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Mon March 26, 2012
Did Corzine Know Money Transfer Came From Customer Account?
On Friday, we reported that former New Jersey Gov. Jon S. Corzine directly ordered $200 million transfered from a segregated customer account to an MF Global account in London, according to a memo from the House Committee on Financial Services.
Today, The New York Times reports that an email acquired by the paper seems to show that Corzine was not aware that money, which was used to cover a $175 million overdrawn account, came from a customer account.
The Times reports:
"The e-mail, sent by an executive in MF Global's Chicago office, showed that the company had transferred $175 million to replenish an overdrawn account at JPMorgan Chase in London. The transfer, the e-mail said, was a 'House Wire,' meaning that it came from the firm's own money. The e-mail, sent at 2:20 p.m. on Oct. 28 to Mr. Corzine and two of his assistants in New York, says the transfer came from a 'nonseg' account, industry speak for a noncustomer account."
In the email quoted by the House memo, an assistant treasurer seems to imply that the transfer of customer funds was approved by Corzine.
That $200 million transfer seems to have contributed to the $1.6 billion shortfall in customer funds that became apparent after MF Global collapsed.
Corzine testified before Congress that he did not order customer funds moved. A spokesman said Corzine stands by that testimony.
"[Corzine] never gave any instruction to misuse customer funds and never intended anyone at MF Global to misuse customer funds," the spokesman said.