How, Exactly, Does One Lose $1.2 Billion?

I have to be honest here. I pulled a Jon Corzine once.

I had taken twenty dollars from my bank account to buy some fast food. In my haste to get dressed (I've never been a big fan of wearing pants until they're required) I somehow misplaced the twenty dollars. I looked everywhere — in my dresser, on the floor, under my bed — and could not find the money. It later turned out that, while preparing for fast food, I also ordered a pizza. I hadn't lost the twenty bucks. It wasn't under the couch and it wasn't taken by some nefarious force. I had simply given it to the Papa Johns delivery man and completely forgotten about it. (It was college and that is my anti-drug message for the day). Unless Jon Corzine smokes a lot more pot than college-version of John Thorpe did, and unless he ordered $1.2 billion worth of pizza and forgot about it, Mr. Corzine is in for a long day today. Why? Because he's testifying before Congress about how in the world his company, MF Global,

misplaced $1.2 billion in client money. He certainly needs a better answer than "I do not know", which is what he has offered so far in his written statement ahead of his testimony. "I simply do not know where the money is, or why the accounts have not been reconciled to date," said Corzine in his written statement. "I do not know which accounts are unreconciled or whether the unreconciled accounts were or were not subject to the segregation rules." Oh, well in that case, let's doff our caps to Mr. Corzine and wish him well on his new endeavors. Or...let's throw his butt in prison for a while and see if he can't remember where all that money went. It's not like it vanished into thin air, like Andy Dufresne busting out of Shawshank. A few weeks in pre-trial lock-up might jog his memory a little. At the very least, we can get better answers than this. "...there were an extraordinary number of transactions during MF Global's last few days, and I do not know, for example, whether there were operational errors at MF Global or elsewhere, or whether the banks and counterparties have held onto funds that should rightfully have been returned to MF Global." Wait, wait, wait. Let's go back in time a bit, here. The firm is imploding. Bankruptcy is coming. Doom and gloom are on the horizon. Why, at that point, is ANYONE at MF Global allowed to touch any money, and move it anywhere? Clearly the senior management knew the company had struck an iceberg long before it sank; why were people not ordered to stop what they're doing and preserve the crime scene as it is? If I am on that committee, that's what I want to know. Not where is the money — it will eventually be found. I want to know why the firm was allowed to operate after the end was in sight. I want to know why some traders in the firm were allowed to cover their assets. I want to know which clients had money moved into safe places on their behalf, and which ones are part of the $1.2 billion in missing money. I want to know if any friends of Corzine, or connected people (you know the sort of which I speak) received preferential treatment during these, as he describes them, hectic last few days. Why were they hectic? Did people know the ship was sinking and seek to save themselves? Their friends? Their top investors? Their top banking clients? Jon Corzine better have some compelling answers today for how he and his firm, MF Global, misplaced and cannot find $1.2 billion in client funds. If not, he had better be prepared for a long, well-deserved stay in prison.