Thursday, December 08, 2011

Corzine Agonistes

Credit where it is due. Jon Corzine has reappeared and is testifying before the House Agricultural Committee. He is not taking the 5th, as I'm sure his lawyers would prefer. It's being covered live on CNBC, and attracting blogospheric attention:
Corzine: ‘I Simply Do Not Know Where The Money Is’ — A contrite Jon S. Corzine will express both sorrow and a firm defense of his actions Thursday in his first public appearance since the collapse of MF Global Holdings Ltd. in late October. — “Recognizing the enormous impact...
While he is indeed testifying and answering questions, it does not mean that he is being forthcoming. His prepared testimony was previewed by the WSJ:
"Much of the day's testimony is likely to focus on a significant shortfall in customer funds at MF Global. As Mr. Corzine scrambled to stabilize the firm in its last days, it was discovered that hundreds of millions of dollars were missing in customer accounts.

The trustee overseeing MF Global's liquidation estimates the amount at $1.2 billion. Mr. Corzine will say in his testimony that he had little to do with the mechanics of moving customer cash and collateral and that he was "stunned" when he learned on Oct. 30 that the money was missing.

"I simply do not know where the money is..."
This last is almost certainly true. The money was lost in highly leveraged, high risk trades that Corzine authorized as CEO, and he truthfully doesn't know who has the money now. But - he is disingenuously answering an irrelevant question.

The real question is not where the money is now, the real question is: How was segregated client accounts illegally mixed with MF Global trading accounts, and who authorized client accounts to be tapped for this purpose? The answer to that question points to a culprit in criminal negligence or fraud.

In the early going, Corzine was asked the relevant question whether he authorized the transfer of segregated client funds. CNBC:
"Questioned directly about the transactions leading to over $1 billion in missing client funds, Corzine could not offer clarification."I never intended to break any rules. I'm not in a position given the number of transactions to know about the movement of any specific funds. I certainly would never intend to have segregated funds moved," said Corzine."
Well. There you go. It wasn't his intent. Isn't that special? Maybe he authorized it. Maybe he didn't. But it wasn't his intent. How convenient. I wonder - who did intend for a billion or so of client funds to be moved? Could it be... SATAN???

Divided and Balanced.™
Now that is fair.

1 comment:

Tully said...

Billions missing on his watch and he doesn't have a clue where it is. Yup, he's a former Congresscritter all right.