Jon Corzine’s MF Global investigated for missing millions

Will Rahn | Senior Editor

MF Global, a major financial derivatives broker run by former New Jersey Governor Jon Corzine, is being investigated by regulators after millions of dollars of customers’ money disappeared in recent days, the New York Times reports.

The firm collapsed after Corzine, a prominent Democratic fundraiser who had been mentioned as a possible replacement for Treasury Secretary Timothy Geithner, bought up big holdings of debt from economically troubled European countries such as Portugal, Italy, Ireland and Spain at a discount. When Wall Street found out about the deal following a regulatory filing by the firm, investors worried MF Global had taken on too much risk.

By Sunday evening, the firm, which had lost 67 percent of its market value in five days and had been downgraded to junk status, prepared to file for bankruptcy while selling off some of its remaining assets. A rival firm, Connecticut-based Interactive Brokers, was set to buy large portions of MF Global.

The deal quickly fell apart. Interactive Brokers realized MF Global was missing hundreds of millions of dollars of investors’ money. As much as $700 million is not where it should be, either as the result of sloppy bookkeeping on the part of MF Global or something more intentional and perhaps sinister. Federal regulators had apparently been concerned about the firm’s performance for some time, and MF Global confirmed to the Times that the Community Futures Trading Commission and the Securities and Exchange Commission had “expressed their grave concerns” about the firm’s viability.

MF Global filed for bankruptcy Monday morning.

Follow Will on Twitter

Tags : department of the treasury jon corzine new jersey
Loading comments...
© Copyright 2010 - 2018 | The Daily Caller