Former New Jersey Gov. Jon Corzine will pay a $5 million civil penalty for misuse of $1 billion in customers’ funds during the 2011 collapse of MF Global, which shook the futures market. Corzine, who was chief executive of the trading house, also agreed in a consent order in federal court to never again work for a futures brokerage or to register with the CFTC.
“In effect, that means he will not personally trade other people’s money in the futures industry, except for smaller trades under certain threshold limits. Mr. Corzine, at least in theory, could still operate a hedge fund that does futures trading, or he could trade for his own account. The settlement also does not prevent him from trading in other markets,” said the New York Times.
The CFTC, which announced the consent order with Corzine, said the former assistant treasurer of MF Global, Edith O’Brien, would pay a $500,000 civil penalty “for aiding and abetting MF Global’s violations.” The regulatory agency said, “Both Orders find that, during the last week of October 2011, in violation of U.S. commodity laws, MF Global unlawfully used nearly one billion dollars of customer segregated funds to support its own proprietary operations and the operations of its affiliates and to pay broker-dealer securities customers and pay FCM (futures commission merchant) customers for withdrawals of secured customer funds.” The funds were returned to customers eventually.