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House Report Blames Corzine For MF Global's Demise
Originally published on Thu November 15, 2012 6:53 am
LINDA WERTHEIMER, HOST:
House Republicans have released portions of a report on the collapse of MF Global, the commodities firm run by former New Jersey Governor Jon Corzine. The report chastises Corzine for taking excessive risk.
NPR's Jim Zarroli reports.
JIM ZARROLI, BYLINE: A House Financial Services Subcommittee spent months looking into what happened at MF Global. It held three hearings, interviewed 50 witnesses, and reviewed 243,000 documents. While the full report will be released today, the subcommittee issued a press release yesterday, containing some of the findings. It said Corzine took risky bets on European debt in an effort to increase the firm's revenue.
The report says there was an authoritarian atmosphere at MF Global that made it difficult to challenge management. When MF Global's chief risk officer warned Corzine about the firm's weak liquidity position, he referred him to a trusted aide and not to the firm's board. That meant the board was deprived of an independent assessment of what was happening. The report stops short of saying Corzine was guilty of any criminal conduct.
The report was prepared by the committee's Republican members, and for that reason it's likely to be dismissed by some critics as politically motivated. Corzine is a Democrat who served as a New Jersey senator as well as governor. Corzine's spokesman had no immediate comment on the report.
Jim Zarroli, NPR News. Transcript provided by NPR, Copyright NPR.