Saturday, November 5, 2011
The MF Global Bloodbath: The two faces of Jon Corzine
Reuters writes: Sometimes it seems there are two Jon Corzines. There's the statesman-like former senator and governor, who while serving this past year as a visiting professor at Princeton University's Woodrow Wilson School of Public and International Affairs, has championed the need for stiffer regulation of Wall Street banks.
And there's the risk-loving trader with a thirst for profits, who oversaw a $6.3 billion bet on European sovereign debt that culminated with Monday's bankruptcy filing of MF Global Holdings.
The sudden collapse of MF Global, a futures brokerage firm that Corzine has run for less than two years, has left some 2,800 employees likely to be soon looking for work and put in jeopardy some $600 million in customer money.
Just over a year ago, in a speech at Princeton that was recorded and posted on Youtube, the former head of Goldman Sachs offered some rationale for why he took the job at MF Global - a move that surprised many on Wall Street at the time. He referred to himself as a "recidivist banker," and said financial regulatory reform would force big banks to get smaller and provide more growth opportunities for firms that were "too small to care about."
Now some critics are saying the MF Global CEO would have done a better job managing the busted futures firm had he worn his visiting professor cap more often than dusting off the one he wore some two decades ago as a top tier trader and CEO of Goldman Sachs Group.
"Corzine has violated every rule about what not to do," says Janet Tavakoli, a Chicago-based derivatives consultant, who has written several books on structured finance. "Corzine is a caricature of a financial meltdown."
Find out more at http://www.reuters.com/article/2011/11/03/us-mfglobal-corzine-idUSTRE79U0TT20111103
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