The same day that Jersey boy and portrayer of America’s favorite made man James Gandolfini was laid to rest, another made man from Jersey, Jon Corzine, was charged by the Commodities Futures Trading Commission with unlawful use of customer funds.
Corzine had a storied career filled with success, power and connections until the MF Global blowup.
On Thursday, the CFTC (the lead regulator of MF Global) filed a scathing 47-page civil charge requesting full restitution as well as a $100 million fine and a lifetime ban from the industry for Corzine and his accomplice Assistant Treasurer Edith O’Brien.
The company is waiting for a judge to sign off on its settlement.
Until this case, the CFTC had been considered an obscure and somewhat technocratic agency focused on a complex but vital part of the market’s plumbing system that affects everyone from farmers to derivatives traders.
It is, however, a civil agency that files civil charges when it believes that the law has been violated or there have been regulatory infractions.
The CFTC wasn’t shy about lambasting Corzine and his actions. Commissioner Bart Chilton wrote, “We allege that Mr. Corzine exercised direct and indirect control over MF Global. We further allege that Mr. Corzine in bad faith or knowingly induced the customer funds to be used.” After an exhaustive investigation, that’s pretty damning .
But many on the Street are wondering: Where are the criminal charges?
On Fox Business News, Chilton called Corzine’s act a “shell game,” and when asked about criminal charges, said, “That’s the job of [the US Department of Justice]. If people do the crime, they should do the time.”
So what’s going on?
Washington is very complicated. Covington and Burling, the well-respected, politically powerful law firm that represented MF Global (and was still owed $114,275.55 for services rendered before MF’s folding on Oct. 31, 2011), was also the firm where Attorney General Eric Holder and other prominent DOJ lawyers were partners before coming to DC.
This doesn’t imply they had anything to do with Corzine’s antics; they clearly didn’t.
It just means Washington is complicated.
Here’s another: CFTC Chairman Gary Gensler worked with Corzine at Goldman Sachs and later recused himself from the case. Again, it doesn’t mean that Gensler showed favoritism with all the phone calls leading up to the massive bankruptcy of MFG; it’s just … complicated.
But one can only hope that at the very least Corzine won’t be allowed to disgrace the markets ever again with his presence.