US CFTC charges Corzine in MF Global collapse

Written by Reuters | Washington | Updated: Jun 29 2013, 11:28am hrs
A top US regulator charged former MF Global chief Jon Corzine over the collapse of the futures brokerage, blaming the former Goldman Sachs co-chief executive with being a key actor in one of the country's 10 biggest bankruptcies.

The Commodity Futures Trading Commission (CFTC) said on Thursday it will seek in a civil case to ban Corzine and former assistant treasurer Edith O'Brien from the industry, and also seek penalties against the two. Mr Corzine is charged with being more than a passive actor in the downfall of MF Global, CFTC enforcement head David Meister said on a call with journalists. He lacked good faith and... violated his supervision obligations.

The CFTC also settled with MF Global, which agreed to pay a $100 million penalty and funds still owed to customers, but will continue to pursue MF Global Holdings.

The futures brokerage collapsed in October 2011 under the weight of aggressive bets on European sovereign debt, after Corzine a former New Jersey governor and US senator sought to transform the brokerage into a global investment bank. But investors quickly lost confidence in the firms health when the European economy weakened in mid-2011, asking MF Global to put up more money to secure the trades, and causing its remaining cash to rapidly vanish.