Email: MF Global CEO thought transfer was not customer money
Jon S. Corzine, the former chief executive of troubled commodities trading firm MF Global, directly ordered an overdrafted account be stabilized by a fund transfer that included at least some customer money. But according to an internal email, Corzine had been told that the funds belonged to the company -- not to customers.
With investigations into MF Global’s collapse ongoing, everyone from farmers to regulators to the press is continuing to look for answers. What happened in the days before MF Global declared bankruptcy, and just where did the $1.2 billion in missing customer money go?
The New York Times reviewed the internal email that seems to say Corzine thought the transfer was above board.
The e-mail, sent by an executive in MF Global’s Chicago office, showed that the company had transferred $175 million to replenish an overdrawn account at JPMorgan Chase in London. The transfer, the e-mail said, was a “House Wire,” meaning that it came from the firm’s own money. The e-mail, sent at 2:20 p.m. on Oct. 28 to Mr. Corzine and two of his assistants in New York, says the transfer came from a “nonseg” account, industry speak for a noncustomer account.
But the e-mail, a copy of which was reviewed by The New York Times, did not capture the full story behind the wire, which turned out to contain customer money. MF Global employees in Chicago had first transferred $200 million from a customer account to the firm’s house account, people briefed on the matter said. Once it was in the firm’s coffers, the people said, Chicago employees then promptly transferred $175 million of the money to the MF Global account at JPMorgan in London — the account that was overdrawn.
The $175 million transfer is just one of many account transfers in the firm’s chaotic final days that ultimately left farmers, traders and other clients out over a billion dollars. That missing client money has shaken many farmers’ faith in the markets.
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