Criminal Charges Possible in Corzine Company Probe

PHOTO: Jon S. Corzine
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A federal grand jury has subpoenaed "information and witnesses" on MF Global, the bankrupt brokerage once run by former New Jersey governor Jon Corzine, to determine how $1.6 billion in client money went missing when the firm collapsed in late 2011.

The CME Group, the exchange operator for MF Global and other commodity brokerages, said in its annual report to the SEC today that it had received two subpoenas in early November, just days after MF Global declared bankruptcy.

The annual report said that CME had been asked "to produce information and witnesses in connection with authorities' investigation of the matter" by a grand jury in the Northern District of Illinois and by the Commodities Futures Trading Corporation, the U.S. agency that regulates futures and options markets. According to CME, the trustee seeking to recover funds for MF Global investors has also made a "document request" in January. CME, which owns the Chicago and Mercantile Exchange and the York Mercantile Exchange, did not respond to a request for comment.

Officials say the missing funds were apparently used to cover losses as the company began to teeter in 2011. Client funds are supposed to be kept segregated from company money.

Corzine, who has not been charged with wrongdoing, was at the helm of the firm when it declared Chapter 11 on October 31, the eighth-largest bankruptcy filing in U.S. history. Regulators initially thought $600 million in customer funds had gone missing, but later upped their estimate to more than $1 billion. Only 60 percent of customer funds could be found.

According to the February issue of Vanity Fair, Corzine, who reportedly made over $16 million between 2010 and 2011, was shopping for a chateau in France with his wife two weeks before MF Global filed for bankruptcy.

Testifying before the House Agriculture Committee in December, Corzine said he had no idea where the $1.2 billion in missing customer funds had gone and that investigators are still untangling what happened.

Later in the month, he appeared before the Senate Agriculture Committee to deny any wrongdoing. "I never directed anyone at MF Global to misuse customer funds. I never intended to, and as far as I'm concerned, I never gave instructions that anyone could misconstrue," said Corzine.

Corzine, a Democrat, served as U.S. senator from New Jersey from 2001 to 2006. He was elected governor of New Jersey in November 2005. He became CEO of MF Global in March 2010 after losing his reelection bid to Chris Christie. Before entering politics he had amassed a fortune as CEO of Goldman Sachs. His personal wealth was estimated at $100 million in 2010.

A spokesperson for Jon Corzine declined an earlier ABC News request for comment on the MF Global collapse.

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