In a stunning fall from grace, a New York federal court has barred Jon Corzine from participating in any way in a firm which is a Futures Commission Merchant (FCM).
Corzine, the former Goldman Sachs Chief Executive Officer (CEO), New Jersey Governor, and CEO of MF Global, was ordered by a consent order from a federal court to pay $5 million in restitution along with agreeing that “he will never act as a principal, agent, officer, director, or employee of a Futures Commission Merchant (FCM) and that he will never register with the CFTC in any capacity,” according to a press release from the Commodities Futures Trading Commission (CFTC).
The stunning move ends, effectively, the financial career of Corzine, who was once one of the most powerful people in financial services.
Corzine spent more than a quarter century at Goldman Sachs, becoming CEO in 2004, before giving up the post to run for Governor of New Jersey.
After an uneven term as New Jersey Governor, he got back into financial services as head of MF Global, the global trading firm, in 2010.
In 2011, scandal hit MF Global, as it was revealed that the company illegally tapped more than a billion dollars in customer funds to try and cover losses in its own trading accounts and then using bogus accounting tricks to cover that up.
Corzine was unceremoniously removed from the company which folded shortly thereafter.
The CFTC has charged Corzine civilly for his role in the scandal, and according to the CFTC press release, this consent order arises out of that complaint.
“The Orders arise out of the CFTC’s amended Complaint, filed on December 6, 2013. The Corzine Order finds that Corzine was the CEO of MF Global from September 1, 2010 through the commencement of its liquidation proceedings on October 31, 2011 as well as the CEO and Chairman of the Board of Directors of its parent company Holdings.
“The O’Brien Order finds that she supervised MF Global’s Treasury Department, which handled the cash management of MF Global, and was responsible for directing, approving, and/or causing certain wire transfers and other payments into and out of MF Global’s customer accounts. Both Orders find that, during the last week of October 2011, in violation of U.S. commodity laws, MF Global unlawfully used nearly one billion dollars 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 withdrawals of secured customer funds.
Of the order, Aitan Goelman, the CFTC’s Enforcement Director, stated: “This resolution demonstrates the importance that the Commission attaches to customer protection, which has long been a hallmark of our mission.”