In Defense of Corzine

by Susan Gidel | Apr 10, 2013

In a very unlikely setting last night, coming from a very unlikely source, I heard a lecture speaker let loose with a venomous attack on Jon Corzine, former head of MF Global. Slightly paraphrased, but this was the gist of it:

“Why is Corzine still walking free? He stole people’s money and should be in jail.”

I was shocked on three counts. First, it’s been 18 months since that all went down. Second, I didn’t expect this person to have paid that much attention to the MF Global story. Third, the anger was palpable.

I’m not angry and I worked for the guy. Lost a great-paying job that I loved. Got kicked out on the street with 30 minutes warning and no back vacation pay or severance.

So, I introduced myself at the end of the evening and said that I had worked at MF Global.

“What did you think of Corzine?”

I tried saying that I thought he was a play-by-the-rules kind of guy at heart and wouldn’t have intentionally or consciously violated segregated fund rules.

But, I was interrupted:
“He stole people’s money and should be in jail.”

I tried explaining that, from my perspective, the accounting department was in disarray from even the most basic level and that it wouldn’t have surprised me to think that there simply wasn’t a good way in that last, rip-roaring week to have been confident about whose money was really where. Phones had been ringing off the hook as customers tried to get funds wired out. The exchanges and banks were breathing down the company’s neck.

But, I was interrupted:
“It was his company, and he speculated with it and it failed and people’s money is missing.”

All true, I agreed. And, I tried explaining that just because he might not have run the company very well doesn’t mean that he intentionally violated seg fund rules. 

But, I was interrupted:
“He was CEO and he stole people’s money. He should be in jail.”     

And that’s when I walked away. It’s not a conversation when only one side is willing to listen.

Believe me, I’m as disgusted as anyone that the very bedrock of the futures markets—segregated funds for clients, held separately from company funds—was blown to smithereens by my former company.  Having money in a commodities trading account was safer than having money in a bank. It had worked for a hundred years, and overnight, that trust was gone. 

But, geez. Get over it already. Did you have a million-dollar account there? Because if not, then me and many of my couple thousand colleagues probably were more harmed than you. We’ve moved on.  And so should you.

© Copyright 2013 SusanGSays LLC

  

13 Comments

  1. 1 Peter Ninen 15 Apr
    You seem a bit confused.  You admit that the accounting department was in disarray.  That's putting it mildly.  If you or I were handling billions of $ of customer money, don't you think we have a responsibility to keep the accounting department in good shape?  You bet we do, and there are plenty of regulations to make sure we do.  If you and I were as sloppy as MF Global, we'd be in jail.

    That's the point.  Somebody has to be held accountable. 

    Otherwise, the entire financial system falls into disarray.
  2. 2 MMT 13 Apr
    Not the best demonstration of your talent. Or marketing. You are saying the wrong thing at the wrong time to the wrong people. Take a cold shower and wake up to reality: Corzine is a crook who belongs in jail.
  3. 3 Susan Gidel 12 Apr
    Thank you all for your comments. I'm glad we're able to speak freely on this topic.

    Let me be clear. I'm all for righting the wrongs that occurred because of MF Global's failure. Many people have suffered, and the industry has been irreparably harmed. But my point for writing what I did is that I think a lot of the anger and finger-pointing is misdirected. If Corzine is completely to blame, then I agree that he should take the fall and sit next to Russ Wasendorf and Phil Bennett in jail. But, where are the lawsuits and criminal charges? Swept under the rug by his political friends? If that's the case, then that's what we should all be focusing on. Not the head of a single individual, but rather the system itself. Personally, I think there's a lot of blame to go around, starting with the Board of Directors, who according to some reports I've read, did not put its foot down when Corzine's risky foreign debt trades were initiated, nor even before when they were aware he was behaving more as a trader than a CEO, nor when the risk-manager who brought serious information to their attention was quickly dismissed.

    As for being callous about the money involved, let me remind you that clients have gotten a very large percentage of their account funds back from the estate thanks in large part to some great work and persistence by the Commodity Customer Coalition. Not 100%, no. And, I know that the delivery aspect was a complete disaster. But, I lost not just a percentage of my business. I lost 100% of my livelihood, and the opportunity cost in the last 18 months as a result is into the six figures. Many of my former colleagues are in the same boat, perhaps even worse, because some of their paid earnings were forced into a stock-buying program. They earned money that they couldn't use or access that simply evaporated as the MF stock became worthless. There is no recourse in either of these situations. Life is full of risk. I accept that, which is why I have moved on.
  4. 4 KIR 12 Apr
    I did not have a penny with MF Global.  But, my personal realized losses as a result of your former boss's indiscretions is in the millions and counting.  I have several, honest, colleagues who have been put out of business as a result of these crimes.  It is sad that you cannot see the indirect causal tidal wave that has handicapped the entire financial industry.  I do not know a single futures broker or trader who has not been punished for Cozine's misdeeds.  The amount of margin for a small to medium trader has been raised 100-1000%.  That margin money must be in cash and it cannot gain greater than 0.0%.  They cannot borrow additional fund to be parked in a margin account.   And in this post corzine regulatory environment,  the exchange and the firms have zero discretion, tolerance, or lenience for margin issues.  Quite simply, our fed govt chose to punish innocent market participants in the present and the future rather than to hold accountable an Goldman Alum.
  5. 5 BOK 12 Apr
    there are plenty of people who had million dollar accounts. commodity trader colleagues of mine and otherwise. the amount of money in the account is irrelevant. what is relevant is that people lost money they couldn't afford to lose, in a place that should have been safe, because corzine and his cronies were negligent and irresponsible.
  6. 6 RIch 12 Apr
    While I am sympathetic of your personal loss regarding this tragedy, Susan, it seems you are missing the bigger picture. I am, much like yourself, in the 'let go' category when things go terribly wrong. Often that is the best mental strategy for personal growth and survival.

    This incident of ComminglerZine goes far beyond the capacity of acceptance. If you genuinely believe his political connections did not prevent him from being charged through the proper government agencies for criminal offenses, then I am sorry you are so deluded. Wassendorf will not be escaping as easily; he is not as closely tied with people in the White House.

    It seems to me that as an employee of the firm making justifications that things were in disarray as an excuse perhaps reveals more about the culture of the firm that lead to its demise. And to make the distinction that the net size "Did you have a million-dollar account there?" of a persons assets is relevant further elucidates this point. What difference does it make how large or small the account was in size? How about the small grain farmer that had only $25,000, but it represented 30% of his net worth? Or other investors and traders whose personal finances were thrown completely into shock when this happened? The fact that people are so outraged is because he stole, he lied to Congress and he continues to be walking freely while still trading his own account (mere speculation based upon news reports. Citation available if necessary.) How long did it take for the grain farmer to get his money back? How did it adversely affect his ability to run his business at the mercy of grain prices and have no ability to hedge?

    Your passive ignorance is disturbing and explains how men like Corzine can so easily run roughshod over the masses while quietly using his charm and charisma to have folks like you out there downplaying his criminal actions. That is the real crime; those that allowed this to happen, did not reveal their knowledge to regulators and continue to stand in defense of this vile human being. He is clearly above the law; he is clearly not on equal footing with the rest of us; and he is definitely not going to be paying his 'fair share' for his actions.

    I'll go out with a quote: "All that is necessary for evil to succeed is for good men to do nothing." ~ Edmund Burke
  7. 7 Mark Melin 11 Apr
    I submitted evidence to MF Global investigators regarding the incident.  Your article omitted several points.

    MF Global was documented to have received direct orders from a regulator not to transfer customer assets.  Mr. Corzine after this ordered transfers.  Mr. Corzine's decision was directly questioned by JP Morgan and other MF Global employees on the topic.  The asset transfer in question was known to be illegal as it moved from one JPM account to another.  When the conversations and actions in the incident are public, it is clear MF Global executives mis-represented facts / deceived JPMorgan executives in order to facilitate an illegal asset transfer.
  8. 8 Jerry 11 Apr
    Those of us who have been affected by the MF Global debacle will be aware of an ongoing, concerted campaign to rehabiltate Jon Corzine, presumably funded by the multimillionaire himself. This article is just another blatant attempt to defend the indefensible, so I think we have to wonder about the writer's motives.

    To put the record straight, Corzine is a criminal and a psychopath. If he were not so well connected, and if the justice system was not so corrupt, he would currently be serving time. As it stands, Corzine rarely ventures out in public, and appears to have placed himself under self-imposed house arrest. He is clearly concerned for his own safety. Long may that situation continue.
  9. 9 Martin J 11 Apr
     Get over it! Since when is doing something illegal to people something to just get over? Corzine and all responsible parties are not above the law. It's time for the Justice Department to stop dragging its feet and let due process be done.
  10. 10 Mark 11 Apr
    I agree that Corzine should be in jail. I'm in the business and the harm from the MFGlobal and PFG debacle is horrific. Corzine knew better and unfortunately will probably get to pass go, collect $200.00 and be able to play the get out of jail free card because of his political connections. By your way of thinking we should just tell the public "We mismanaged your funds and you lose, so suck it up." I hope karma bites Corzine back!
  11. 11 Tom Bahr 11 Apr
    "move on", eh? If your husband, child, parent, someone you revere is struck and killed by a DWI, should you 'just get over it' and plead the drunk be allowed to walk free?  As for the Accounting Department being disorganized, the heckler you mention is correct: the CEO is responsible for running an effective business and even if under stress as you describe, disaster planning for strained times in the life of a business is standard practice.  Corzine is part of the culture of unenforcement of white collar crime that has undermined trust and confidence in our economic system & he IS responsible. Your "million dollar account" threshold remark shows your own insensitivity to fiduciarial responsibility, quite possibly a result of you having to accept people like Corzine being able to walk free. 
  12. 12 Ted 11 Apr
      Susan,you were able to move on easily .Many of us were not in that postion to move on after our money disappeared!
  13. 13 Jeff Loper 11 Apr
    As a former licensed futures professional I do not for a second believe that Mr. Corzine was unaware of the activities occurring under his watch.

    His political life is filled with conflicting statements and promises, so I have no faith in ANYTHING he has claimed.

    I have been a CEO and his failure as a fiduciary is in my opinion criminal. In fact it is now a criminal offense to let things like this occur under ones watch since the new banking regulations.

    I find it amazing how rich guys like this get into politics and point the finger at others when their house is dirty. 

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