Corzine Ordered Transfer of $200 Million from Client Accounts According to Memo

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In the last days before the MF Global collapse, Jon Corzine might have ordered the transfer of $200 million from clients’ accounts. The accounts are similar to safety deposit boxes and MF Global had no authorization to touch the money to use for their own purposes. In other words, it is stealing and it is illegal.

This accusation arose from an internal email sent by MF Global assistant treasurer Edith O’Brien in which she said that the $200 million transfer came “Per JC’s [Jon Corzine’s] direct instructions.” The money was sent to JP Morgan Chase to cover an overdraft.

The money was not only stolen but it was given to JP Morgan Chase.

This is a direct conflict with Corzine’s testimony on The Hill. Through a spokesperson, Corzine said he sticks by his testimony. JP Morgan Chase has not commented.

The missing $1.6 billion is still missing. Perhaps Corzine does know what happened to the missing $1.6 billion from customers’ accounts.

CNN:…In a memo made public on Friday, staff from the House Financial Services Committee cited an internal email from MF Global assistant treasurer Edith O’Brien saying that the $200 million transfer came “Per JC’s [Jon Corzine’s] direct instructions.” This money, sent to JPMorgan Chase (JPMFortune 500) to cover an overdraft, came from customer accounts, the memo says, a gross violation of industry rules.

The memo does not say whether Corzine knew the transfer in question came from customer accounts. Testifying under oath before the House Financial Services Committee in December, Corzine acknowledged ordering this transfer to resolve the overdraft but said he had no indication that the funds belonged to customers.

“I contacted the firm’s back office in Chicago, and others, and asked them to resolve this issue, which I understood they did,” said Corzine, a former governor and senator from New Jersey. Later in the day, he added, JPMorgan staff contacted him to make sure that the fund transfer did not violate industry rules.

“Since I had no personal knowledge of the issue, I asked senior people in the back office and the legal department to become directly involved in responding to JPMorgan Chase’s request,” he said. “I had explicit statements that we were using proper funds, both orally and in writing, to the best of my knowledge.”

“I never gave any instruction to misuse customer funds, I never intended anyone at MF Global to misuse customer funds, and I don’t believe that anything I said could reasonably be interpreted as an instruction to misuse customer funds,” he added.

Still, the investigators’ memo is prompting further speculation about who in MF Global’s management knew that client funds were misused and whether or not Corzine was telling the truth. Corzine has claimed that he did not know that client funds were missing until October 30, two days after the transfer to JPMorgan…

 

 

 

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