Corzine resigns as head of troubled MF Global
— -- NEW YORK — Jon Corzine abruptly resigned as chairman and chief executive of now-bankrupt MF Global Friday, four days after the brokerage collapsed in Wall Street's largest failures over his losing bet on European sovereign debt.
The brokerage announced that Corzine, a former U.S. senator and ex-New Jersey governor who once headed Goldman Sachs, "will not seek" severance payments totaling an estimated $12 million.
Edward Goldberg, the lead director of MF Global's board, and Bradley Abelow, the brokerage's president and chief operating officer, will continue in their current posts, the company said.
"I have voluntarily offered my resignation," Corzine, 64, said in a separate statement. "This was a difficult decision, but one that I believe is best for the firm and its stakeholders. I feel great sadness for what has transpired at MF Global and the impact it has had on the firm's clients, employees and many others."
Corzine said he would continue to assist the brokerage and its board as they respond to regulatory inquiries and "issues related to the disposition of the firm's assets."
His departure from MF Global, Wall Street's biggest bankruptcy since the 2008 collapse of Lehman Brothers, came as federal investigators and securities regulators explored whether the brokerage moved millions of dollars out of customer accounts as its corporate financial crisis deepened.
The Wall Street Journal reported Friday that its analysis showed MF Global may have disguised its debt levels to investors by temporarily cutting the debt it was carrying before publicly reporting its finances each quarter.
Separately, USA TODAY reported earlier Friday that MF Global separately has been targeted by lawsuits filed by court-appointed trustees trying to recover millions of dollars stolen by two Ponzi scheme masterminds who placed money with the brokerage.
The trustees in the lawsuits alleged that MF Global should have conducted stricter oversight and monitoring of the trading by the scammers, both of whom are now serving federal prison terms.
MF Global bills itself as one of the world's leading brokers in markets for commodities and listed derivatives. The 2,870-employee firm is also a broker-dealer in markets for commodities, fixed-income securities, equities and foreign exchange.
The Associated Press reported the criminal investigation of MF Global appeared to be moving forward. Corzine hired criminal defense attorney Andrew Levander of Dechert LLP, it reported, citing a person familiar with the situation who spoke on condition of anonymity because he was not authorized to discuss it. The news that he retained a lawyer was reported earlier by The Wall Street Journal.
The FBI was examining whether MF Global's actions violated criminal laws, two people familiar with the situation had told The Associated Press on Tuesday. They spoke on condition of anonymity because they are not authorized to discuss the matter publicly.
Securities firms such as MF Global are supposed to keep client money separate from company money. That way, clients can claim their assets easily if the company fails.
MF Global admitted to regulators early Monday that it could not find about $1 billion in customer money. The company has maintained that the money is being held up by trading partners that froze its accounts as it teetered last week.
