As the NY Times notes in its expansion of the statements of Corzine's attorney, it is going to be a bit hard to pin Mr. Corzine down in the case of MF Global, because it is unlikely that he sent an email to Ms. O'Brien saying "Please meet our margin call with funds stolen from the customers' accounts."
The defense will be that Mr. Corzine, who had been personally running the prop trading gambits that took MF Global down, could not be bothered in understanding his own firm's cash position, and that no one dared to tell him that they were dipping into customer funds.
The weight of this of course would naturally have to seem to fall on someone, but the defense offered will be that this will have been an inadvertent error, that the firm was so hopelessly mismanaged and out of control that they were not even able to keep their own books straight.
Like most of the mainstream media, the NY Times expands on the Talking Points being promoted the spokesmen and public relations campaign for Mr. Corzine. Given the nature of this story, and the blanket of secrecy that was thrown over it by most of the involved parties, except the customers of course, it would be a real effort to do otherwise.
I am still quite intrigued by who leaked the Congressional memo to Bloomberg news.
Dealbook/NY Times
New Details Emerge on MF Global, but No Smoking Gun
By AZAM AHMED and BEN PROTESS
March 23, 2012, 6:19 pm
New details have emerged about MF Global’s chaotic final days and a critical transfer of customer money that has become a central focus in the wide-ranging federal investigation into the firm’s collapse.
In a memo prepared for a coming Congressional hearing, investigators described how Jon S. Corzine, the firm’s former chief executive and former New Jersey governor, asked an executive in the Chicago office to transfer $200 million to replenish an overdrawn account at JPMorgan Chase in London.
The Congressional memo cites an e-mail from the Chicago employee, Edith O’Brien, who authorized the transfer, saying it was “Per JC’s direct instructions,” referring to Mr. Corzine.
At first, the revelation fueled speculation that Mr. Corzine had instructed the transfer of customer funds, despite his assertions to the contrary. But it appears to be no smoking gun.
While the memo makes clear that Mr. Corzine was involved in patching the overdraft, it does not indicate that he requested the funds be drawn from customer accounts. He asked only that the overdraft be fixed. And in a footnote, the memo noted that futures brokerage firms like MF Global frequently deposit firm money into customer accounts and may withdraw it at will. (Do they? Do they frequently deposit their own money into customer accounts? Is that what this memo really says? - Jesse)
While the memo makes clear that Mr. Corzine was involved in patching the overdraft, it does not indicate that he requested the funds be drawn from customer accounts. He asked only that the overdraft be fixed. And in a footnote, the memo noted that futures brokerage firms like MF Global frequently deposit firm money into customer accounts and may withdraw it at will.
In a statement on Friday, a spokesman for Mr. Corzine said the former chief executive stood by his earlier testimony before Congress. In December, Mr. Corzine told lawmakers that he did not authorize the illicit transfer of customer money.
“I never gave any instructions to misuse customer money, never intended to give any instructions or authority to misuse customer funds, and I find it very hard to understand how anyone could misconstrue what I’ve said as a way to misuse customer money,” Mr. Corzine, a Democrat who also served in the Senate, said before the Senate Agriculture Committee.
The spokesman, Steven Goldberg, added that Mr. Corzine “never directed Ms. O’Brien or anyone else regarding which account should be used to cure the overdrafts, and he never directed that customer funds should be used for that purpose. Nor was he informed that customer funds had been used for that purpose...”
Read the rest here.
