U.S. agency sues Corzine over failure of MF Global

Federal regulators accused former New Jersey Gov. Jon Corzine Thursday of misusing customer money while he was CEO of brokerage firm MF Global, which collapsed in 2011.

A lawsuit filed in federal court in New York by the Commodity Futures Trading Commission seeks to ban Corzine from trading in the futures market and demands he pay unspecified penalties.

The lawsuit says Corzine bore responsibility for unlawful acts by MF Global because he controlled the company and its holdings and "either did not act in good faith or knowingly induced these violations."

MF Global has agreed to pay a $100 million penalty as part of a settlement announced Thursday. The money will come from bankruptcy proceedings.

Corzine has previously disputed the allegations by the CFTC, which regulated New York-based MF Global. Corzine did not immediately respond publicly to yesterday's lawsuit.

Yesterday's lawsuit is striking in that regulators have seldom charged individuals with financial crisis-era misdeeds. They have instead imposed fines and penalties against companies, often with no one having to admit blame.

In a statement, James Giddens, the court-appointed trustee overseeing MF Global's bankruptcy, said the $100-million penalty will be paid only after the firm's customers and creditors of the firm have received all their claims.

About $1.2 billion in customer money disappeared when MF Global collapsed. Nearly 90 percent of the money belonging to the firm's U.S. customers has been recovered. Many farmers, ranchers and business owners used MF Global to hedge their risks against fluctuating crop prices.