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Jon Corzine has voluntarily resigned from MF Global as the company’s board of directors rapidly lost faith in his ability to right the company.The former governor of New Jersey says he will not take his $12 million severance package.
Still, Corzine has retained John Thain’s lawyer Andrew Levander, who represented the former Merrill CEO and other high level directors at Lehman Brothers when the investment firms went under.
“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,” Corzine said in an e-mailed statement this morning.
Lead director of the board, Edward Goldberg, and president and COO, Bradley Abelow, will remain in their current positions. MF Global has yet to decide on a new leader and did not name an interim director in its statement.
Corzine has yet to be charged with wrongdoing.
The SEC is investigating insider trading allegations at the trading house over convertible bond prices before Moody’s announced it was downgrading the firm.
MF Global has also come under intense scrutiny for commingling client assets with the firm’s. More than $600 million is missing. The company was also playing accounting games before reporting quarterly results, moves that have gotten other firms in trouble in the past.
“The most troubling aspect about the MF Global situation is the shortfall of customer money at the firm,” said Gary Gensler, Chairman of the Commodity Futures Trading Commission, in testimony to the Senate Homeland Security and Governmental Affairs. “Segregation of customer funds is the core foundation of customer protection in the commodity futures and swaps markets. Segregation must be maintained at all times. That means at every moment of every day.”
Other trading houses will begin splitting up MF Global’s business as the CME tries to revert trading to normal levels. Major financials including BNP Paribas have stepped in and started analysing client accounts before taking them on.