Jon Corzine, the former head of bankrupt broker-dealer MF Global, has received some bad news.
The New York Times reported that the Commodity Futures Trading Commission has sued Corzine, a former U.S. Senator as well as one-time Governor of New Jersey, for failing to prevent a lower-level employee from transferring client money to bank and clearinghouses that led to the collapse of MF Global.
The agency also sued MF Global assistant treasurer Edith O’Brien, who was responsible for overseeing the transfer of customer money from the firm’s Chicago office.
According to a previously eVestment article, MF Global lost $1.2 billion of customers' money in 2011 following a bet on short-term European sovereign debt, maintaining a net long position of $6.3 billion in a portfolio that includes Belgium, Italy, Spain, Portugal and Ireland.
If found guilty, Corzine and O’Brien could face fines, and possibly a ban from the industry.