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Former N.J. Governor Corzine Faces Federal Civil Charges

Jun 27, 2013

Transcript

ROBERT SIEGEL, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

AUDIE CORNISH, HOST:

And I'm Audie Cornish.

He was a governor, a senator and a Wall Street success story. Now, Jon Corzine faces federal civil charges. Regulators filed them today in connection with the collapse of Corzine's commodities firm, MF Global. The government says he failed to stop the firm from misusing customer funds during the financial crisis in October 2011.

NPR's Jim Zarroli tells us more.

JIM ZARROLI, BYLINE: The Commodity Futures Trading Commission charged Corzine and former assistant treasurer Edith O'Brien with unlawful misuse of customer funds in the days before MF Global's collapse. David Meister is the agency's enforcement director.

DAVID MEISTER: The customer fund protection laws were violated on a scale never previously seen in the U.S. futures market.

ZARROLI: Meister says Corzine joined the firm in 2010 after losing his bid for reelection as New Jersey's governor. He had an ambitious plan to turn the sleepy commodities firm into a major investment bank. And he invested the firm's money in risky foreign government bonds. By the summer of 2011, the European debt crisis was exploding and the firm was running out of money. One official at the firm said MF Global was skating on the edge without much ice left. And soon, the firm was dipping into his customers' accounts to pay off money it owed.

Meister says Corzine knew what was happening but didn't try to stop it, even though he was obligated under law to protect his customers' money. Meister says one official at the firm is heard in a recorded phone call saying, quote, "We have to tell Jon that enough is enough. We need to take the keys away from him."

MEISTER: Mr. Corzine did not do enough to fix those problems and to prevent the firm from dipping into the customer funds to stay afloat.

ZARROLI: The collapse of MF Global would end up costing its customers more than a billion dollars. The commission says the firm has agreed to pay back what it owes, as well as a penalty of $100 million. Corzine himself has disputed the allegations in the past but couldn't be reached for comment today.

Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.