The most breathtaking aspect of Jon Corzine’s prepared testimony to a Congressional committee on the collapse of MF Global is his claim to know little about clearing and settlement.
Mr Corzine’s defence for the missing funds at the commodities broker that he formerly headed is ignorance – that while he knew quite a lot about trading, he left the back office responsibilities to others.
He thus did not know about the missing funds at MF Global until the Sunday night of the weekend when he was trying to strike a deal to rescue the firm.
When it comes to companies, the less murk, the better.
In the new edition of London Review of Books, author and journalist John Lanchester points out that three recent corporate “outrages” – the sale of UK lender Northern Rock to Virgin Money, the collapse of MF Global, and the Olympus scandal – share “a crucial similarity”:
An interested outside party, paying the closest of attention, and immersing herself in all the publicly available information, would have had no chance of knowing what was really going on.
The more details emerge of the shortfall in customer funds at MF Global, the financial broker formerly headed by Jon Corzine, when it collapsed three weeks ago, the more disturbing it appears.
For a time, it seemed plausible that the funds had simply been mislaid in accounts that could not be immediately accessed when MF Global went into Chapter 11 bankruptcy. But the likelihood that the money was improperly used – and lost – has increased.