Corzine Fined $5M Over Customer Funds Misuse
A federal court has issued a $5 million fine against former New Jersey governor Jon Corzine for alleged failure to supervise the use of customer funds by MF Global, the brokerage that collapsed in 2011 while he was chief, the Associated Press reports.
The ruling is in line with civil charges the U.S. Commodity Futures Trading Commission brought against Corzine in 2013, according to the AP. Regulators allege MF Global improperly used around $1 billion of client money to boost liquidity in an attempt to avoid collapse brought on by a bad multibillion-dollar bet on European debt, the Associated Press writes.
Corzine allegedly failed to supervise how the firm’s employees handled customer funds, according to the order cited by the AP.
The brokerage filed for a $41 billion bankruptcy in October 2011, with Corzine stepping down as chief the next month, the Associated Press writes.
Under last week’s order, Corzine is banned from working at any commodities trading firm or trading other people’s money in investments regulated by the CFTC, with some exceptions, according to the AP. But the court ruling allows Corzine to avoid a trial that was scheduled to start in October, the Associated Press writes. Corzine, who neither admitted nor denied the allegations, says he was pleased with the ruling and is “gratified” that all of the client money was returned several years ago, the Associated Press writes.
Last year, Corzine and several former MF Global executives settled for $132 million in a lawsuit brought by the firm’s customers, Reuters writes. Executives also settled for $64.5 million in separate litigation a year earlier, according to the newswire. In both cases, some of the money was covered by insurance, according to Reuters. But Corzine isn’t allowed to ask insurers to cover the $5 million fine issued last week, according to the newswire.
Corzine had led MF Global since March 2010 after a 10-year political career that included stints in the U.S. Senate and as New Jersey governor, a position he lost to Republican Chris Christie prior to joining MF Global, according to the AP.
Before entering politics in 2000, Corzine served as CEO of Goldman Sachs.