Jon Corzine Personally Pushed Big MF Global Bets

Jon Corzine, former CEO of MF Global, takes the oath prior to testifying before the House Agriculture Committee about the bankruptcy of MF Global on Capitol Hill in Washington, DC, December 8, 2011. Corzine said in remarks prepared for US lawmakers Thursday he does not know what happened to some $1.2 billion that disappeared from now bankrupt MF Global. In prepared testimony, Corzine -- once US senator, the governor of New Jersey, the head of Goldman Sachs and later MF Global -- apologizes to investors and claims he cannot account for the loss of "many hundreds of millions of dollars." "I simply do not know where the money is, or why the accounts have not been reconciled to date," he said in the remarks.    AFP PHOTO / Saul LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
Corzine before Congress. Photo: Saul Loeb/AFP/Getty Images

A New York Times investigation into the MF Global tenure of former U.S. senator, New Jersey governor, and Goldman man Jon Corzine concludes that the CEO "played a much larger, hands-on role in the firm’s high-stakes risk-taking than has previously been known." Upon Corzine's first visit to the company's Chicago offices, he asked a broker excitedly, "How are you making money on side bets? What else are you guys doing to make money here?" Corzine eventually upped the ante at the "miniature Goldman Sachs," and brought the whole thing down:

He pushed through a $6.3 billion bet on European debt — a wager big enough to wipe out the firm five times over if it went bad — despite concerns from other executives and board members. And it is now clear that he personally lobbied regulators and auditors about the strategy.

His obsession with trading was apparent to MF Global insiders over his 19-month tenure. Mr. Corzine compulsively traded for the firm on his BlackBerry during meetings, sometimes dashing out to check on the markets. And unusually for a chief executive, he became a core member of the group that traded using the firm’s money. His profits and losses appeared on a separate line in documents with his initials: JSC.

Sounding like a true gambling addict, Corzine defended his moves at a Congressional hearing last week: "As of today, none of the foreign debt securities that MF Global used has defaulted or been restructured," he said. "There actually were no losses." Technically he's right, and Corzine has not been accused of wrongdoing. But as the Times notes, "Some $1 billion in customer money remains missing and thousands of clients, including small farmers in Kansas or hedge funds in Connecticut, still do not have nearly a third of their funds." Signed, JSC.