Saturday, March 24, 2012

Corzine update: what will Shrum say now?

In November of last year, I discussed Bob Shrum's defense of Jon Corzine in a piece at The Week. One of the principal issues in the collapse of MF Global was missing customer funds, substantial monies that had disappeared. It was theorized that these monies were used by MF Global to cover its own losses and debts, incurred through risky bets made by Corzine on European markets.

Testifying before Congress in December, Corzine stated that he never authorized such a transfer of funds:
“I never gave any instruction to misuse customer funds, I never intended anyone at MF Global to misuse customer funds and I don’t believe that anything I said could reasonably have been interpreted as an instruction to misuse customer funds,” Corzine told lawmakers.
Shrum, for his part, sought to preemptively defend Corzine, prior to those hearings. He spoke of Corzine's integrity, calling him:
...One of the most principled and capable people I met in 40 years in politics.
High praise and a vigorous defense of a man who had ruined the lives of many, many people and destroyed the firm he headed. Shrum predicted that eventually Corzine would be fully vindicated and cleared of any wrong-doing. But new evidence suggests that is unlikely, to say the least:
Jon S. Corzine, MF Global Holding Ltd. (MFGLQ)’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund account to meet an overdraft in a brokerage account with JPMorgan Chase & Co. (JPM), according to a memo written by congressional investigators. 
Edith O’Brien, a treasurer for the firm, said in an e-mail quoted in the memo that the transfer was “Per JC’s direct instructions,” according to a copy of the memo obtained by Bloomberg News. The e-mail, dated Oct. 28, was sent three days before the company collapsed, the memo says. The memo does not indicate whether that phrase was the full text of the e-mail or an excerpt.
I wonder if Shrum will continue to stand by his man...

Cheers, all.

1 comment:

  1. I don't think he has ever even heard Tammy.