Those who know him well, on the other hand, still don’t believe he could have known that money was being stolen. An informal survey of customers suggests that most think Corzine belongs in jail. congressmen mainly wanted to know when Corzine testified before the House Agriculture Committee on December 8. The big question now is: Where did the clients’ $1.2 billion go? corporate history, with $40 billion in liabilities, and the largest on Wall Street since Lehman Brothers. On October 31, MF Global filed for bankruptcy, the eighth-largest in U.S. I know it can work.” The safer strategy would have been to cut costs mercilessly until the company could eke out a living, but as one former employee says, “Jon didn’t come to cut a business down to size! He came to build!” His attitude was “If you build it, they will come,” and his response to criticism was “I’ve seen this before. It seemed as if he was trying to build a mini Goldman Sachs. He fired 1,400 people, including many old-timers, and hired 1,000 more, mostly high-priced talent from bigger Wall Street firms. He wants to be perceived as a winner, and he will do what it takes to get there.” Says an old colleague, “He wanted to be in the game, to prove he was back, to prove he was the man.”Īs soon as he arrived at MF Global, Corzine began radically revamping it into a full-service brokerage, one that would also buy and sell stocks and bonds for clients and use its own money both to help clients trade and to place bets for itself. He’s very focused on reputation and how he’s perceived. I was kicked out of the governor’s office.’ He knows there are people out there who don’t like him, and he wants to prove them wrong. “Ninety-nine percent of people would say, ‘I ran Goldman, I was governor-it’s time to go have fun.’ Jon looks at it as ‘I was kicked out of Goldman. “I think he is the most competitive guy in the world,” says a person who was close to him at MF Global. “He could have made a lot more money with a lot less aggravation,” says one person familiar with the details of Corzine’s deliberations.īut those who know Corzine well concluded that, at 63, he still felt he had something to prove. And while Corzine was getting a hefty pay package from MF Global-including a $12 million severance payment if the firm was sold-he had been in talks with at least one big hedge fund for a less demanding job, a role in which he wouldn’t do much besides use his Rolodex to bring in business. But his second wife, Sharon Elghanayan, had a fortune of her own. He didn’t need the money, at least in any normal sense of the word “need.” True, he’d burned through a lot of his Goldman Sachs fortune on his political campaigns and an ugly divorce, and people who had once been his peers could now buy and sell him 10 times over. In good times, this was a steady moneymaker, but as interest rates plunged after the financial crisis, so did MF Global’s profits. The firm made money in two ways: from the commissions its clients paid to do trades, and by investing its clients’ cash and pocketing the difference between the rate it paid them and the rate it was able to earn, much as a bank does. And they were farmers from all over the country who were trying to protect themselves against price swings in their crops. They were cattle ranchers who were trying to hedge their exposure to the price of livestock. They were individual investors who were using MF Global to bet on, say, the direction of oil prices. But many of its customers were from Main Street, not Wall Street. MF Global had some big customers, including Koch Industries, the energy conglomerate owned by Charles and David Koch, and some hedge-fund clients. Its decidedly unglamorous business-operating as a broker and helping customers to buy futures contracts-was a hodgepodge that included the remains of Refco, a big futures brokerage that had filed for bankruptcy in 2005. Its stock, which had traded above $30 in late 2007, was selling below $10. Not only was MF Global small compared with Goldman, it was struggling to survive. “Ten of us were e-mailing each other saying, ‘What the fuck?’ ” says a onetime Goldman trader, referring to a group of his fellow Goldman alums. On March 23, 2010, MF Global, a third-tier commodities-and-derivatives brokerage firm with a market value of less than $1.5 billion, just about one seventy-fifth of the value of Goldman Sachs at the time, sent out a press release announcing that Jon Corzine, the former senior partner of Goldman, former New Jersey senator, and former New Jersey governor, would become its new C.E.O.
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