Mayor Bloomberg’s top aides say the city should not play a lead role in trying to recoup millions from Jon Corzine and his bankrupt MF Global investment firm because city Comptroller John Liu has too many conflicts in the case, The Post has learned.
Liu and the city’s Law Department were pushing for New York’s massive pension funds to take the lead in lawsuits against MF Global, according to a memo first revealed yesterday by The Post. But Hizzoner’s top pension official said it would be a bad idea and could jeopardize the city’s effort to get its money back.
“The connections between the NYC Comptroller’s Office and MF Global will likely be an issue,” wrote Carolyn Wolpert, the mayor’s chief pension administrator, in a confidential e-mail obtained yesterday.
“These issues would at the very least distract from the . . . case against the company.”
Board members at one of the city’s largest pension funds yesterday were set to take a secret vote on whether to apply to be lead plaintiff. But Liu’s office refused to discuss the vote and declined to comment on the latest recommendation by Bloomberg’s top pension adviser.
City pension funds lost $9.6 million when Corzine’s brokerage went belly up on Halloween. Since then, at least nine lawsuits have been filed in Manhattan federal court by investors seeking to get at least some of their money back — and the cases are expected to be merged into one eventually.
Ordinarily, the city would be a strong candidate to lead the charge, but there’s a hitch. Two, in fact.
Larry Schloss, the officer who oversees the investments of the city’s $120 billion pension-fund system for Liu, served on MF Global’s board of directors before going to work for the comptroller two years ago.
And Liu’s office made Kevin Davis, MF Global’s CEO for a decade, a key official in the Bureau of Asset Management before Davis stepped down after his MF ties were revealed.
MF Global was a Wall Street backwater until Corzine took the helm after losing his 2009 bid for re-election as New Jersey governor.