Corzine Faces More Scrutiny On MF Customer Accounts
March 27, 2012 Congressional investigators released details of emails from just before MF Global’s bankruptcy that renew questions about whether anyone at the failed brokerage authorized the use of customer funds to cover an overdraft in London.
According to Reuters, former MF Global official Edith O’Brien said in an October 2011 email that CEO Jon Corzine gave “direct instructions” to transfer $200 million from a customer account to cover an overdraft in its account at JPMorgan in London.
The October 28 email, written days before MF Global’s collapse, was quoted in a document released in advance of a House Financial Services subcommittee hearing scheduled for next week on the collapse of brokerage MF Global and the continued search for missing customer funds. The committee this week subpoenaed O’Brien to appear before the panel.
Steven Goldberg, a spokesman for Corzine, said that Corzine has testified before Congress that he asked that the JPMorgan Chase & Co overdraft be corrected, but never gave any instructions to misuse customer funds.
“He 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,” Goldberg said in an email on Friday.
Goldberg added that Corzine testified “he recalls having received written material indicating that the funds used to cure the overdrafts were appropriate for that purpose.”
A representative for JPMorgan Chase was not immediately available for comment, Reuters reports. O’Brien served as an assistant treasurer in the firm’s Chicago office.
She has not been accused of any wrongdoing. It was not known if she might choose to invoke her right against self-incrimination at the hearing next week.
MF Global filed for bankruptcy on October 31 after it was forced to reveal that it had made a $6.3 billion bet on European sovereign debt, spooking investors and customers. Corzine resigned as CEO days later.
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