The MF Global Gamble and Jon Corzine's Lost Weekend
How about that Jon Corzine, eh? It seems New Jersey’s finest self-bought ex-Senator (and governor) bet heavily on European debt, got walloped by a cavalcade of AIG-style collateral calls streaming in from outraged creditors, and tried to stave off the inevitable by commingling client cash with his own account.
From what I gather, Corzine essentially reached into the company cash register to pay off his gambling debts. He didn’t have enough money of his own to fight off the wolves, so he took the money he had access to, in a desperate, insane hope that his bets would eventually turn around and he could replace the missing cash later on.
This is the kind of crazy, stupid, panicked, extreme-short-term thinking you might see from someone at the tail end of an epic, Ray-Milland-caliber alcohol binge – when nothing matters anymore, and even concealing the crime effectively is too much of a burden, and the only thing that matters is getting through the next few minutes.
That a former U.S. Senator and head of, ahem, the world’s most powerful investment bank would stoop to such depths is being described as shocking in some quarters. The New York Times said MF’s behavior violated a “fundamental tenet of Wall Street regulation: Customers’ money must be kept separate from company money.”
Humorously, the night before it all came out, Corzine appeared at a steak dinner and wowed the crowd with a “spectacular speech” about his years running Goldman and then entering politics. “There was no sense at all that there was impending doom,” said one of the event’s attendees.
Just another thing to keep in mind when you hear all of these bank CEOs confidently denying that they’ve ever done anything wrong, or that their companies might be sitting atop ticking time bombs of toxic assets that we’ll all end up paying for. These people are fantastic liars, right up until the moment the FBI starts rifling through their filing cabinets.
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