The key question surrounding the MF Global collapse concerns client money. What happened to it? Was it used to back the risky loans that Jon Corzine favored making, the ones that caused MF Global to fall apart?
Corzine denies having used client funds, but others aren’t buying his story:
Jon Corzine, the former chief executive of MF Global, “was aware” that the broker-dealer made use of customer funds during its desperate fight for survival, a US Senate hearing was told on Tuesday.
Terry Duffy, chief executive of CME Group, the futures exchange operator that supervised MF Global’s handling of customer money, said a CME auditor heard an MF Global employee say during a conference call involving senior MF Global employees that “Mr Corzine was aware of the loans being made from segregated accounts”.
So, the plot thickens. Of course, Duffy is far more believable than is Corzine; other than being used to back the risky loans, what else could have happened to the client funds? A certain ad still needs to be made, and it needs to point out that the man the president and vice president of the United States called up for economic advice in all likelihood broke the law, and is now lying about it.