NY Times Floats the Corzine 'CEO Defense'

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.

W. C. Handy: Father of the American Blues

Listen to the PBS Radio Documentary W. C. Handy's Blues.

"William Christopher (better known as WC) Handy didn’t invent the blues -- but he heard them in a deep and understanding way. He figured out how they worked. He wrote them down, arranged them, and did the business of bringing them to the world.

Handy’s classic “St. Louis Blues” is one of the most recorded songs ever. But even though Handy’s blues were phenomenally popular, he also strove to secure respect for himself and for other African-American composers. He was one of the first black composers to hold onto the rights to his music, and he published his own and other black composers’ work.

In this hour-long radio special, host Dr. Ysaye Maria Barnwell (of Sweet Honey in the Rock) celebrates the life and legacy of WC Handy the musician, the composer, the arranger, the publisher and the pioneer."

Here is the PBS Documentary Home Page For W. C. Handy's Blues.

Five Simple Rules to Remember

It is amazing what one can find on the Internet.

I was looking for a quote about suffering and love, to be able to source it, and I found this bit of foolishness from 2001, an old posting from a chatboard, nine days before Sept 11, 2001.

I had recently 'retired' from corporate life, and was just starting to act on some personal plans that were to be changed radically by unexpected events.

Jesse's Rules for Life

Rule 1: Nothing is worth doing before 8 AM with your clothes on.

Rule 2: Never attribute to evil what can be attributed to stupidity.

Rule 3: To learn to love, we must first yearn to be comforted.

Rule 4: In any game, at least one guy has YOU pegged as a sucker.

Rule 5: Don't be a sucker.

I suppose I should add:

Rule 6: "No one knows the day or hour, not even the angels in heaven, nor the Son, but only the Father."

Corzine Gave 'Direct Instructions' To Transfer $200 Million From Customers to JPM London

Jamie's crew is probably safe, but it looks like Jon is facing his 'Kenny Boy' Enron moment, although he may find some shelter in the Sargeant Schultz defense. I know nothing. NOTHING.

I guess the fellows who said that they had found nothing incriminating in the emails forget to mention this one.

Edith O'Brien's appearance before the Congress just became potentially more interesting, although she could still plead the Fifth.  I wonder if the email turned up because so did she.

Corzine will almost certainly claim that there was a mix up, and that he merely said to meet the margin call, but did not know it involved customer funds.  He said, she said.   Save the dress.

It also looks like the spin might be that it was a 'mistake' because they were mingling customer funds with 'excess firm funds' in some third account.

And then the Anti-Bernanke of the financial apocalypse vaporized the money and all traces of it. And everyone was happy, except for a few small specs.

No harm, no foul. Just a simple error. Fine and a wristslap and a promise to better when he gets back on his Street feet.

Great job Phil Mattingly of Bloomberg for snagging this Congressional memo and releasing it.  I wonder which staffer slipped it. I'd book on GOP but I never really was a very sophisticated politico.

I still have major doubts for justice being done, but I do wish to see the customers released from their financial hell. Perhaps this will help.

Oh Jonny boy, the pipes, the pipes are calling....

Bloomberg
MF Global’s Corzine Ordered Funds Moved to JPMorgan, Memo Says
By Phil Mattingly and Silla Brush
Mar 23, 2012 4:04 PM ET

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.

O’Brien’s internal e-mail came as the New York-based broker found intraday credit lines limited by JPMorgan, the firm’s clearing bank as well as one of its custodian banks for segregated customer funds, according to the memo, which was prepared for a March 28 House Financial Services subcommittee hearing on the firm’s collapse. O’Brien is scheduled to testify after being subpoenaed this week.

“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...

Read the rest here.