Corzine Leads His Brokerage Firm off a Cliff
When Jon Corzine, the recently deposed governor of New Jersey and former head of Goldman Sachs, took the top job at little known brokerage firm MF Global in 2010, many thought the position was beneath the well-known financier. Apparently, it was just the opposite. In late October, MF Global filed for bankruptcy. What's more, Corzine looks to be directly responsible for the firm's demise. Corzine pushed the firm to make an $11.5 billion bet on European bonds, much of it with borrowed money. As the Euro crisis intensified this autumn, the value of the bonds dropped, prompting MF's lenders to demand more money to cover its failing bets, which eventually wiped the firm out. Worse, MF may have tried to cover some of the cash crunch using client money. Over $1 billion is missing from customer accounts. The FBI is reportedly investigating.