Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, December 8, 2011

Corzine Apologizes, Doesn't Know Where Customers' Money Is

The House Committee on Agriculture held a hearing today on the MF Global bankruptcy, at which Jon Corzine was scheduled to testify.  Here is an excerpt from his written testimony about the missing cutomers' funds:

As the chief executive officer of MF Global, I ultimately had overall responsibility for
the firm. I did not, however, generally involve myself in the mechanics of the clearing and
settlement of trades, or in the movement of cash and collateral. Nor was I an expert on the
complicated rules and regulations governing the various different operating businesses that
comprised MF Global. I had little expertise or experience in those operational aspects of the

Again, I want to emphasize that, since my resignation from MF Global on November 3,
2011, I have not had access to the information that I would need to understand what happened. It
is extremely difficult for me to reconstruct the events that occurred during the chaotic days and
the last hours leading up to the bankruptcy filing.

I simply do not know where the money is, or why the accounts have not been reconciled
to date. I do not know which accounts are unreconciled or whether the unreconciled accounts
were or were not subject to the segregation rules. Moreover, there were an extraordinary number
of transactions during MF Global’s last few days, and I do not know, for example, whether there
were operational errors at MF Global or elsewhere, or whether banks and counterparties have
held onto funds that should rightfully have been returned to MF Global. I am sure that the
trustee in bankruptcy, the SIPC receiver, and the regulators are working to answer these
questions and to understand precisely what happened during the firm’s last days and hours.

As the chief executive officer of MF Global, I tried to exercise my best judgment on
behalf of MF Global’s customers, employees and shareholders. Once again, let me go back to
where I started: I sincerely apologize, both personally and on behalf of the company, to our
customers, our employees and our investors, who are bearing the brunt of the impact of the
firm’s bankruptcy.

The Wall St. Journal reports that Mr. Corzine was contrite and expressed both sorrow and a firm defense of his actions.  WSJ, 'Devastated' Corzine Defends Actions as MF Global Chief

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