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Jon Corzine Settles Over MF Global Collapse: Agrees To Lifetime Ban, $5 Million Fine

Friday, January 6, 2017 7:47
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from ZeroHedge:

Three years ago, in February 2013, traders were outraged upon learning that the National Futures Association refused to ban former MF Global chief Jon Corzine from trading with other people’s money, rejecting a motion brought before that body’s board of directors to do so. The decision was a blow to a vocal group within the commodities trading world who – noting that Corzine has not been held accountable by the government for alleged crimes – wanted to see him publicly upbraided by his peers in the market.

All that changed today when Corzine agreed to pay a $5 million civil fine to settle a lawsuit by the U.S. Commodity Futures Trading Commission over the 2011 collapse of the former New Jersey governor’s brokerage, MF Global Holdings. More importantly, under the settlement disclosed on Thursday, Corzine also agreed to be barred for life and never again work for a futures commission merchant, or register with the CFTC in any capacity.

Which means Corzine’s dreams of running a hedge funds are now over.

“I am pleased to have reached this settlement to resolve the CFTC’s claims,” Corzine, 70, said in a statement. “As the CEO of MF Global in 2011, I have accepted responsibility for its failure, and I deeply regret the impact it had on customers, employees, shareholders and others.”

The CFTC alleged Corzine failed to fix inadequate controls that led to $1 billion in missing customer funds and knew of the New York-based firm’s extreme cash shortage. The agency also said he didn’t ask questions about the origins of funds used to make transfers that he had ordered. Corzine previously said he never directed the misuse of customer funds to help his firm stay afloat as it dealt with margin calls on bad bets in 2011 as Bloomberg notes. He testified to Congress that he asked that overdrafts with JPMorgan Chase & Co. be corrected. In 2013, MF Global’s brokerage unit was fined $100 million by the CFTC and admitted regulatory failures.

Edith O’Brien, MF Global’s former assistant treasurer, agreed to pay a $500,000 civil fine and accept an 18-month ban to settle related claims.

Thursday’s settlement resolves the last piece of litigation against Corzine stemming from MF Global’s Oct. 31, 2011 bankruptcy.

Read More @ ZeroHedge.com

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