International News • Re: Jon Corzine Says Sorry, But I Dont Know Where the Money
Jon Corzine Hearing, Where Were The Tough Questions?
Jon Corzine, former CEO of bankrupt MF Global, was subpoenaed to testify before the House Agriculture Committee. Yesterday, he spoke for the first time since his resignation from MF Global on November 4, 2011…and honestly, I was in the camp that he would not speak (i.e. Take The 5th). However, Corzine had a 21 page statement (He only read a portion of it, skipping the part about his childhood and other meaningless facts) and answered every question that was put to him by members of the committee.
The questioning of Corzine by House members did not have many dramatic moments as other committee hearings that called corporate leaders to task. Compare yesterday’s hearing to Lloyd Blankfein‘s (CEO Goldman Sachs) ass-chewing he got for creating collateralized debt obligations (CDOs) for clients and then Goldman betting against those same investments (shorting) for a profit. Senator Carl Levin, asked Blankfein, “Do you think if your people (Goldman) think something is a piece of crap and then go out and sell that, then your company bets against that, do you think that deserves your trust?” Blankfein fired back with his own reasoning, but you get the point…darts were flying. Not so with the Corzine hearing. It was difficult for journalists and bloggers to find a tag line that captured the hearing (By the way, many thanks to Rod Blagojevich for his “Unbelievably Sorry” quote).
Why were the questions so easy? Here are the questions that I would have asked that, amazingly, were not asked at the Corzine hearing:
1) Why did you quit? Jon Corzine’s last minute deal to sell MF Global to Interactive Brokers fell apart at the discovery of missing funds and his solution was to quit. Ask any forensic accountant or FBI agent if they think a person “ quitting” is suspicious if they do so upon the discovery of missing funds.
2) Examiners from CME Group said that transfers at MF Global were made, “in a manner that may have been designed to avoid detection.” Should the person who attempted to avoid this detection be held accountable? It’s one of the “yes” or “no” answers that a good politician can avoid but it looks good on the record. It also sends a warning sign to the folks still back at the MF Global office that the boss is prepared to let someone go down for their actions…even if that action was meant to meet some short term goal of the CEO.
3) Who should we speak with at MF Global, besides you, that was directly responsible for segregating customer account funds from MF Global funds? We want a name….any name from MF Global. The commission needed to have Corzine go on the record by throwing someone who is still back at the MF Global office under the bus. It is a classic move to get the boss to blame someone, specifically, so that it gets the ball rolling to get people talking about who did what.
4) Would you say that Michael Roseman, MF Global’s former chief risk officer who resigned in March 2011, was correct in his assessment that the strategy the firm was undertaking was indeed too risky? Of course it was too risky, the company went BANKRUPT! However, Corzine needs to admit Roseman was right then we can dig into why MF Global sought to get rid of him.
5) Were you aware that the transfer of $200 million to JP Morgan in the final days of MF Global was suspected by JP Morgan bankers of having utilized MF client funds? Again, as in #3 above, the committee needed to get Corzine to throw other people under the bus to get some constructive dialogue, blame, started.
We all knew Corzine was not going to say much of anything that would incriminate him. In fact, in Corzine’s statement he insisted that the notes and papers back at his office could help him but he has not seen them since he left. So why not just get a few names out of him. It would have spiced up the hearing a bit more than the bore that it proved to be.
Statistics: Posted by DIGGER DAN — Fri Dec 09, 2011 5:38 pm
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