Corzine Tells Judge That Due To Purchase Of 50,000 MF Global Shares Before Bankruptcy, He Must Acquit
That former Goldman, New Jersey and MF Global head Jon Corzine is absolutely convinced he is innocent of any client money vaporization or wrongdoing, and that the definition of the phrase “to Corzine (verb- to trust your money to a prominent individual and to find it has mysteriously disappeared)” is absolutely arbitrary, is not news to anyone. And if not convinced then at least at a complete loss to what actually happened. One just had to recall all the “I don’t recalls” the Honorable Corzine told congress during the makeshift kangaroo court hearing on MF Global’s collapse (even if the final outcome was less than desired). So it’s only logical that the Honorable Corzine asked a federal judge to “toss a civil fraud lawsuit accusing him of misleading investors about the risky bets the futures firm was taking before its collapse a year ago.” The WSJ reports that “Corzine’s lawyers blasted the investors’ suit as a “jumble of assertions and accusations” that makes “no sense” that should be dismissed in a filing Friday in U.S. District Court in New York.” The plainitffs, now led by Virginia Retirement System, “sued Mr. Corzine, other company executives and the banks that backed the trading firm, claiming they failed to disclose the risks associated with MF Global’s European sovereign debt trades using repurchase-to-maturity transactions.”
But here is the kicker: MF Global may have mismanaged trades, Corzine’s lawyers admit, but he sure didn’t hide the risks or mislead investors about the firm’s risk appetite or liquidity. Why? Because he was so convinced in the profitability of MFG he bought a whopping 50,000 MF Global shares in the open market two months before the firm collapsed. So let’s get this straight: Corzine invested awhopping $225,000 (as a reminder, Corzine was CEO of Goldman Sachs for years) because he believed in the firm and not to give the impression that the firm was “safe” in order to avoid a full blown panic once the realization its was insolvent could no longer be hidden, and be wiped out on all of his stock, option and other MFG holdings? And this is what sophisticated lawyers use as evidence of his innocence? Seriously?
Since we are rather speechless here, we hand it over to the WSJ:
Indeed, the investors’ claim that Mr. Corzine participated in a fraud “makes no sense” because, just two months before the company collapsed, he bought over 50,000 shares of MF Global stock on the open market. His lawyers argue Mr. Corzine’s stock purchase belies the investors’ claim that he sought to defraud them.
As lawyers for the banks that underwrote MF Global’s securities noted, trading firms can go under without fraud.
“Companies sometimes fail because of unsuccessful business strategies,” said lawyers for the underwriters. “However regrettable that reality, courts long have taught that such failures alone do not give rise to claims under the federal securities laws.”
Mr. Corzine’s large bets on bonds of troubled European countries panicked investors and led to the firm’s undoing. As MF Global frantically tried to sell assets and negotiate a rescue deal, the firm dipped into customer funds that aren’t supposed to be touched under federal regulations.
He testified before Congress last year that he was unaware of a shortfall in customer assets at MF Global until hours before its bankruptcy filing.
The Justice Department and regulators at the Commodity Futures Trading Commission and Securities and Exchange Commission have looked into MF Global’s demise to determine if there was any intent to remove money from customer accounts that should have been kept separate from the firm’s own funds under federal rules. To date, neither Mr. Corzine nor others at MF Global have been charged with a crime.
Sorry, we are still speechless… Because apparently if one dumps a massive 0.01% of their net worth as a sunk cost whose sole purpose is to give the optical impression that all is well, when the only purpose is to buy time from gullible investors, then, then… one may get the impression that Spain, which is doing precisely this is also… no, it’s unpossible… broke!?
And that just can’t be.