Jon Corzine, epitome of the .01%, former head of Goldman Sachs, former U.S. senator and governor of New Jersey: why is he still at liberty? Why is he padding about dispensing ridiculous economic advice to terminally credulous politicians like Joe Biden (“The first thing we did was call Jon Corzine,” said our vice president within weeks of taking office). Have an air sickness bag handy? When you’ve attended to that, take a look at this YouTube video.
Who is more repulsive, Senator Corzine or Vice President Biden? I’m not sure we have instruments accurate enough to measure that. But at least the vice president has not, as far as I know, presided over an entity that lost $1.6 billion of its clients’ money, as Jon Corzine did as head of MF Global, another item on his resume. (I know, I know, Biden is helping to run an administration that loses $1.6 trillion annually, but let’s leave that to one side.) The Corzine story is old news, sort of. It’s been reported, but not quite savored; there hasn’t been the gleeful handwringing on the part of the legacy media. The New York Times, for example, has not gone into hysterical overdrive, running front-page stories and blistering editorials every day as it would had Jon Corzine been a Republican malefactor.
Still, the outline is clear. Here’s a tidbit from a February 28 story in the Huffington Post, bold face courtesy your humble reporter:
The $1.6 billion belonged to MF Global’s clients. Officials say it apparently went to cover MF Global’s short-term financial needs as investors and trading partners lost confidence in the firm, punishing its stock price and causing a severe cash shortage.
Client money is supposed to be held separately from corporate cash to protect investors in case a firm fails. MF Global’s misuse of client money would violate a fundamental investor-protection for people who trade options and futures.
Corzine, who hired a criminal lawyer last fall, told Congress he did not know what happened to the money.
Gosh, where did that money go? It must be around somewhere. It was here just a minute ago!
It’s appropriate that Jon Corzine has hired a criminal lawyer. I wonder whether the government will freeze his assets, as it froze Conrad Black’s in an ex parte proceeding, making it impossible for him to pay the multi-million-dollar retainer that top lawyers demand. Probably not. Jon Corzine, after all, is one of them. He’s the sort of chap Joe Biden turns to for advice about fixing the U.S. economy. That’s worked well, as anyone who has looked at the unemployment figures can see.
But I digress. $1.6 billion. For us little, tax-paying folks (I’m not talking about people like Timothy “What are taxes?” Geithner), that’s a right-large sum. And when it goes missing, people get hurt. “Who Has Jon Corzine Hurt?” An article in Forbes by that title details some of the carnage:
MF Global shareholders have been basically wiped out — the stock trades on the Pink sheets at $0.12. The bondholders are going to get stung as well, and while many of these investors are large institutions, certainly some small investors have been hit hard. MF Global employees are also being forced to swallow a bitter pill. On Friday, 1,066 employees were laid off from MF’s brokerage unit. The terminations were effective immediately, and employees will be paid through November 15. Their health coverage will lapse at the end of the month.
Not so nice, is it? “Corzine’s reckless decisions,” as the article put it, “have real consequences.”
The next group that has been substantially hurt in the wake of the firm’s bankruptcy is their clients, many of whom have also been put out of work. The bankruptcy trustee said on Friday that out of an estimated 50,000 commodity accounts at MF, 17,000 have been successfully transferred back to customers — although cash and some collateral in these accounts still remains frozen. Quite a few of these accounts belong to individual futures traders. The money in those accounts, and the ability to trade daily, is how they derive their income.
Forbes was not the only news source to notice what’s happening. In December, NPR ran a story about how ranchers and farmers were hurt by Corzine’s lack of oversight — if “lack of oversight” covers the enormity he presided over. “They just stole my money,” said Tim Rietzke, a cattle rancher from Kansas. “And now, I have to figure out how to get it back.”
Good luck with that, Tim! I do have one suggestion: try MF Global again. You lost $30,000. But according to The Wall Street Journal, although MF Global has “collapsed,” it may still pay top executives bonuses of “several hundred thousand dollars each.”
“The bonus plan,” quoth the Journal, “could face fierce resistance.” You don’t say? Where, as Bob Dole once put it, is the outrage? And why is Jon Corzine still at liberty?
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