U.S. Congress panel blames Corzine for MF Global fall
November 15, 2012 10:42 AM EST
Poor management decisions by MF Global former CEO Jon Corzine triggered the brokerage firm's collapse, while lax protections for customer funds contributed to the loss of an estimated $1.6 billion of customer money, U.S. congressional investigators have determined.
Evidence unearthed by the House Financial Services Subcommittee on Oversight puts the blame squarely on Corzine, the panel's chairman, Rep. Randy Neugebauer, said in a preview of the report that will be released on Thursday.
"The responsibility for failing to maintain the systems and controls necessary to protect customer funds rests with Corzine," the report says. "This failure represents a dereliction of his duty as MF Global's chairman and CEO."
A Corzine spokesman on Wednesday said: "While we have not yet been able to review the whole report, it is worth noting that ... the House Subcommittee apparently did not find any evidence that Mr. Corzine acted in bad faith or engaged in any intentional wrongdoing."
MF Global filed for bankruptcy more than a year ago, as investors scrambled to pull out funds after revelations the firm bet heavily on European sovereign debt and after credit downgrades.
Regulators, prosecutors and lawmakers have been looking into the estimated $1.6 billion in customer funds missing after the firm's collapse.
The House subcommittee said it has held three hearings, interviewed more than 50 witnesses and reviewed thousands of documents from MF Global, its regulators and other sources.
The report will show that risks were exacerbated by an atmosphere at the firm in which no one could question Corzine's decisions, the subcommittee said.
Corzine's spokesman said MF Global's significant business decisions were all subject to review by its board.
Corzine also kept his own trading activities out of the firm's risk management review process, the subcommittee said. The group said it also found that regulatory agencies had not shared crucial information with each other, and other problems.
A trustee liquidating the company's broker-dealer unit released a critical report in June that said that in his attempt to build the firm into a global investment powerhouse, Corzine failed to address growing liquidity needs.
(Reporting by Karey Wutkowski, Sarah N. Lynch, Emily Stephenson and Aruna Viswanatha; Editing by John Wallace, David Gregorio and Dan Grebler)
Most Popular Slideshows
- Prince William & Kate Middleton Caught Flirting In A Countryside Dinner Date [PHOTOS]
- Kate Middleton’s Mom Accused Of Being A Social Climber, Prince George Not Seen By Relatives
- 2014 US Open: Hottest Female Tennis Athletes [PHOTOS]
- Prince William & Kate Middleton Boards London Train in Casual Disguise, Royal Couple’s Incognito Plan A Huge Hit [PHOTOS]
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- 5.5-Inch iPhone 6 is iPhone Air on Sept 19 Release Date: 5 Things to Consider Before Buying
- Pricey iPhone 6 on Release Date Likely but with 3X Retina Resolution & Mobile Payment Service – Reports
- Nexus 6 Release Date Update: Moto X+1 Look Leaked, Nexus X or Shamu Moved to Demo Phase
- Google Nexus 8 Confirmed as HTC T1 aka Volantis/Flounder with Freshly-Leaked Specs & Features – Reports
- HTC One M8 for Windows Vs. Nokia Lumia Icon, The Battle Of Windows Phones
- Europe, US Next on ISIS’ Hit List, Says Saudi King; Seized ISIS Laptop Reveals Terrifying Bio-Warfare Plans
- iPhone 6 On Release Date To Feature Qualcomm MDM9625M LTE, 1GB RAM, Mobile Payment Deal With AMEX, 1334x750 Display