Shipkevich Bitcoin and ICO Attorney
Felix Shipkevich November 4, 2011

MF Global CEO John Corzine stepped down this morning, after the FBI announced that it is intensifying its probe into the hundreds of millions missing from thousands of commodities accounts. In a statement, Corzine said that he feels “great sadness about what has transpired at MF Global and the impact it has had on the firm’s clients, employees and many others,” and plans to assist remaining board members as they plan the firm’s final days. The resignation, he says, was voluntary.

Meanwhile, the FBI’s investigation of MF Global is barreling ahead. The Bureau is searching for MF Global actions that may have violated criminal law. The U.S. Attorney General’s Office in New York conducting a similar examination. The FBI, Attorney General’s Office, and the CFTC are searching for $600 million missing from 50,000 customer commodity accounts. This money was supposed to be held in accounts segregated from the firm’s own accounts, safe from a firm bankruptcy. The company claims that the money is tied up by other trading partners, who froze MF Global’s assets last week.

In response to the investigation, Corzine has hired a criminal defense attorney. He also appears to be courting public goodwill–the outgoing CEO says he will not pursue the $12.1 million “golden parachute” severance package offered in his contract. Corzine’s association with MF Global may spell trouble for CFTC Chairman Gary Gensler. Gensler and Corzine built close ties when they worked together at Goldman Sachs, and since then they have collaborated on financial reform measures.

However, the CFTC chairman is focusing on the regulatory implications of the issue at hand: “The most troubling aspect about the MF Global situation is the shortfall of customer money at the firm. Segregation of customer funds is the core foundation of customer protection in the commodity futures and swaps markets,” he said in prepared testimony before a Senate subcommittee. “Segregation must be maintained at all times. Simply put, that’s every moment of every day, down to the nanosecond.”

Read more about the MF Global bankruptcy.
Creative Commons License photo credit: Alex E. Proimos

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