Jon Corzine’s Troubles
Former New Jersey senator and governor Jon Corzine, former Goldman Sachs CEO and MF Global CEO, finds himself now in a heap of trouble. Here is a (partial) list of Corzine’s troubles.
- MF Global, headed by Jon Corzine, has filed for bankruptcy protection, apparently because of holdings of European debt. This bankruptcy will likely be one of the ten largest bankruptcies ever.
- Regulators are investigating whether hundreds of millions of dollars are missingfrom MF Global client accounts.
- Corzine is the target of an FBI investigationinto the handling of hundreds of millions of dollars invested in his securities firm.
- When Corzine returned to the securities business, he did so without requalifying or registering, as required by the Financial Industry Regulatory Authority (FINRA), who apparently waived the requirement.
- Months before MF Global went bankrupt, federal regulators sought to reduce the types of risky trades that contributed to the firm’s collapse, but they faced opposition from Jon Corzine.
- MF Global urged a federal agencyto allow futures firms to invest funds from their customer segregated accounts in foreign sovereign debt.
- MF Global’s comment letter (to the Commodities Future Trading Commission [CFTC]) is just one of several communications it had with federal agencies over implementation of the Dodd-Frank financial reform law.
- CFTC Chairman Gary Gensler says he withdrew from an investigation of Jon Corzine’s collapsed securities firm to avoid being a “distraction.” Gensler worked for Corzine when they were both at Goldman Sachs. A former Corzine staffer, Steven Adamske, currently serves as the CFTC public affairs director.
- When Corzine ran for New Jersey Governor, Gary Gensler gave $10,000 to the N.J. State Democrat Party that was trying to get Corzine elected.
Corzine’s and MF Global’s Political Contributions
MF Global employees, since 2007, contributed $408,000 to federal candidates and political parties, including $38,000 to President Barack Obama, the largest recipient of MF Global employee contributions. During the 2008 election, Democrats received 68 percent of MF Global employees’ contributions. But after Corzine joined in 2010, employees contributed 97 percent of MF Global-related campaign contributions to Democrats. Democrats maintained that advantage, with about 94 percent of MF Global employee donations through June, 2011. Jon Corzine and his spouses have given more than $917,000 to Democrat federal campaigns and state political parties during the last two decades. A supporter of Obama, Corzine fund-raised for Obama during his 2008 presidential campaign, and has leaned on his moneyed friends and connections to bundle about $500,000 so far for Obama’s 2012 run.
What Do Corzine’s Financial and Legal Troubles Mean To Obama?
President Obama referred to Corzine as ‘our guy on Wall Street’ at a meeting of Democrat governors in Chicago in 2008. Corzine has also played a “Central Role” in Obama’s Wall Street fundraising efforts, but that role is now threatened by his financial troubles. A list of top “bundlers” put Corzine in the highest category, reporting that he had raised more than $500,000 for the Obama campaign, with a big part coming from a $35,800 per ticket fundraiser that Corzine hosted at his wife’s Fifth Avenue apartment. The event was advertised as part of an effort by Obama’s campaign team to reach out to rich Wall Street donors who had been put off by some of his policies and comments. A few months after that fund-raiser MF Global surprised many Wall Street investors by issuing securities notes that highlighted Corzine’s close relationship with the White House. The notes, which promised to pay an extra 1% if Corzine departed, suggested that the former New Jersey governor might be in line for a top administration post should the president get re-elected. Corzine was one of the leading Wall Street fundraisers for President Obama’s campaign.
