Is Jon Corzine Done on Wall Street?
MF Global (NYSE: MF) has officially filed for bankruptcy, but the commodity brokerage and primary dealer has not only lost customers - it may lose any shred of credibility for its CEO, Jon Corzine.
This morning, the New York Federal Reserve suspended MF's role as a primary dealer, and traders were locked out of the floor on the CME this morning. The bankruptcy is also having a major impact on commodity prices this morning, as MF is one of the largest players in commodities trading.
The bankruptcy filing was rumored about all weekend and morning before it finally happened around 10:30 this morning. It has affected counter parties, traders, and most importantly, employees of MF Global. Yet, it looks like Corzine may walk away scot-free, with a severance package north of $12 million.
There was hope over the weekend and even as early as this morning that a deal with Interactive Brokers (NASDAQ: IBKR) could get done, for either all or parts of the company. Reuters cited sources saying that the talks broke down earlier this morning. Corzine was unable to deliver for his troops, yet he is getting a severance package large enough to choke an elephant.
Corzine was the CEO of Goldman Sachs (NYSE: GS) prior to the company going public, and he nearly brought the company down by copying Long Term Capital Management's trades in 1998 during the Russian debt crisis. Corzine was the co-CEO along with Hank Paulson, and Corzine was ultimately ousted from the company, despite the New York-based investment bank going public and despite Paulson's objections.
After leaving Goldman, Corzine became Governor of New Jersey. Many in the Garden State will tell you that Corzine ruined the state, although that is debatable. From his sexual scandals with Carla Katz to corruption scandals, Corzine's tenure as Governor was marked more by the headlines in the newspapers then by the initiatives he took.
His reputation has been severely tarnished with MF Global filing bankruptcy, not to mention his other snafus at Goldman and as the Governor of NJ. For the Federal Reserve to allow MF to fail, it could show that Corzine is not as well liked in Washington as he would like to believe.
Many will opine on whether Corzine is worth the severance package, seeing as he did not do anything for shareholders (and nearly wiped out bondholders in the process,) and he may very well not be worth it.
One thing is for sure. His reputation has been severely tarnished. At age 64, Corzine's legacy on Wall Street may very well go out with not a major merger or deal, but rather a filing in bankruptcy court.
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