Where's the Money, Jon?

By Daly, Michael | Newsweek, December 12, 2011 | Go to article overview

Where's the Money, Jon?


Daly, Michael, Newsweek


Byline: Michael Daly

With the collapse of MF Global, Jon Corzine stands in the middle of the missing-billion-dollar crossfire. How the finance golden boy went from star governor to news-headline disgrace.

On other mornings, the leather upholstered chair at Esquires barbershop could have been a throne, from which Jon Corzine would rise to stride supreme up the street where he had made his name and his fortune. But on this gray, drizzly dawn just before Thanksgiving, the once mighty 64-year-old emerged from the shop at 14 Wall Street looking sunken and defeated. He moved up the block with a skittish quickness, his blue blazer hanging almost scarecrow-loose on his shoulders, as he nervously raised and lowered a coffee cup to his face, seemingly not so much to take sips as to conceal his face--lest somebody recognize him and maybe ask the big question:

"Where's the money?"

The money being up to $1.2 billion in customer funds that had vanished after the implosion of the investment firm he ran, MF Global. The immediate cause of the eighth-largest bankruptcy in American history was a $6.3 billion bet on European debt that Corzine had declared was a sure thing. He seems to have been blinded less by greed than by need, a need to elevate little-known MF Global into the league of Goldman Sachs, where this son of an Illinois tenant farmer had risen to become CEO, only to be deposed more than a decade ago.

Apart from a press release in which he announced his resignation as MF Global's CEO and expressed "a great sadness" for "what has transpired," Corzine has maintained a shamed and, in the view of many, shameful silence, so successfully avoiding the press and angry investors that CNBC jokingly put his face on the side of a milk carton.

That silence may end as early as this week with a bipartisan tar-and-feathering before Congress. The House Agriculture Committee has voted in a rare unanimous moment to subpoena Corzine to appear on Thursday, and he will also likely be called by a committee in the Senate, where he himself served before resigning to become the governor of New Jersey. Corzine in public office was the most progressive of politicians and often stuck to his principles at whatever the cost. But at MF Global, that same willful confidence and indifference to public opinion combined with an outsize sense of himself to create disaster. What made Corzine so admirable in the Capitol and the statehouse could conceivably land him in the big house with the likes of Bernie Madoff.

Corzine is either the worst of the good guys or the best of the bad guys. He does not seem to be a thief. The question is whether he allowed hundreds of millions in customer funds to be lost in a last-ditch effort to stave off MF Global's collapse. One senior executive of the firm insists that nobody was more stunned by the money's disappearance than Corzine himself.

"I can't believe the fuck-up we just discovered," the executive heard Corzine say in the hours after the collapse.

This same MF Global executive suggests that what is largely missing from press accounts of the firm's demise is the condition MF Global was in when Corzine first became CEO last year. The firm has been described as a "bastard stepchild," spun off by its parent the Man Group after it acquired the remnants of Refco, which had collapsed after its CEO stole hundreds of millions of dollars (Refco CEO Phillip Bennett pleaded guilty in 2008 to 20 counts of securities fraud and is serving a 16-year term). The new company had then been rocked when one of its traders lost $140 million in unauthorized wheat deals.

When Corzine arrived, MF Global was a losing proposition in dire need of new revenue streams and, according to one executive, leveraged an astonishing 50-to-1. The executive, who requested anonymity, says the rating agencies warned Corzine at the outset that they would downgrade the firm's credit if he did not swiftly increase profitability. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Where's the Money, Jon?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.