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Tuesday, July 23, 2024 | Back issues
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MF Global Wrap-Up Saddles Corzine With $5M Fine

Former New Jersey Gov. Jon Corzine will pay $5 million for his role in the spectacular financial collapse of MF Global, a derivatives broker he led before its 2011 bankruptcy.

(CN) — Former New Jersey Gov. Jon Corzine agreed to pay $5 million — and never again participate in the futures trading industry — for his role in the spectacular financial collapse of MF Global, a derivatives broker he led before its 2011 bankruptcy.

The Commodity Futures Trading Commission announced the settlement on Thursday, closing the loop on a six-year-old scandal.

In October 2011, MF Global customers lost roughly $1.6 billion as the broker collapsed, and then failed to account for more than $750 million of that money.

Shareholders filed a class action against Corzine and other MF Global executives later that year, and the commission joined the action two years later in an amended complaint that also named the company’s assistant treasurer Edith O’Brien.

Under the terms of today’s settlement, O’Brien must pay $500,000 and refrain from associating with any Futures Commission Merchant and registering with the commission for 18 months.

“This resolution demonstrates the importance that the commission attaches to customer protection, which has long been a hallmark of our mission,” the commission’s enforcement director Aitan Goelman said in a statement.

Corzine said that he was pleased to have put the episode behind him.

“As the CEO of MF Global in 2011, I have accepted responsibility for its failure, and I deeply regret the impact it had on customers, employees, shareholders and others,” Corzine said.

The Democrat noted that MF Global customers recovered their money years ago, after the firm had been ordered to pay $1.2 billion in restitution.

“With this matter resolved, I am eager to move forward and plan to spend my time focused on issues that have always been important in my life: my family, community and philanthropic causes, and markets,” Corzine said.

Andy Levander, an attorney at Dechert for the former governor, emphasized that the deal marks the last piece of litigation that had been trailing his client.

“Mr. Corzine has given more than 10 days of testimony under oath, and these matters have been investigated exhaustively by two US Attorney’s offices, the FBI, the SEC, the CFTC, FINRA and Congress,” Levander said. “None of these investigations have led to allegations that Mr. Corzine engaged in any kind of intentional misconduct or fraud, or that he was at any time not truthful in his many hours of testimony.”

In a 16-page order signed today, U.S. District Judge Victor Marrero found that Corzine failed to supervise his employees and officers in violation of the commission’s regulation.

The settlement allows Corzine to neither confirm nor deny the allegations in his complaint.

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