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What a week for Jon Corzine and MF Global.
In a matter of days MF Global was shopping itself, filed for bankruptcy, couldn’t place $600 million worth of client money, spurred investigations of insider trading and announced the resignation of its CEO, Jon Corzine. Quite a week for the commodities and derivatives brokerage firm. All of that went down after the firm revealed it had $6.3 billion of bets on Eurozone sovereign debt and reported a quarterly loss of $191.6 million last week.
Now it seems that $600 or so million has been found. Bloomberg reports that the firm has located $658.8 million of customer money that was deemed missing. It was sitting in a custodial account at JP Morgan Chase, Bloomberg reports. The account actually held over $ 2 billion at the end of October and included both the firm’s and customers’ money.
The news comes on the heels of another interesting twist:Corzine’s resignation. The former co-head of Goldman Sachs and former governor of New Jersey is apparently not seeking any severance. He’s also reportedly hired lawyers–just in case this whole bankruptcy thing gets even messier.
There aren’t very many answers about why or how that money had been missing, or why it was difficult to locate. Surely the issue will raise further questions about MF Global’s internal controls. It seems, Interactive Brokers, one of the firms that considered buying MF Global’salready had some reservations on that front.
Interactive Brokers director, Hans Stoll, told the Washington Post, “The board certainly considered that purchase and stepped away from it at a point where it became clear there were lots of uncertainties about the accounts and segregated funds.”
source: forbes.com
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