August 18, 2012

Hardly News: Democrat Corzine, Others at MF Global on Track to Avoid Criminal Charges

About a month ago, I joked in a column published elsewhere that the reason a certain New York Times column didn’t resonate with anyone is because no one pays attention to the Old Gray Lady any more.

Unfortunately, that’s not true. But the fact that almost no other establishment press outlet has mentioned the paper’s disclosure late Wednesday (appearing in Thursday’s print edition) that former MF Global CEO Jon Corzine and others at the bankrupt firm likely won’t face criminal prosecution in the firm’s crack-up, which featured raiding individual customers’ accounts to the tune of $1.6 billion, seems to indicate that the Times has become a favored holding cell for stories detrimental to Democrats which will otherwise be ignored. Oh, and contrary to the belief expressed in a very long Vanity Fair item in February, when Corzine was seen to be in “a scandal he can’t survive,” and that “his career is likely finished,” the man is seriously considering starting up a new hedge fund.

Corzine, for those who don’t follow these things, also happens to be a Democrat, a former New Jersey Senator, a former Garden State Governor, and a former (maybe) Obama reelection campaign bundler.

Key paragraphs from the no excuse left behind Times story by Azam Ahmed and Ben Protess follow:

No Criminal Case Is Likely in Loss at MF Global

A criminal investigation into the collapse of the brokerage firm MF Global and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives.

After 10 months of stitching together evidence on the firm’s demise, criminal investigators are concluding that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear, according to people involved in the case.

The hurdles to building a criminal case were always high with MF Global, which filed for bankruptcy in October after a huge bet on European debt unnerved the market. But a lack of charges in the largest Wall Street blowup since 2008 is likely to fuel frustration with the government’s struggle to charge financial executives. Just a few individuals — none of them top Wall Street players — have been prosecuted for the risky acts that led to recent failures and billions of dollars in losses.

In the most telling indication yet that the MF Global investigation is winding down, federal authorities are seeking to interview the former chief of the firm, Jon S. Corzine, next month, according to the people involved in the case. Authorities hope that Mr. Corzine, who is expected to accept the invitation, will shed light on the actions of other employees at MF Global.

Those developments indicate that federal prosecutors do not expect to file criminal charges against the former New Jersey governor.

… Mr. Corzine, in a bid to rebuild his image and engage his passion for trading, is weighing whether to start a hedge fund, according to people with knowledge of his plans. He is currently trading with his family’s wealth.

… Even with the worst behind him, Mr. Corzine’s reputation has suffered lasting damage.

The pain must be excruciating. (/sarc)

The idea that Corzine wasn’t aware of customers’ accounts being raided illegally (Vanity Fair tries to argue that the moves weren’t legal, but I’m not buying it) is one of two things:

  • absurd on its face, meaning that his knowledge shouldn’t have been difficult to prove.
  • an acknowledgment that Corzine falsely attested in regulatory filings that internal controls at his firm were adequate, which would seem to make him vulnerable to criminal prosecution under Sarbanes Oxley.

But, Eric Holder’s Department of I don’t know what kind of Justice is throwing in the towel — and it isn’t establishment press news anywhere else:

  • Not at the Associated Press, where a search of the wire service’s national site on Corzine’s name returns nothing relevant.
  • Not elsewhere, based on a Google News search from August 14-18 (sorted by date), which returned a mere 60 items (the first page says 6,000, but it’s really only 60; the people at Google really need to work on this), almost none of which are from establishment press sources.

There isn’t a chance in Hades that a Republican politician turned CEO involved in a scandal of this scope would have any success in avoiding proper prosecutorial effort or intense press scrutiny for months on end — and the excuse that the Wall Street Journal and other outlets reported several weeks ago that all monies involved might be recovered “eventually” shouldn’t provide any cover.

Cross-posted at


1 Comment

  1. I wouldn’t buy a plastic spoon from Corzine, let alone invest with him.

    Comment by zf — August 19, 2012 @ 3:30 am

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