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Jon Corzine resigns as CEO of MF Global

The decision by the former New Jersey governor, coming five days after the trading firm declared bankruptcy, will make it difficult for him to return to a job in finance or politics.

November 05, 2011|By Nathaniel Popper, Los Angeles Times
  • Jon Corzine has taken much of the blame for the embattled brokerage firms demise.
Jon Corzine has taken much of the blame for the embattled brokerage firms… (Andrew Harrer/Pool, EPA )

Jon Corzine resigned from his position atop MF Global just five days after the trading firm declared bankruptcy.

Corzine, the former governor of New Jersey and chief executive of Goldman Sachs Group, announced his resignation Friday as numerous regulators and prosecutors probed the firm's swift downfall.

He has taken much of the blame for MF Global's demise, and the controversy surrounding his resignation as chairman and chief executive will make it hard for him to return to the realms of finance and politics where he made his name.

"He's certainly limping away from Wall Street with his tail between his legs," said Michael Driscoll, a former Wall Street trader who teaches at Adelphi University. "I'm fairly confident that there aren't going to be any more runs for political office — or any more appointments to running financial institutions."

Corzine, in the statement announcing his decision, said, "I feel great sadness for what has transpired at MF Global and the impact it has had on the firm's clients, employees and many others."

The company said Corzine would not receive any severance payments, despite earlier reports that he could receive as much as $12 million.

Corzine still has a position with the private equity firm J.C. Flowers, but sources at the firm told Reuters that Corzine would soon give up that position. The firm, run by former Goldman executive Christopher Flowers, had invested $300 million in MF Global in 2008.

A long list of regulators and prosecutors are probing how MF Global handled customer money and presented its investments to shareholders, according to a variety of reports.

Corzine is blamed by critics for pushing the company to make big bets on European sovereign debt with the firm's money. When the bets were disclosed they drove away trading partners and shareholders.

This is not Corzine's first brush with controversy. Early in his tenure as chairman of Goldman Sachs, the bank posted big losses on risky bets that Corzine had backed. He also made a controversial push to take the Wall Street firm public. Although that eventually happened, he soon parted ways with Goldman.

Corzine made a rapid ascent through the political ranks, first winning a seat in the Senate and then going on to become governor of New Jersey.

Even after losing a reelection bid, Corzine was mentioned as a potential replacement for Treasury Secretary Tim Geithner. Instead, Corzine took over MF Global, known as a small, customer-focused brokerage firm.

Corzine's move to grow the firm was described by commentators as an effort at redemption. Instead, it is seen as an example of how quickly a Wall Street firm, and a leader, can fall from grace.

"In a very short amount of time, it all went horribly, horribly awry," Driscoll said.

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