The New York Times’s James Stewart provides excellent details from the MF Global Trustee report that corroborates in part my speculative narrative on Corzine’s actions in the last week before his firm’s bankruptcy last Fall.
Stewart concludes his story saying, “a comparatively low-level employee like Ms. Edith O’Brien should never have sole authority to tap segregated customer accounts.” Crucially, however, Stewart had already reported that Ms. O’Brian hardly had any authority at all, as she had reluctantly followed her superiors’ orders:
Ms. O’Brien, who had to approve such transfers, was also worried about the firm’s growing liquidity needs and where the cash would come from. “Why is it I need to spend hours every day shuffling cash and loans from entity to entity?” she wrote in an e-mail in August, describing the process as a “shell game.”
After tapping customer funds on October 26, 2011 for an intra-day loan to meet margin requirements to JP Morgan, this relatively junior treasurer was left in the dark and terribly exposed.
The funds weren’t returned by the end of the day, which caused “panic” in Ms. O’Brien’s operation, according to the report. Ms. O’Brien demanded, in an e-mail, to know when the funds would be returned, adding in capital letters: “I NEED TO KNOW NOW.”
Corzine reportedly personally told JP Morgan that the firm’s use of segregated customer funds on October 28, 2011 was proper. Yet on October 29, the very next day, O’Brien pointedly refused to sign a letter to JP Morgan certifying that the customer funds were properly used, in direct contradiction to Corzine’s representation.
The Trustee for MF Global has yet to file civil or criminal charges. Ms. O’Brien, rightly it seems, pleaded the 5th Amendment to avoid self-incrimination during Congressional testimony.
Based on the Trustee report, O’Brien appears to be a person who knew where the criminal line was, and refused to cross it. Corzine? Unclear.
Here’s the depressing problem though: Who will be made to pay the price? Corzine the CEO, Senator, and Governor? Or O’Brien, the Assistant Treasurer?
Please also see my earlier post Arrest Jon Corzine Now
 A Chicago-based assistant Treasurer
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