MF Global files for bankruptcy after deal unravels
MF Global Holdings Ltd, the futures broker run by former Goldman Sachs chief Jon Corzine, has filed for Chapter 11 bankruptcy after a tentative deal with a buyer fell apart.
The firm's meltdown in less than a week is a stunning setback for Corzine, who sought to turn MF Global into a mini-Goldman. Corzine became CEO last year after losing his governorship of New Jersey, and his big bets on euro-zone debt sealed the company's fate.
Guess that whole revolving-door thing doesn't work as well when there's no massive government bailouts available.
UPDATE:
Regulators Investigating MF Global for Missing Money
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.
Also wik: Others note the obvious ...
Big Three Nets Omit Corzine's Party ID as Feds Investigate His Firm
But of course.
2 comments:
Curiouser and curiouser. Dipping into client's funds to backstop the firm's heavily leveraged and high risk bets on European debt is about as serious as it gets. We're talking - Federal felony theft - Criminal fraud - Go to jail - Do not pass go - Do not collect $200 - Throw away the key. That kind of serious.
Then check out some of the special provisions of the "Investment Grade" debt offerings from MF Global only two months ago:
"The futures broker sold $325 million of five-year unsecured notes, the company said today in a statement. The notes will pay an extra percentage point of interest if Corzine is named to a federal post and confirmed by the Senate before July 2013, New York-based MF Global said yesterday in a regulatory filing.
“That seems crazy,” said William Larkin, a fixed-income portfolio manager who oversees $500 million at Cabot Money Management Inc. in Salem, Massachusetts, and has 22 years of experience. “I’ve never heard of something like this.”...
A Democrat, Corzine is among the biggest fundraisers for President Barack Obama’s 2012 re-election campaign. He has been the subject of speculation about administration jobs such as Treasury secretary or White House economic adviser, said Christopher Allen, an analyst at Evercore Partners Inc. in New York.
Corzine’s employment contract is written with a view to future government service. It stipulates that he’ll be paid his $1.5 million retention bonus on a pro rata basis if he leaves to work for any “U.S. federal, state or local government” before March 31, 2014."
I wonder if Corzine's retention bonus, and the bond interest kicker is invoked by Corzine working in the laundry of a Federal Prison?
Corzine is also set to collect a $12 million "golden parachute" unless fired for good cause.
This is how the political class takes care of itself. Like the Fannie/Freddie managers getting their multi-million dollar annual bonuses for inflating and then crashing the real estate market.
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