If GW can prosecute pal Ken Lay, why can't Obama go after Corzine?
Charlie Gasparino with the scoop late yesterday.
In the days following MF Global’s stunning implosion last year, a senior executive at the firm made a startling concession to investigators looking into both the company’s demise and the loss of more than $1 billion in customer money, according to people with direct knowledge of the matter.
MF Global’s chief financial officer for North America, Christine Serwinski, told investigators that her boss, MF Global’s chief executive, Jon Corzine, was well aware of the use and possible misuse of the customer funds during the firm’s final days, and as a result, Corzine should end up in “jail,” these people add.
Serwinski’s initial account of MF Global’s bankruptcy -- and who might be to blame for the loss of $1.6 billion in customer funds -- has yet to be disclosed, and could add a new dimension to the year-long federal investigation into the firm’s implosion.
Several congressional committees investigating the firm’s bankruptcy and the possible misuse of customer money are also aware of Serwinski’s initial account of who might be responsible for the missing funds, these people say.
Records show that MF Global started dipping into the customer accounts in late of October of last year after disclosing that under Corzine’s direction the firm had made an outsized bet on the debt of troubled European countries, namely Italy and Spain. With that, lenders began pulling lines of credit and refusing to trade with the firm.
Within a matter of days, MF Global was forced to sell itself or face imminent bankruptcy liquidation. A last-minute sale to Interactive Brokers fell apart when MF Global couldn’t account for around $1 billion in customer funds, forcing its bankruptcy filing on October 31 of last year, and subsequent liquidation.
Such a loss of customer funds is a nearly unprecedented event at major Wall Street firms. When Bear Stearns suffered a similar fate at the beginning of the 2008 financial crisis, customer brokerage money was kept segregated and safe.
At least one regulator, Terrence Duffy, the chairman of the CME, has said the firm’s actions involving customer funds broke the law.
One potential witness, Edith O’Brien, MF Global’s assistant treasurer, is seeking an immunity deal in exchange for her testimony.
In July of 2011, she told senior management in a memo that “utilizing…the client asset (base) should not be a (broker dealer) working capital source strategy to be relied upon,” according to the Trustee report.
The report added that on August 3, Serwinski’s direct supervisor, CFO Henri Steenkamp, told Serwinski that he was addressing her concerns about the use of customer money. The report said Steenkamp said he “walked Jon [Corzine] through” the regulations involving the use of customer funds.
Now We Know Which Senior MF Global Employee Told Investigators That Jon Corzine Had Direct Knowledge Of Customer Funds Being Stolen