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Is Jon Corzine “Too Big to Indict”? Part VII

Posted by Larry Doyle on February 25, 2012 9:07 AM |

Four full months have passed and MF Global customers are still out a reported ~$1.6 billion.

How are these individuals and entities surviving? Will they ever see a return of their funds?  Will the public ever learn what truly happened in those fateful days and hours when this firm went down the tubes?

Don’t hold your breath.

In a not unsurprising manner, we receive word on a late Friday afternoon that the investigation into the MF Global demise may be little more than a case of sloppy controls and compliance. Is this to be believed? 

Let’s listen to Wall Street’s top financial investigative reporter Charlie Gasparino:

One question is screaming to be addressed. Has MF Global’s assistant treasurer Edith O’Brien been granted absolute immunity?

Recall that she was requesting just that. Ms. O’Brien reportedly did not sign off on documentation provided by JP Morgan that funds being wired from MF Global to JPM were not customer funds. Why didn’t Ms. O’ Brien sign off? What did she know? What was the nature of the discussions O’Brien had with senior executives at MF Global? Were those conversations on taped lines? So many questions. So few answers.

Is “the fix” being put in, as a reader indicated to us the other day in writing:

Ted
February 23, 2012 at 1:08 PM
Another WSJ story today about Corzine throwing her (O’ Brien) under the bus.

The fix is in. She was probably told to hire Weingarten since he would protect the establishment/Corzine. A back office administrator in Chicago doesnt normally have those kinds of DC legal connections….

Might America have a greater degree of confidence if we knew that investigators had actually granted Ms. O’Brien the immunity she requested? Or is the full and total truth an inconvenience and a secondary pursuit?

Given the relationships MF Global’s CEO Jon Corzine has on Wall Street and in Washington, and for the benefit of all MF Global customers, Sense on Cents calls for: absolute immunity for Ms. O’Brien; an independent prosecutor; a grand jury investigation.

Anything short of that will leave our nation and these customers feeling shortchanged. Although we have had plenty of that over the last few years.

What do you think?

You may care to review these other Sense on Cents commentaries on Mr. Corzine.

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.

  • Ben Wolf

    You’ve referenced the least acknowledged drag on our recovery: no one trusts anyone else in finance because fraud has become systemic. People see that the biggest offenders consistently go free and are even rewarded, which makes it more and more difficult to do honest business.

  • Ross

    Thanks for keeping the torch burning for MF Global customers. Very few voices of advocacy continue to press this issue.

    As Ben Wolf suggested, we need accountability. Trust in the system is degraded because certain well connected actors never have to answer for their crimes.

  • coe

    “…a very tough time proving a criminal case..” the investigators have not deposed Jon Corzine yet? are you kidding me…how can a firm “misappropriate” appx $1.6B of customer funds and not face the music…sure, pay off JPMorgan with customer funds and let’s all kowtow to the celebrity of John “Fuzzy” Corzine!

  • Obsvr-1

    Chris Whalen talks about MF Global and JP Morgan (Morgan has much of the ‘missing’ $$’s , SURPRISE!)

    MSNBC Video/Chris Whalen and Rick Santelli On MF Global


    Next up, we’ll see some sort of Emergency Farmers Relief bill that pushes this $1.6B onto the taxpayer tab … and who said crime doesn’t pay.

  • Beth

    Is this for real?
    Looks like Mary Shapiro/SEC wants to do the right thing re GMF?

  • Scott Suess

    Hi Larry,

    A picture speaks a thousand words, and seeing Corzine with Obama, indicates to me, some sort duplicity.

    Are we to blame Obama for where we are in the banking crisis? Maybe Obama told Corzine to hide his clients money in a shared Cayman bank account.

    Sure, it was almost 4 years ago that the Bush administration created this train wreck, but let’s not forget it.

    I’ve thought alot about what has happened in our recent financial crisis and I put it to you. If you were a bank, and your competing bank down the street was allowed to give loans to people who were not able to pay but was able to sell those loans for a profit. As a business, would you have sent these subprime customers down the street to your competitor, or would you have made as many of those loans as you could yourself? Don’t forget your shareholders, your bonus, and your ego!

    Still listening in Maryland.

    • LD

      Scott,

      It was neither party individually which facilitated this crisis. Both parties along with regulators which were “captured” by the industry propagated the crisis.

      In regard to the banks, the simple fact is JPM actually did turn away from a large swath of the sub-prime market. Jamie Dimon and his predecessors did maintain relatively stringent lending standards. Those decisions cost JPM some short term profits, but saved the bank in the long run.

      The photo of Corzine with Obama is merely used to highlight the incestuous nature of the relationship between Wall Street and Washington.

      Thanks for writing and for the support/interest in Sense on Cents.

  • Bill

    Just look at how nothing was done to politically connected operatives like Rangel, Geithner, Daschle, et al for not paying their taxes, when an ordinary hand would have been down on one knee in front of some federal judge begging to stay out of jail. The Washington mafia at work.

  • Mark J. Novitsky

    SARBANES-OXLEY EXECUTIVE DISCLOSURE MANDATE!!! WAS “SUPPOSED” TO ELIMINATE THE CEO / CFO “SLOPPY BOOKKEEPING EXCUSE…Maybe somebody should tell that to Gasparino, SEC, DOJ, FBI…Once again proving that SOX was a PR stunt.

  • Ron Larson

    I actually think Corzine really didn’t know that these funds were taken. However. he should be indicted under SOX for failing to implement the controls needed to prevent this. The cold hard fact is that MF Global’s setup allowed lower level employees to do this, either on purpose or accidentally.

    I think that the lack of controls combined with extreme pressure to solve his liquidity problems by any means possible created the environment where a lower level officer made the decision to take customer funds.

    Really? How hard is this? Start by indicting Ms. O’Brien for embezzlement. Her office did the actual looting. She was in charge. She can negotiate with prosecutors to give up bigger fish if she wants.

    Bottom line: Nail O’Brien for embezzlement. Nail Corzine for SOX.






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