Good news: Jon Corzine’s missing $1.6 billion has been located [humanevents]
April 29, 2012 Leave a comment
Somehow, the chief investment guru of the Obama Administration, former New Jersey governor, Democrat senator, and top Obama campaign contributor Jon Corzine – managed to lose $1.6 billion of his clients’ money, in the fiery crash of his MF Global corporation. During the extensive congressional investigations, the term “vaporized” was floated.
Apparently “vaporization” doesn’t mean jail time when you make a billion dollars disappear, which is probably for the best, since it would be tough on C-SPAN to cover Congress if they were all in prison.
Now CNN Money brings us the happy news that congressional investigators have tracked down the missing client funds. Unfortunately, the firm’s clients won’t be getting a big chunk of it back any time soon. Six months after MF Global collapsed, customers are said to have recovered about 70 percent of what they’re owed, and some of them might get to 80 percent following a recent bankruptcy court action. Strangely enough, there still isn’t any sign of orange jumpsuits for the persons responsible.
Investigators probing the collapse of bankrupt brokerage MF Global said Tuesday that they have located the $1.6 billion in customer money that had gone missing from the firm.
But just how much of those funds can be returned to the firm’s clients, and who will be held responsible for their misappropriation, remains to be seen.
James Giddens, the trustee overseeing the liquidation of MF Global Inc, told the Senate Banking Committee on Tuesday that his team’s analysis of how the money went missing “is substantially concluded.”
“We can trace where the cash and securities in the firm went, and that we’ve done,” Giddens said.
So what happened to the loot?
Roughly $700 million of the missing money is now locked up with MF Global’s subsidiary in the United Kingdom, where Giddens and his team are engaged in litigation to have it returned to U.S. customers. Giddens said he is “reasonably confident” that these funds will be recovered, though he added that it will be a lengthy process with no guarantee of success.
Another $220 million was transferred inadvertently from the accounts of securities customers to those of commodities customers. That money is now in limbo amid a dispute over which customers it belongs to, said Kent Jarrell, a spokesman for Giddens.
The final $680 million or so was transferred to other financial institutions with which MF Global did business, including a substantial portion that went to JPMorgan.
Giddens said his team has “a solid basis for seeking the recovery of some of the funds that were transferred to JPMorgan,” and is engaged in ongoing talks on the issue. JPMorgan did not immediately return a request for comment.
I suppose “limbo” is an improvement over “vaporization.” Maybe they should allow MF Global clients to visit their money periodically in limbo, and gaze longingly at it, while they hold hands and dream of happier times.