subtle ways which could further lead to legal dissimilarities.
Jon Corzine stated Tuesday, "I never directed anyone at MF Global to misuse customer funds, I never intended to (direct anyone to misuse customer funds) and as far as I am concerned I never said anything that could be misconstrued."
Abelow commented that he did not recall "any conversation about customer funds being used for anything other than their intended purpose."
Steenkamp's stand on the issue was more wide and extensive. He said he did not "authorize, approve or know of any transfers of customer funds" out of their accounts.
The European debt wasn’t listed on MF Global’s balance sheet. In fact the firm shifted those holdings to its off-balance sheet far for all to see. A lawyer taking care of the insolvency of MF Global's brokerage operations for the trustee said in court Friday that there were some suspicious trades in the last days before the firm failed, were discovered in MF Global customer accounts.
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