Linda Sandler and Phil Mattingly
Bloomberg
March 26, 2012
Jon S. Corzine, MF Global Holding Ltd.’s former chief executive officer, may face potential legal liability if investigators show he knew customer money might be used when he ordered $200 million transferred to a U.K. account as his brokerage neared collapse, former prosecutors said.
The ex-Goldman Sachs Group Inc. (GS) co-chairman gave “direct instructions” to move money from a U.S. account to meet an overdraft with JPMorgan Chase & Co. (JPM) just days before MF Global’s bankruptcy, according to a memo by congressional investigators. Such accounts may have contained assets belonging to both customers and MF Global.
The U.S. Department of Justice and federal regulators are investigating the firm’s Oct. 31 collapse. Corzine, a Democrat from New Jersey who served in the U.S. Senate and as governor, told Congress last year he never directed customer funds be used improperly. Though showing he deliberately used customer money would be the key to a criminal case, former prosecutors said Corzine, who hasn’t been charged with any wrongdoing, could be deemed liable in civil cases for misuse of customer money simply for ordering the hole in JPMorgan’s account plugged, if it turns out customer funds were used.
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