Thursday, January 5, 2017

Ex-NJ Gov. Corzine fined $5M; avoids MF Global trial

Jon Corzine, the former New Jersey governor who led the collapsed brokerage MF Global, has been ordered to pay a $5 million penalty for his role in the firm’s alleged illegal use of almost $1 billion in customer funds.

The Associated Press reports:

A federal court in Manhattan on Thursday granted the order against Corzine to the U.S. Commodity Futures Trading Commission, which brought civil charges against him in 2013. Following the stunning collapse of the big Wall Street firm in late 2011, the CFTC alleged that MF Global misused customer funds in a vain attempt to remain solvent. Corzine failed to closely supervise the handling of customer money by the firm’s employees, according to the order.

Corzine, who was the CEO of Wall Street powerhouse Goldman Sachs before entering politics in 2000, was banned by the court order from serving as an official or employee of any commodities trading firm. He also was banned from trading most commodities and other investments regulated by the CFTC, with some limited exceptions.

A related order issued by U.S. District Judge Victor Marrero imposed a $500,000 penalty on Edith O’Brien, an assistant treasurer at the firm who had the authority to approve transfers of customer money. She was said to have aided and abetted MF Global’s alleged violations. O’Brien was banned from working at a commodities trading firm or trading commodities for 18 months.

The court action brought the resolution of a five-year legal drama for Corzine, enabling him to avoid a trial that had been set to begin in October. He had denied wrongdoing from the outset and insisted he didn’t order anyone at MF Global to divert customer funds.

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