by Azam Ahmed and Ben Protess, Dealbook
Publisher‘s Note: MF Global and Ex-CEO Jon Corzine – the former $ trillion taxpayer-funded Goldman Sachs bailout Chief and cronies, the largest Wall Street Crime since 2008, are walking away unscathed, though the obvious failed stewardship of the firm, thanks to the American ‘justice’ system. Unfortunately, this corruption incident seemed like a mere entertainment and diversion because American priorities are quite wacked. They prefer Assange versus the ones who are ‘secretly’ putting Americans on the hook for over $250 trillion (with a ‘T’) in global derivatives, and putting them in perpetual slavery and debt. The Ponzi Master-wizards simply can not afford to let US taxpayers pullback the curtain on one of their ‘lackey wizards’ operating freely in the land of make-believe. The poor Americans have been duped, abused, raped, and all you can imagine: Feds ‘quietly’ bailing out the likes of Harley-Davidson, Verizon, Toyota, Citigroup, Bank of America, Swiss-based UBS, Britain’s Barclay and countless others. Of course, we can just ignore the Geithner connection…or not. But if you are still one of the Sheeples, do ignore the Eric Holder MF Global connection: HERE. We can also do a short recap if anyone cares: Between 2008 and 2010, Goldman Sachs sent billions of American taxpayer dollars to 32 entities, including many overseas banks, hedge funds and pensions – as reported by the Senate Finance Committee. Asked about the significance of Goldman’s ‘disclosed’ global recipient list (under threat of subpoena), Senator Chuck Grassley stated, “We thought originally we were bailing out AIG. Then later on…we learned that the money flowed through AIG to a few big banks, and now we know that the money went from these few big banks to dozens of financial institutions all around the world.” Jon Corzine, an ex-Goldman Sachs CEO and former Democrat New Jersey Governor, ran the firm into the ground in about as reckless fashion as possible and deserves all the contempt that has been heaped upon him. Not only are they not holding him accountable, but in a sadistic twist, he has been given a position to put other people in jail! O’Brien was central to the transfer of funds at issue. She sought full immunity and was apparently denied. There’s a lot going on behind the scenes, but it now appears her gambit has failed. She just might be the only person charged in this mess, though Corzine is reportedly not of a mind to provide damning testimony. Yes, make the woman a scapegoat. In the end, it’s likely that no one will be criminally charged as per this article reports. Funny, how USA preach about human rights. None of us can see the government care for the people. I can also assure you that China does much better job in hunting down corrupt people and punishing them. But they always cover their backs at Wall Street as they have bought US Congress (of any party) that is more than willing to serve their own materialistic Egos, than serve the people. May Americans wake up and clean up their entire government.
August 18, 2012 (TSR) – A criminal investigation into the collapse of the brokerage firm MF Global and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives.
After 10 months of stitching together evidence on the firm’s demise, criminal investigators are concluding that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear, according to people involved in the case.
The hurdles to building a criminal case were always high with MF Global, which filed for bankruptcy in October after a huge bet on European debt unnerved the market. But a lack of charges in the largest Wall Street blowup since 2008 is likely to fuel frustration with the government’s struggle to charge financial executives. Just a few individuals — none of them top Wall Street players — have been prosecuted for the risky acts that led to recent failures and billions of dollars in losses.
In the most telling indication yet that the MF Global investigation is winding down, federal authorities are seeking to interview the former chief of the firm, Jon S. Corzine, next month, according to the people involved in the case. Authorities hope that Mr. Corzine, who is expected to accept the invitation, will shed light on the actions of other employees at MF Global.
Those developments indicate that federal prosecutors do not expect to file criminal charges against the former New Jersey governor. Mr. Corzine has not yet received assurances that he is free from scrutiny, but two rounds of interviews with former employees and a review of thousands of documents have left prosecutors without a case against him, say the people involved in the investigation who spoke on the condition of anonymity.
While the government’s findings would remove the darkest cloud looming over Mr. Corzine — the threat of criminal charges — the former Goldman Sachs chief is not yet in the clear. A bankruptcy trustee on Wednesday joined customers’ lawsuits against Mr. Corzine, and regulators are still considering civil enforcement actions, which could cost him millions of dollars or ban him from working on Wall Street.
Mr. Corzine, in a bid to rebuild his image and engage his passion for trading, is weighing whether to start a hedge fund, according to people with knowledge of his plans. He is currently trading with his family’s wealth.
If he is successful as a hedge fund manager, it would be the latest career comeback for a man who was ousted from both the top seat at Goldman Sachs and the New Jersey governor’s mansion.
A spokesman for Mr. Corzine declined to comment.
Even with the worst behind him, Mr. Corzine’s reputation has suffered lasting damage.
After the collapse of the firm, which left farmers and other MF Global customers out millions of dollars, Mr. Corzine became another face of Wall Street recklessness. Lawmakers called him back to Washington, a humbling return to the town where he once served as a Democratic senator from New Jersey, to seek answers and to criticize him. With a criminal case unlikely to materialize, the anger over the collapse of MF Global is likely to grow.
Typically in white-collar cases, investigators start their interviews with lower-level employees and build up to the top executives of a firm. In July, when federal authorities first approached Mr. Corzine’s lawyers, it was not clear whether he would agree to an interview. But the signs were good. In such cases, if prosecutors have damning information, they often file charges rather than extend an offer for a voluntary interview.
Though he is now expected to attend the meeting, questions remain about which government agencies will join. Because Mr. Corzine still faces scrutiny from regulators, including the Commodity Futures Trading Commission, their attendance could pose a problem. These agencies, which have a lower bar to proving civil wrongdoing than do criminal authorities, are examining whether top executives misled investors about the firm’s health and failed to protect customer money.
The C.F.T.C, the Federal Bureau of Investigation and the United States attorney’s office in Manhattan declined to comment for this article.
As the government’s focus shifts away from Mr. Corzine, it remains interested in a lower-level employee in the firm’s Chicago office, who was known as the “keeper of the books” at MF Global. That employee, Edith O’Brien, oversaw the transfer of customer money during the firm’s final week, when the client cash vanished into the hands of banks, clearinghouses and even other customers.
Ms. O’Brien, an assistant treasurer, has declined to cooperate with authorities without receiving immunity from criminal prosecution. The government is hesitating to grant her request, suspecting that Ms. O’Brien is the highest-ranking employee with potential liability, one of the people involved in the case said. Ms. O’Brien has not been accused of any wrongdoing.
If Mr. Corzine agrees to a meeting next month with the F.B.I. and federal prosecutors, the authorities are expected to question him about his interactions with Ms. O’Brien. But Mr. Corzine is unlikely to offer damning evidence or a critical view of Ms. O’Brien, another person briefed on the matter said. The statements Mr. Corzine provides cannot be used against him under the expected terms of the interview, but authorities can use it to build their broader case. And if Mr. Corzine were to arouse suspicions during the interview, he could find himself a target.
Mr. Corzine has already given his version of events publicly. In Congressional testimony last year, he detailed an exchange he had with Ms. O’Brien days before the firm’s collapse. The back and forth involved a $175 million transfer toJPMorgan Chase to cover an overdrawn account. The transfer, it turned out, came from customer money.
But internal e-mails suggest that Mr. Corzine did not know the origin of the funds. An e-mail reviewed by The New York Times shows Ms. O’Brien explicitly stated that the money belonged to the firm, not customers. It is possible that with the books in disarray, Ms. O’Brien was not aware that customer money was in jeopardy.
A lawyer for Ms. O’Brien declined to comment.
While Mr. Corzine also testified that he never authorized or intended to authorize the misuse of customer money, his risky trading strategy helped pave the firm’s downfall.
Known as an obsessive trader who had the highest returns at the firm, Mr. Corzine frequently inhabited a desk on the trading floor. One visitor to MF Global recalled that during a tour of the firm’s Manhattan headquarters, his guide suggested that if he “stuck around” he might catch the chief executive trading a few million dollars in bonds.
As the firm’s leader, Mr. Corzine was upbeat about its future, writing an e-mail to employees in January 2011: “Let’s be an example of how to do it right and play a leadership role in restoring confidence in our industry.”
But a $6.3 billion wager on the European sovereign debt proved fatal. The size of the bet was enough to wipe out the firm many times over, and as questions about Europe’s health grew, a run on MF Global ensued. In the panic, the firm tapped customer money to stay afloat, which scuttled a last-minute deal to save the firm. Mr. Corzine resigned just days after the firm filed for bankruptcy.
Originally published in Deal Book.