Jon S. Corzine
| Jon S. Corzine | |
| |
| Occupation | CEO, Chief Investment Officer |
|---|---|
| Employer | JDC-JSC Opportunity Fund |
Jon S. Corzine is the CEO and chief investment officer of the JDC-JSC Opportunity Fund, a hedge fund launched in 2018 which is banned by the Securities and Exchange Commission from conducting proprietary trading.[1][2][3] Although Corzine’s application to register his hedge fund firm was approved by the SEC in August of 2019, restrictions limit his ability to handle customer cash and invest in less-liquid assets.[4]
He is the former chairman and chief executive officer of MF Global Holdings Ltd. He resigned on November 4, 2011 after the firm declared bankruptcy due to trading positions taken under his direction and a breach of customer funds.
The MF Global bankruptcy was one of the worst failures of a futures broker in history and stemmed from trades in European sovereign debt, directed by Corzine on behalf of MF Global. The sovereign debt positions led to ratings downgrades and an overdraw from an account at JPMorgan Chase and ultimately taking customer funds to pay for it. Those funds were later returned to customers in bankruptcy proceedings over a several year period.[5]
MF Global's collapse led to a series of investigations and lawsuits against Corzine. On June 27, 2013, the CFTC charged Corzine and Edith O'Brien, another former MF Global executive, with the unlawful misuse of nearly $1 billion in customer funds related to the firm's collapse. The civil complaint said that Corzine was "legally responsible for MF Global's misuse of customer money."[6]
In January of 2017 he agreed to a lifetime ban from the regulated futures industry to settle the CFTC lawsuit, admitting that he failed to properly oversee MF Global Holdings as the brokerage spun toward failure in 2011. The CFTC suit held that he failed to "diligently supervise" MF Global and was responsible for the breach of customer account money for the firm's own trading positions. He also agreed to pay a $5 million penalty to the CFTC from his own pocket.[7] [8][9][10]
In the settlement with the CFTC, Corzine admitted his role in the collapse of MF Global and said, "As the C.E.O. of MF Global in 2011, I have accepted responsibility for its failure, and I deeply regret the impact it had on customers, employees, shareholders and others.I remain gratified that several years ago all customer money was recovered and returned to MF Global customers,” in a statement.
Corzine settled a prior lawsuit by the trustee for MF Global, following the bankruptcy. In July 2016, he settled the case for $132 million, much of which went to the MF Global estate's creditors and was paid out by insurers on behalf of Corzine and other defendants. [11]
In July of 2015, a federal judge said that MF Global Holdings commodities customers could pursue a class action lawsuit seeking at least $820 million from Corzine and other MF global officials. Former MF Global investors separately reached $204.4 million of settlements with the company's former banks, auditor and officials, including a $64.5 million accord with Corzine and other executives and directors in July 2015, which would be covered by insurance. [12]
Separately, in 2014, MF Global agreed to pay the CFTC $100 million to settle the charges. [13] [14] [15] [16]
Corzine is also a former governor of New Jersey and former chairman of Goldman Sachs.
Background[edit]
Corzine grew up on a farm in Illinois, the son of a grain farmer and a teacher.[17]
His career in finance began in 1970 at Continental Illinois National Bank in Chicago. He left the bank in 1999 and ran for the Senate the following year.[18] He served as a senator from from 2001 to 2006 and then as the governor of New Jersey from 2006 to 2010, but lost a re-election bid to Christopher J. Christie. Reports indicated he spent more than $100 million of his own money to become a senator and then the governor of New Jersey.[19] [20]
As a senator, he served on the Senate Banking, Budget, Energy and Natural Resources, Environment, Foreign Relations and Intelligence committees. He co-sponsored the Sarbanes-Oxley Act; secured funding to improve New Jersey's transportation infrastructure; and backed initiatives to expand health care for children, outlaw racial profiling, and end the genocide in Darfur. He was also one of only 23 Senators to vote against authorizing the Iraq War.
A former bond trader, Corzine spent 24 years at Goldman Sachs, eventually rising to become chairman in 1994.[21] He played a key role in helping the bank become publicly traded in 1999. He joined the firm in 1975 as a fixed income trader, and went on to serve as chief financial officer and then as chairman and senior partner from 1994 to 1999. He used some of the proceeds from the firm's initial public offering to establish a philanthropic foundation.[22]
Corzine was also an operating partner at private equity firm J.C. Flowers & Co LLC, founded by former Goldman Sachs banker Christopher Flowers, and served as a John L. Weinberg/Goldman Sachs & Co. Visiting Professor at Princeton University's Woodrow Wilson School of Public and International Affairs.[23]
Corzine was appointed chairman and CEO of MF Global on March 23, 2010, succeeding Bernard W. Dan as CEO and Alison Carnwath as chairman.[24]
MF Global filed for Chapter 11 Bankruptcy protection on Oct. 31, 2011.[25] Corzine resigned four days later.[26] The MF Global Chapter 11 bankruptcy filing came after talks to sell a variety of assets to Interactive Brokers Group Inc. broke down. There were also signs that some of MF Global's customer accounts that were supposed to be segregated and protected from the rest of the business had suffered what regulators described as "possible deficiencies."
On Dec. 13, 2011, CME Group executive chairman Terry Duffy said he had learned from an auditor with the CME Group that Corzine may have known about a loan to one of the firm's European affiliates made using customer funds. Duffy said he learned about the disclosure over the weekend and that the loan was for roughly $175 million. Duffy said the CME Group had provided this information to the Justice Department. He declined to name the MF Global executive who said Corzine was aware of the breach.[27]
Education[edit]
Corzine graduated from the University of Illinois at Urbana-Champaign with a B.A. in 1969. He received an MBA from the University of Chicago in 1973.[28]
References[edit]
- ↑ Jon Corzine’s Wall Street comeback in jeopardy so far as hedge fund attracts trickle. FOX Business.
- ↑ Corzine Accepts Prop Trading Ban in His Wall Street Resurrection. Bloomberg.
- ↑ Jon S. Corzine. Covenant House.
- ↑ Corzine Hedge Fund Firm Granted SEC Registration With Limits. Bloomberg.
- ↑ The End Of The Line. John Lothian News.
- ↑ CFTC Complaint against MF Global, Jon Corzine, and Edith O'Brien. CFTC.
- ↑ Federal Court in New York Orders Jon S. Corzine to Pay $5 Million Penalty for his Role in MF Global’s Unlawful Use of Nearly $1 Billion of Customer Funds and Prohibits Corzine from Registering with the CFTC in any Capacity or Associating with an FCM. CFTC.
- ↑ Corzine Agrees to Futures Industry Ban in CFTC Settlement. Bloomberg.
- ↑ Corzine Reaches $5 Million Settlement With Regulators in MF Global Case. NY Times.
- ↑ Corzine and risk have always gone hand in hand. WSJ.
- ↑ Corzine, others settle most litigation over MF Global collapse. Reuters.
- ↑ Corzine must face MF Global customer class action -US judge. Reuters.
- ↑ MF Global Holdings to pay $100 million fine in CFTC settlement. Reuters.
- ↑ Corzine Resigns From MF Global Days After Bankruptcy Filing. BusinessWeek.
- ↑ MF Global Lures Ex-Governor Corzine to CEO Post. Reuters.
- ↑ Regulators Charge Corzine, O'Brien in MF Global Collapse. The New York Times.
- ↑ ‘Trained to deal with adversity’. Financial Times.
- ↑ Jon S. Corzine. The New York Times.
- ↑ Why He Matters. The New York Times.
- ↑ Jon S. Corzine. The New York Times.
- ↑ Corzine’s Wall Street Résumé Loses Value for Voters. The New York Times.
- ↑ Jon Corzine profile. The Wall Street Journal.
- ↑ Former Gov. Jon Corzine appointed Princeton visiting professor. Princeton.
- ↑ MF Global Appoints Jon S. Corzine Chairman and Chief Executive Officer. Enhanced Online News.
- ↑ MF Global Holdings files Chapter 11 bankruptcy. Reuters.
- ↑ Corzine Resigns From MF Global Days After Bankruptcy Filing. BusinessWeek.
- ↑ MF's Corzine may have known of customer loan: CME. MarketWatch.
- ↑ Jon Corzine. LinkedIn.