Oh my: E-mail contradicts Corzine testimony about tapping MF Global customer funds as firm collapsed
posted at 7:12 pm on March 23, 2012 by Allahpundit
Remember, fully $1.2 billion of customer money was “vaporized,” possibly never to be recovered, as the firm scrambled to stay afloat last fall. The suspicion was that MF Global managers had dipped into customer accounts — which are supposed to be strictly segregated just in case, oh, say, the firm fails — to fund firm business, but there was no hard evidence that Corzine himself had ordered it. Lots of fall guys to choose from potentially, but nothing pointing directly at Joe Biden’s buddy Jon.
Jon S. Corzine, MF Global Holding Ltd. (MFGLQ)’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund account to meet an overdraft in one of the brokerage’s JPMorgan Chase & Co. (JPM) accounts in London, according to an e-mail sent by a firm executive.
Edith O’Brien, a treasurer for the firm, said in an e-mail sent the afternoon of Oct. 28, three days before the company collapsed, that the transfer of the funds was “Per JC’s direct instructions,” according to a copy of a memo drafted by congressional investigators and obtained by Bloomberg News…
“Over the course of that week, MF Global (MFGLQ)’s financial position deteriorated, but the firm represented to its regulators and self-regulatory organizations that its customers’ segregated funds were safe,” said the memo, written by Financial Services Committee staff and sent to lawmakers.
Vinay Mahajan, global treasurer of MF Global Holdings, wrote an e-mail on Oct. 28 that said JPMorgan was “holding up vital business in the U.S. as a result” of the overdrawn account, which had to be “fully funded ASAP,” according to the memo.
Watch the highlight reel of his House testimony below. Lots of gaps in his memory, but even so, he was pretty sure at the time that he never ordered anyone to tap customer funds. In fact, he told both a House and a Senate panel that and insisted that he “simply doesn’t know” where the money went. If they don’t throw a perjury charge at him for this, it’s only because he has so many friends left over in Congress from his days as a Senator. Exit question for prosecutors and securities litigators: What other charges is he facing here, conceivably? Fraud and breach of fiduciary duty. What else?
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