Current Weather
The Spy FM

Memo: Corzine Ordered MF Global Customer Funds Moved To London Account

Filed by KOSU News in Business.
March 23, 2012

Former New Jersey Gov. Jon S. Corzine directly ordered that $200 million from a segregated customer account be transfered to cover a $175 million overdraft in a London account. That’s according to a memo (pdf) from the House Committee on Financial Services, which is scheduled to hold a hearing next week about the spectacular collapse of MF Global.

As The Wall Street Journal reads the memo, the $200 million transfer “contributed to an estimated $1.6 billion shortfall in customer funds when the securities firm collapsed.”

According the memo, the transfer happened on Oct. 28, 2011. On that same day, MF Global Treasurer Vinay Mahajan sent an email demanding that the segregated customer account be “refunded ASAP,” because it was “holding up vital business in the U.S. …”

Edith O’Brien, who was an assistant treasurer at MF Global and is scheduled to appear at the hearing on Wednesday, replied by email that the transfer was “Per JC’s [Jon Corzine's] direct instructions.”

“Over the course of that week, MF Global’s financial position deteriorated, but the firm represented to its regulators and self-regulatory organizations that its customers’ segregated funds were safe,” the memo reads.

The big deal here is that in congressional testimony, Corzine has insisted he did not order customer funds moved. Bloomberg explains:

“The money transferred came from a segregated customer account, according to congressional investigators. Segregated accounts can include customer money and excess company funds.

“Corzine testified that he never intended a misuse of customer funds at MF Global, and that he doesn’t know where client funds went.

“‘I did not instruct anyone to lend customer funds to anyone,’ Corzine told lawmakers in December.”

In a prepared statement, Corzine added, “I simply do not know where the money is, or why the accounts have not been reconciled to date.”

Corzine has not issued a statement about the memo. [Copyright 2012 National Public Radio]

Leave a Reply

9PM to 5AM The Spy

The Spy

An eclectic mix of the Spy's library of more than 10,000 songs curated by Ferris O'Brien.

Listen Live Now!

5AM to 9AM Morning Edition

Morning Edition

For more than two decades, NPR's Morning Edition has prepared listeners for the day ahead with two hours of up-to-the-minute news, background analysis, commentary, and coverage of arts and sports.

View the program guide!

9AM to 10AM The Takeaway

The Takeaway

A fresh alternative in morning news, "The Takeaway" provides a breadth and depth of world, national and regional news coverage that is unprecedented in public media.

View the program guide!

Upcoming Events in your area (Submit your event today!)

Streaming audio and podcasts

Stream KOSU on your smartphone

Phone Streaming

SmartPhone listening options on this page are intended for many iPhones, Blackberries, etc. with low-cost software applications available to listen to our full-time web streams, both News on KOSU-1 and Classical on KOSU-2.

Learn more about our complete range of streaming services

We're perfecting the patient experience - Stillwater Medical Center