not too big to fail

Jon Corzine Resigns, Won’t Take More Millions From Failing Firm

The CEO of MF Global, the securities firm that filed for bankruptcy on Monday, resigned this morning, and has opted not to accept his $12.1 million severance package, probably quite appropriately considering the role he had in the company’s failing. Jon Corzine, the former New Jersey governor and Goldman Sachs CEO, said in a statement today that he feels “great sadness about what has transpired at MF Global and the impact it has had on the firm’s clients, employees and many others.” Employees, of course, are basically out of a job, while about $630 million in client funds is still missing, drawing the suspicious eyes of the FBI and federal regulators. To keep things extra cozy, the man leading those regulators, Gary Gensler, head of the Commodity Futures Trading Commission, worked closely with Corzine at Goldman Sachs, and eventually even worked for him.

Republican Senator Charles Grassley of Iowa noted the buddy-buddy relationship of the investigator and the investigated yesterday and said that “it’s hard to see how the chairman could be completely objective in looking out for wronged investors when he has such strong ties to the principal of the failed firm.”

Corzine, who pushed his firm to make risky trades on European debt, eventually spreading it too thin, was simultaneously insisting that regulators not tighten their rules. One rule in particular, DealBook reports, “would have restricted a complicated transaction that allowed MF Global in essence to borrow money from its own customers.” Corzine personally fought the regulation, and he won.

Along with bowing out from the firm, Corzine has now hired Andrew J. Levander, a prominent criminal defense attorney.

Former NJ governor Corzine steps down from collapsed MF Global, rejects $12M severance package [WP]
As Regulators Pressed Changes, Corzine Pushed Back, and Won [DealBook/NYT]

Jon Corzine Resigns, Won’t Take More Millions From Failing Firm