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Republicans blame Corzine in MF Global failure

Associated Press Modified: November 14, 2012 at 6:00 pm •  Published: November 14, 2012
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WASHINGTON (AP) — Republicans on a House panel that investigated the collapse of the brokerage MF Global are pinning the blame on ex-CEO Jon Corzine, a former Democratic senator and governor.

The Republicans say that the investigation found that Corzine's decisions caused MF Global's bankruptcy in October 2011 and its loss of more than $1 billion in customer money.

They say Corzine turned the brokerage firm into an investment bank that made risky trades. They also say Corzine ran the firm in an authoritarian manner and didn't allow anyone to challenge his decisions.

The firm failed after losing a $6.3 billion bet on bonds issued by debt-burdened European countries such as Italy and Spain.

The House Financial Services oversight subcommittee is to release the report of its investigation Thursday.

Corzine, through a spokesman, disputed the conclusions put forward Wednesday by the GOP lawmakers. He said he "acted in good faith" at all times.

The spokesman, Steven Goldberg, called the idea that Corzine ran MF Global in an authoritarian way "hyperbole."

"All of the firm's significant business decisions, including the change in business strategy and the (European debt) investments, were subject to review, debate and approval by the MF Global board of directors," Goldberg said in a statement.

"When Mr. Corzine joined MF Global he was tasked with quickly turning around a failing business," he said. "(Corzine) set a new strategy for the firm after extensive discussions with the board, the senior management team and well-respected outside consultants."

Corzine told Congress last December that he never intended to misuse customer money or order anyone to do so.

Legal experts say it could be difficult for the government to build a persuasive case that he did.

Rep. Randy Neugebauer, the Texas Republican who heads the subcommittee, said in a news release that choices Corzine made as the firm's CEO "sealed MF Global's fate."

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