Jon S. Corzine, the former Mf Global CEO, denied claims that he had known the brokerage firm was improperly tapping customer funds to stave off collapse.
Corzine told a House panel that he had received assurances, “both orally and in writing,” that the firm followed federal laws about keeping customer money separate from firm funds.
But some lawmakers suggested that MF Global might have breached those rules on Oct. 28, three days before it filed for bankruptcy. After the firm transferred about $175 million to JPMorgan Chase to shore up an overdrawn account, the bank contacted Corzine to ensure that the money was not customer cash, according to testimony Thursday by the former CEO.
Corzine told lawmakers that a back-office employee in MF Global’s Chicago headquarters had affirmed that the funds came from the firm and not customers. “I don’t know of any loan that was backed by customer funds,” Corzine said on Thursday before the oversight subcommittee of the House Financial Services Committee. “I wouldn’t have authorized it.”
His denials came in sharp contrast to testimony by Terrence Duffy, executive chairman of the CME Group, the exchange where MF Global did business. Mr. Duffy, testifying on Tuesday before a Senate committee, said that MF Global had used customer funds to lend from one arm of the firm to another — and that Corzine had been aware of it. Mr. Duffy repeated those accusations on Thursday before the House panel, saying “in our opinion, someone has violated the law here,” though he did not specify Corzine….
http://dealbook.nytimes.com/2011/12/15/corzine-denies-knowing-mf-global-was-tapping-client-funds/
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