Jon Corzine, Victim
How dumb does Jon Corzine think we are?
The WSJ has this hanky puller on his struggles to move on from the wreckage of MF Global:
And the 65-year-old Mr. Corzine is struggling to figure out what comes next for himself, according to friends and former coworkers.
I can hardly type through the sobs.
Stand at LaSalle and Jackson or 10-30 S. Wacker and see how much sympathy you get, Jon. I’d bring bodyguards.
But here’s where Corzine insults our collective intelligence:
Allegations from shareholders and bondholders that he hid problems or committed fraud at the brokerage firm make “no sense” because he had “no motive,” Mr. Corzine’s lawyers said in a court filing, citing his ownership of 441,960 shares in MF Global. The stake includes 50,000 shares bought shortly before the bankruptcy filing.
Uhm, equityholders in firms teetering on insolvency, or which are insolvent, have a huge incentive to hide problems or commit fraud or take huge risks. It’s called gambling for resurrection. Fraud or concealment permit the firm to survive-and maybe it will get lucky. If things get worse-that hurts only the bondholders, who lose more when the firm loses even more value. The stock was already worthless. Ditto with taking on risk: if the insolvent firm’s bet turns bad, that just deepens the bondholders’ losses without hurting the equity holder, but if the bet turns out well the equity profits disproportionately.
Most frauds and concealment of losses are carried out by shareholders. These are ways of stealing from bondholders.
The only thing that makes no sense is Corzine saying he had no motive. And he expects us to believe that.
Corzine’s other defense is that MF Global’s failure was due in large part to its completely deficient accounting and control systems. But that throws him into the Sarbanes-Oxley fire, for he signed off on the soundness of those systems.
Corzine is obviously ginning up the PR machine to try to build sympathy and lay the groundwork for a comeback. Don’t do the world any favors, Jon. You’ve done quite enough already.
Single handedly killed an industry that took 150 years to build. Almost bankrupted a clearing house or two….
Comment by Jeff — October 30, 2012 @ 4:29 am
[…] Corzine wants us to feel sorry for him. Sorry, I don’t. James Koutoulas tweets, “hope you are comfortable in a cotton orange […]
Pingback by Breakfast Links | Points and Figures — October 30, 2012 @ 5:08 am
Best part: He has “kicked around the idea of managing money after the MF Global mess is cleaned up.” Who would actually let this guy manage money? Is there no basement for stupidity?
Comment by Hal — October 30, 2012 @ 7:22 am
Unbelievable. He might have had an argument if he had said, “I hadn’t realized that MF was really just Refco and all the crooks were still there. They tricked me!” Of course, he wasn’t tricked. He just took Bennett’s old position. To bad he and Bennett can’t share a cell.
Comment by Highgamma — October 30, 2012 @ 10:20 am
Corzine is so full of it he could manure Kansas. He is enough to make one have warm and fuzzy thoughts about Felix Dzerzhinsky. The one useful purpose he serves is to show how SOX and FrankenDodd are useless: unless someone opens their mouth, no one is going after Corzine. The way the laws are written now having to positively prove criminal intent, you can dance around almost anything. Look at the loathsome creep Clark Clifford’s defense during the First American / BICC scandal. If you have enough political and economic chips, you cannot be touched.
We cannot legislate honesty, intellectual or otherwise. What we can do is to show that we will not tolerate is for these idiots to go unpunished.
I think it is time that we add to the laws, civil and criminal, the idea of reckless endangerment. That it is that there is a positive responsibility of senior officers of a firm to act in a proactive way before and during a mess like JOJO’s debacle. Losses incurred through “confusion” or”systems failures” such as stealing customer funds and transferring them automatically to an account set up to transfer the funds to offshore collateral accounts would be in itself criminal, or at least open the officers who should have known, and were paid to know, to criminal liability at a State and Federal level. Harder to bribe your way out of it.
Comment by Sotos — October 30, 2012 @ 12:44 pm
PostUnbelievable. He might have had an argument if he had said, “I hadn’t realized that MF was really just Refco and all the crooks were still there. They tricked me!” Of course, he wasn’t tricked. He just took Bennett’s old position. To bad he and Bennett can’t share a cell.
Comment by Highgamma — October 30, 2012 @ 3:20 pm
BCCI not BICC – sorry.
Comment by Sotos — October 30, 2012 @ 4:07 pm
I saw a video of Marc Dreier’s last day of freedom-truly fascinating. He made it clear that he could not tolerate a cellmate who snored and expected sufficiently good variety for his meals. He wanted his lawyers to petition for lenience on the basis that he did nothing worse than a shoplifter but only that he had far larger opportunity than a shoplifter.
I agree that the only acceptable substitute for a conscience is a very long prison term.
Comment by pahoben — October 30, 2012 @ 7:21 pm
[…] The entire industry lost confidence. This had never happened before, and at this scale. Here is what Economist Craig Pirrong, an expert on the futures industry, said back in October of 2012. […]
Pingback by Did Corzine Get Justice? | Points and Figures — October 8, 2016 @ 8:31 am