Another Corzine Rant

One last rant, and then I’ll rest a while on MF Global and Jon Corzine.[1]

Yesterday’s news[2] pointed out the regulators’ problem that only Corzine, and not his Treasury department subordinates like Edith O’Brien and Henri Steenkamp, had registered as professionals subject to the Commodity Futures Trading Commission (CFTC), the primary regulator of a trading shop like MF Global.  The CFTC could more easily sanction registered members of MF Global for negligence, without having to prove criminal intent,[3] but only Corzine (of those 3) is registered and therefore subject to sanctions.

This matters, and it doesn’t matter.

This matters because it potentially focuses the CFTC’s main firepower on the top, where it should aim.  If anyone is to be responsible for a $1.6 Billion customer money ‘misplacement,’ that person should be the one in line for the $12.1 million severance package.[4]

It doesn’t matter because Corzine should always be the main focus of any regulatory probe in the first place.  Not only is he the relevant figure in the enterprise, but as I explained earlier, his subordinates could not credibly have acted on their own to commingle customer funds to satisfy margin requirements.  I just don’t believe it.


Please also see Arrest Jon Corzine Now

and Update on Jon Corzine by the MF Global Trustee

[1] At least until he’s arrested, or proven innocent.

[2] Sorry, it may be behind a pay wall, but I’ll summarize for you.

[3] This is somewhat analogous to OJ Simpson losing his civil case to the family of his murdered wife, while remaining ‘innocent’ in criminal court.  The standards of proof are WAY easier.

[4] Which Corzine declined following the bankruptcy filing of MF Global, to his credit.  But still.

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I founded Bankers Anonymous because, as a recovering banker, I believe that the gap between the financial world as I know it and the public discourse about finance is more than just a problem for a family trying to balance their checkbook, or politicians trying to score points over next year’s budget – it is a weakness of our civil society. For reals. It’s also really fun for me.

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