MF Global Holdings Ltd (OTCMKTS:MFGLQ) CEO Jon Corzine has allegedly used nearly $1 billion customer cash in a vain attempt to keep the company afloat, according to CTFC.
The Commodities Future Trading Commission said it will seek in a civil case to ban Corzine and former Assistant Treasurer Edith O’Brien from the industry, besides imposing penalties on them.
The Federal Regulator filed a civil charge Thursday against former MF Global Holdings Ltd (OTCMKTS:MFGLQ), Chief Executive Jon Corzine, indicating he should bear responsibility for the demise of the commodities brokerage in 2011.
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CFTC’s Charge Against MF Global CEO
The CFTC’s civil charge claims Jon Corzine failed to act in good faith besides violating his legal obligations to diligently supervise his subordinates. The civil charge also claims O’Brien has aided and abetted MF Global Holdings Ltd (OTCMKTS:MFGLQ)’s misuse of customer funds by improperly approving transfers of hundreds of millions of dollars from customer accounts, knowing full well MF Global did not have sufficient proprietary funds.
The CFTC complaint also cited some new revelations on conversations held by Jon Corzine that pointed to his playing a more active role in MF Global Holdings Ltd (OTCMKTS:MFGLQ)’s activities.
The lawsuit is a blow to the image of the former top executive at Goldman Sachs Group Inc. Jon Corzine was also a New Jersey governor and a U.S. senator. He has been grilled by Congress in several high-profile hearings besides being the focus of several civil law suits relating to his oversight of MF Global Holdings Ltd (OTCMKTS:MFGLQ).
Charges Against Jon Corzine Are Meritless Allegations
Andy Levander, a lawyer for Corzine, accused CFTC of making meritless allegations that Corzine failed to supervise an experienced back office professional who was located in a different city and who did not report to Corzine or even to anyone who reported to Corzine.
Earlier, a MF Global Holdings Ltd (OTCMKTS:MFGLQ) trustee said the former CEO is indeed to blame for the brokerage firm’s dramatic collapse in 2011. The trustee said Jon Corzine implemented trading strategies with minimal oversight, exceeded the limits approved by the board on European trades and failed to improve inadequate systems. Corzine’s team failed to improve faulty controls even after being warned.