Jon Corzine, the top MF Global executive tendered his resignation on Friday over an alleged breach of ethics relating to the disappearance of hundreds of millions of dollars in client money, according to news sources.
Corzine, the firm’s chairman and chief executive, will not seek his $12 million severance from MF Global, which filed for Chapter 11 on Monday, says the company in a statement.
The resignation adds to the series of shockwaves MF Global has experience over the last week – $600 million in missing customer money, a slew of federal investigations, bankruptcy and a loss in market value.
‘I feel great sadness for what has transpired at MF Global and the impact it has had on the firm’s clients, employees and many others,’ Corzine, said in a statement to the New York Times. ‘I intend to continue to assist the company and its board in their efforts to respond to regulatory inquiries and issues related to the disposition of the firm’s assets.’
Securities firms such as MF Global are supposed to separate their money from their clients,’ so in the event of a crisis, customers can easily retrieve their assets.
News reports have raised the possibility that the missing money could be sitting at JP Morgan Chase, which serves as an intermediary when MF Global trades securities.
However, reports indicate that JPMorgan says it had been ‘wholly transparent’ about money from MF Global.
‘Corzine will face many legal inquiries, including multiple investigations by government agencies (CFTC, SEC, FBI) and a complaint brought by the bankruptcy trustee,’ says Douglas Park, a Silicon Valley corporate governance attorney and principal of DYP Advisors. ‘The trustee is going to subpoena Corzine and other top MF Global executives.’
The former New Jersey Governor has hired white-collar defence attorney Andrew Levander, who is notorious for defending prominent Wall Street executives.
Levander has tried more than 40 cases and represented John Thain, former chief executive at Merrill Lynch, in a government inquiry that involved his position in Merrill’s sale to Bank of America. Ezra Merkin, a hedge fund manager who invested with Bernard Madoff, hired Levander to defend him in a scandal connected to the Madoff case.
[Article by Aarti Maharaj, Corporate Secretary]