Jon Corzine Agrees to Personally Pay $5M for Role in MF Global Collapse

By:
Chris Gaetano
Published Date:
Jan 9, 2017
By flickr user Tony the Misfit - http://www.flickr.com/photos/tonythemisfit/2406160427/, CC BY 2.0

Former New Jersey Governor Jon Corzine has agreed to pay the Commodity Futures Trading Commission (CFTC) $5 million of his own money for the role he played as CEO in the collapse of trading firm MF Global, according to Reuters.

The CFTC said that the former governor failed to properly supervise employees who were handling customer funds. Under his watch in 2011, the trading firm faced significant liquidity issues from a combination of margin calls, credit rating downgrades and a big gamble on European sovereign debt. In order to cover these losses, the firm transferred nearly a billion dollars of customer funds into broker-dealer accounts instead of keeping them separate, which contributed to the loss of more than $1.6 billion for investors when the company ultimately went bankrupt.

While Corzine and other firm executives last year already agreed to a $132 million settlement with a trustee who was liquidating the company on behalf of creditors, as well as $64.5 million settlement of separate investor litigation, the former governor must pay the $5 million fine personally. This means the money cannot come from the company, or from insurance. It must come from his own personal accounts. 

A 2011 article in Fox Business News noted that while Corzine's net worth at one point was close to a billion dollars, after self-funding his Senate run, then his gubernatorial election and re-election campaigns, combined with losses from MF Global's aforementioned difficulties, it is likely far less today. Despite this, one would be hard pressed to call him "poor" or even merely "upper-middle class," as experts cited in the article estimated he was still worth roughly $53 million. 

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