Published August 02, 2013
WASHINGTON – A group of Republican lawmakers called on Friday for a criminal investigation of Jon Corzine, the head of failed futures broker MF Global, saying he may have committed perjury when speaking before Congress in 2011.
Corzine, a Democrat who previously served as New Jersey's governor and U.S. senator, headed MF Global when it collapsed in October 2011 in one of the 10 biggest U.S. bankruptcies.
Customers were left reeling when it was discovered that about $1.6 billion was missing from their accounts. That money turned out to have been used as stop gaps, which is illegal and caused public outrage.
Corzine maintained during several Congressional hearings that he did not know what happened to the money. But recorded conversations unearthed by MF Global's regulator showed otherwise, the members of the House of Representatives said.
"There is no way Mr. Corzine could have been "stunned" to learn of hundreds of millions of dollars of missing client funds," they said in the letter to U.S. Attorney General Eric Holder, which was dated August 1.
Corzine used that expression when he appeared before the Senate Agriculture Committee on December 13, 2011, the letter said.
A civil complaint from the Commodity Futures Trading Commission in June containing recorded conversations showed that Corzine knew more than he said, the letter added.
The 18 signatories of the letter, all Republicans, urged Holder to reopen a criminal probe into Corzine's actions, and to investigate whether he committed perjury by misrepresenting what he knew about the missing money.
"Mr. Corzine stands by all of his congressional testimony," said a spokesman for Corzine, who is also a former Goldman Sachs co-chief executive.
Corzine wanted to aggressively build out MF Global into an investment bank, but it collapsed when bets on European government debt went sour and markets lost trust.
He often struck a defiant tone when testifying before lawmakers about the debacle, blaming back-office dealings and denying knowledge of any instructions to misuse customer funds.
But the CFTC's complaint claims Corzine was aware of the company's low cash balance and continued to pay large obligations anyway.
(Reporting by Douwe Miedema. Editing by Andre Grenon)