A congressional panel outlined a withering critique of Jon S.
Corzine's 19-month reign at the firm. Mr. Corzine resigned as chief
executive after the firm raided customer accounts during a fight for
Congressional investigators have taken aim at a former colleague, Jon S. Corzine, saying the onetime senator's risk-taking at MF Global accelerated the brokerage firm's demise.
In excerpts from a broader MF Global report that was to be released Thursday, Republican members of a congressional panel outlined a withering critique of Mr. Corzine's 19-month reign at the firm. Mr. Corzine, a former Democratic senator and governor from New Jersey, resigned as MF Global's chief executive last fall after the firm raided customer accounts during a futile fight for survival.
The attack on Mr. Corzine, leveled by Republicans on the oversight panel of the House Financial Services Committee, appeared to delineate political battle lines that have emerged since MF Global's collapse. Democratic members declined to endorse the report, saying they needed additional time to study the findings.
Mr. Corzine could seize on the uncertainty. The fractured support offered his backers an avenue for dismissing the report as a political attack on the former Democratic politician.
But congressional officials noted Wednesday that Democrats had supported large parts of the report and even contributed changes to the final draft. The report, the officials said, offers an unbiased lens for viewing the firm's final days.
While lawmakers avoided blaming Mr. Corzine directly for the disappearance of customer money, sidestepping the question of whether a crime had been committed, they argued that his fixation on taking risk had helped topple the firm. The report labeled Mr. Corzine the "de facto chief trader," an unusual title for a top executive.
"Choices made by Jon Corzine during his tenure as chairman and C.E.O. sealed MF Global's fate," Representative Randy Neugebauer, a Republican from Texas who is overseeing the report as chairman of the oversight panel, said in a statement.
In a series of potential missteps, the report said, Mr. Corzine missed warning signs about MF Global's weak liquidity. Citing "a dereliction of his duty," the report claimed that he had left customers vulnerable to the invasion of their accounts.
The report further asserts that Mr. Corzine was the architect of a $6.3 billion bet on European debt -- a trade so big it spooked the markets and led to a run on the firm. When subordinates challenged Mr. Corzine's European gamble, according to the report, he imposed an "authoritarian atmosphere" in which he ejected the aides and installed sympathetic executives he knew from his days at Goldman Sachs.
Though the findings made a case for civil and regulatory action, the report shed little new light on Mr. Corzine's actions and hardly chipped away at his legal defense. The U.S. authorities have all but officially removed the darkest cloud looming over Mr. Corzine: the threat of criminal charges.
Most Popular Stories
- Consumer Prices Edge Up, Surprising Economists
- Do Voters Want Compromise?
- Clinton Rallies New England Women
- Timeline for New York Ebola Doctor
- Market Jolt Offers a Reality Check for Investors
- Stocks Close Out Best Week in Nearly 2 Years
- 'Kissing Congressman' Admits Mistake in Reelection Bid
- Ebola in New York, Mali Raises Travel Jitters
- Microsoft Earnings Drive Stocks Higher
- Steris to Add 100 Jobs in Birmingham