Regulators Investigating MF Global (Jon Corzine's Firm) for Missing Money

How does $750,000,000 in customer money go missing from Jon Corzine's Brokerage Firm?  That's a question that investigators are attempting to answer about just where the missing money went.  Truthfully after reading this paragraph from the article, there is no way if I had money I would invest with MF Global run by Corzine:

One of his hallmark traits, according to the 1999 book “Goldman Sachs: The Culture of Success,” by Lisa Endlich, was his willingness to tolerate losses if the theory behind the trades was well thought out.

Corzine is willing to tolerate losses if the trade is well thought out?  Fine for his money but what about the people investing.  Don't imagine they would have the same thoughts.  When the NY Times is on the story, Corzine and his firm, MF Global, may have a problem.  Did not expect to get this in email from the Times.  Maybe the tide is shifting about Wall Street investors after all that has happened and they are no longer viewed as infallible.  Now if we could only do away with 'too big to fail' we might be getting somewhere.

Where will this investigation lead?  IMHO depends on how much Corzine has donated to Obama for his reelection campaign.  He better open up his checkbook fast if he hasn't already donated.  

October 31, 2011, 6:57 pm Investment Banking | Legal/Regulatory 

Regulators Investigating MF Global for Missing Money 

By BEN PROTESS, MICHAEL J. DE LA MERCED and SUSANNE CRAIG

9:55 p.m. | Updated 

Federal regulators have discovered that hundreds of millions of dollars in customer money has gone missing from MF Global in recent days, prompting an investigation into the brokerage firm, which is run by Jon S. Corzine, the former New Jersey governor, several people briefed on the matter said on Monday. 

The recognition that money was missing scuttled at the 11th hour an agreement to sell a major part of MF Global to a rival brokerage firm. MF Global had staked its survival on completing the deal. Instead, the New York-based firm filed for bankruptcy on Monday. 

Regulators are examining whether MF Global diverted some customer funds to support its own trades as the firm teetered on the brink of collapse. 

The discovery that money could not be located might simply reflect sloppy internal controls at MF Global. It is still unclear where the money went. At first, as much as $950 million was believed to be missing, but as the firm sorted through its bankruptcy, that figure fell to less than $700 million by late Monday, the people briefed on the matter said. Additional funds are expected to trickle in over the coming days. 

But the investigation, which is in its earliest stages, may uncover something more intentional and troubling. 

In any case, what led to the unaccounted-for cash could violate a tenet of Wall Street regulation: Customers’ funds must be kept separate from company money. One of the basic duties of any brokerage firm is to keep track of customer accounts on a daily basis. 

Neither MF Global nor Mr. Corzine has been accused of any wrongdoing. Lawyers for MF Global did not respond to requests for comment. 

Now, the inquiry threatens to tarnish further the reputation of Mr. Corzine, the former Goldman Sachs executive who had sought to revive his Wall Street career last year just a few months after being defeated for re-election as New Jersey’s governor. 

When he arrived at MF Global — after more than a decade in politics, including serving as a Democratic United States senator from New Jersey — Mr. Corzine sought to bolster profits by increasing the number of bets the firm made using its own capital. It was a strategy born of his own experience at Goldman, where he rose through the ranks by building out the investment bank’s formidable United States government bond trading arm. 

Excerpt:  Read More at the New York Times