Corzine Resigns from MF Global
Well, you can't win them all.
That's the motto Jon Corzine will have to cling to this year, as he walked away from the disaster at MF Global (NYSE: MF) today. Corzine resigned his post as CEO of the embattled company just days after the group filed for one of the biggest bankruptcies in the history of corporate America.
“I feel great sadness for what has transpired at MF Global and the impact it has had on the firm's clients, employees and many others,” Mr. Corzine, 64, said in a statement. “I intend to continue to assist the company and its board in their efforts to respond to regulatory inquiries and issues related to the disposition of the firm's assets.”
Corzine originally joined the firm in March 2010, after losing his governorship to Republican Chris Christie. At the time, Corzine was looking to get back to Wall Street after a decade in politics. Since he was the one-time head of Goldman Sachs (NYSE: GS) he was a natural fit for the MF Global group.
Unfortunately for MF Global, Corzine could not recapture that magic he had at Goldman. He literally bet the bank on European debt, and with Europe skidding sideways and that debt headed for a haircut, Corzine's firm had to do the unthinkable: file for Chapter 11. It was a stunning move that started as a regulatory clean-up operation and ended with an old-fashioned bank run.
Regulators, wary of the size of bets Corzine and the firm had placed overseas on sovereign debt, called on MF Global to raise more capital. This made investors and ratings agencies nervous, and set off a crisis of confidence. This led to a downward spiral, with shareholders dumping MF Global and Corzine hitting the pavement, looking for a buyer for the company.
Corzine thought he had a deal last weekend. That deal fell through at the last minute when, through due diligence for the deal, it was noted that $700 million in customer cash had gone missing. Oops. Ten percent of it has been found and recovered, but another $630 million remains lost in the paperwork, stolen, or perhaps just hiding under someone's desk.
For that reason, Corzine hired a criminal defense attorney this week. He just might need more than one, if any of these allegations point to malfeasance on his part. For now, Corzine has to be shaking his head, wondering how the one-time king of the world, who made many, many men rich at Goldman Sachs, and who was protected by wealth and position in government, could find himself in the same situation as so many other Americans: unemployed and scared of what comes next.
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