A federal court has ordered former MF Global CEO Jon Corzine, to pay a $5 million fine, levied by the Commodity Futures Trading Commission, for his actions in MF Global’s collapse after more than $1.2 billion in customer funds went missing after company executives move the money from segregated customer accounts in late 2011.
(To read the full settlement, click here)
The court also barred Corzine from seeking or accepting insurance reimbursement for the penalty. He is also prohibited from acting as a principal, agent, officer, director, or employee of a futures commission merchant and never again register with the CFTC in any capacity.
Corzine, a few former Governor of New Jersey and U.S. Senator, took over as CEO of MF Global in 2010. During the last week of October 2011, MF Global unlawfully used nearly $1 billion of customer segregated funds to support its own proprietary operations and the operations of its affiliates and to pay broker-dealer securities customers and pay FCM customers for withdrawls of secured customer funds. The CFTC started to notice shortfalls in customer accounts that initally were claimed as “accounting errors” that eventually to the CFTC finding the hundreds of millions of dollars of shortfall in customers accounts.
Kansas Senator Pat Roberts, Chairman of the Senate Ag Committee, held several hearings on the issue, released a statement on the court decision.
The Senator says he is pleased the CFTC used its powers to pursue certain civil remedies against Mr. Corzine and former assistant treasurer of MF Global, Edith O’Brien. He says he’s disappointed in the Justice Department’s failure to recommend criminal charges.
Edith O’Brien was ordered to pay a $500,000 penalty for aiding and abetting the violations.
The CFTC previously settled charges against MF Global and its parent forcing it to pay $1.212 billion in restitution to its customers, as well as a $100 million penalty. The CFTC says that restitution has now been paid to satisfy all customer claims.
Source: Marketwatch, Senate Ag Republicans, DTN