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.
The collapse of MF Global has begun to shine a spotlight on the top federal regulator investigating the matter.
Gary Gensler, head of the Commodity Futures Trading Commission, is leading the inquiry into how hundreds of millions vanished last week from client accounts at MF Global.
He built close ties to Corzine — and eventually worked for him — as they rose through the ranks of Goldman Sachs. Later, they collaborated on Capitol Hill to pass an anti-corporate fraud law.
Corporate governance experts said Gensler's ties to Corzine posed an apparent conflict of interest that could taint the probe's findings. And on Wednesday, Republican Sen. Charles Grassley of Iowa, who sits on the committee that oversees Gensler's agency, said "it's hard to see how the chairman could be completely objective in looking out for wronged investors when he has such strong ties to the principal of the failed firm."
A statement filed with the brokerage's Chapter 11 bankruptcy petition said MF Global had $41 billion in assets and $39.7 billion in liabilities as of the quarter that ended Sept. 30. The company reported in October that it posted a $191.6 million net loss in the second quarter compared with a loss of $94.3 million for the same period last year.
The largest unsecured creditors listed in MF Global's bankruptcy includes bond debt to JP Morgan Chase Bank and Deutsche Bank Trust.
Contributing: The Associated Press