Exec claims Corzine knew of MF Global loan
From left, Former MF Global Holdings Ltd. chairman and CEO Jon Corzine, MF Global Holdings Ltd. president and COO Bradley Abelow, and MF Global Holdings Ltd. CFO Henri Steenkamp, are sworn in on Capitol Hill in Washington, Tuesday, Dec. 13, 2011, prior to testifying before the Senate Agriculture Committee. Credit: AP
A financial-exchange executive said Tuesday that Jon Corzine might have known that MF Global tapped clients' money to lend to a European affiliate of the firm.
CME Group Inc. executive chairman Terrence Duffy told a Senate panel he had received information that Corzine knew about a transfer of $175 million from customer accounts.
Corzine, a former senator who resigned as MF Global chief executive last month, has testified that he didn't know any customer money was missing until Oct. 30, the day before the company became the eighth-largest bankruptcy in U.S. history. About $1.2 billion of customer money was unaccounted for when MF Global collapsed.
According to Duffy, an MF Global employee told a CME auditor that "Mr. Corzine was aware" of the loan.
Duffy told the Senate Agriculture Committee that he's referred the matter to the Justice Department and the Commodity Futures Trading Commission, which are investigating MF Global's failure. Duffy said he received the information last weekend from CME Group attorneys who are investigating the matter.
MF Global traded on exchanges managed by CME Group.
Brokerage firms are required to keep client money separate from company funds. Depending on the circumstances, transferring money from customers' accounts could violate securities laws and, in some cases, could amount to a crime.
A Corzine representative had no immediate comment on the allegation.
Earlier Tuesday, Corzine told senators that he never told anyone to "misuse" customer money that vanished when MF Global collapsed this fall.
"I never gave any instruction to anyone at MF Global to misuse customer funds," he said.
Out East with Doug Geed: Wine harvests, a fish market, baked treats and poinsettias NewsdayTV's Doug Geed visits two wineries and a fish market, and then it's time for holiday cheer, with a visit to a bakery and poinsettia greenhouses.
Out East with Doug Geed: Wine harvests, a fish market, baked treats and poinsettias NewsdayTV's Doug Geed visits two wineries and a fish market, and then it's time for holiday cheer, with a visit to a bakery and poinsettia greenhouses.
