Former NJ Gov. Corzine Might Pay $5M Out of Pocket to Settle MF Global Charges

By:
Chris Gaetano
Published Date:
Oct 7, 2016
By flickr user Tony the Misfit - http://www.flickr.com/photos/tonythemisfit/2406160427/, CC BY 2.0

Former governor of New Jersey Jon Corzine, is currently negotiating a settlement with the Commodity Futures Trading Commission (CFTC) over his role in the collapse of the brokerage firm he headed, MF Global, which the CFTC has insisted must come from his own pocket, according to CNBC.

MF Global collapsed in 2011 amid massive liquidity issues that began years earlier. An investigation found that the company had transferred hundreds of millions of dollars in customer funds into broker-dealer accounts in order to cover trading losses, a situation that ultimately led to more than a billion dollars in losses for its customers when the company went bankrupt. 

While Corzine has not been found liable for any criminal charges, the CFTC has faulted him for failing to diligently supervise the firm as it engaged in improper transfers. The commission also argued that he was liable for the actions of lower-level employees due to the control person liability provision, according to CNBC. For this, the former governor might pay $5 million. While the negotiations are ongoing, the CFTC wants to make sure whatever Corzine pays, it comes directly from his own accounts, versus insurance money, as is more common in such cases. 

 

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