E-Mail Clears Jon Corzine, Sort Of

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By William D. Cohan

So, at first blush it looked like Jon Corzine, the former chief executive officer of MF Global, had authorized the transfer of $175 million from MF's customer accounts to JPMorgan Chase in the last hours  before the company's collapse. Now, it seems, there is more ambiguity about whether Corzine knew the money was customer funds or a "house wire," which would mean it came from the firm's own pocket.

The confusion results from a document written by congressional staffers, released Friday, in anticipation of a hearing this week before the House Financial Services Committee. The memo mentioned a cryptic but seemingly damning e-mail from Edna O'Brien, MF's treasurer, suggesting that Corzine had authorized the use of the customer money. If true, this would be counter to Corzine's previous congressional testimony and possibly criminal. So, too, would be the authorization to use customer funds in this way. But now we learn that the full e-mail, at least according to the New York Times, suggests that Corzine thought that only MF's funds were used to pay JPMorgan.

On the one hand, why congressional staffers would highlight -- and then leak -- only the most damning portion of the e-mail without releasing the whole thing is a legitimate question. On the other, the whole episode points to the fact that Corzine knows much more about those final days of MF than he has been willing to say so far. Time to get him back before Congress -- or the Justice Department -- and get the whole story.

(William D. Cohan is a Bloomberg View columnist and the author of "Money and Power: How Goldman Sachs Came to Rule the World." Read his previous columns on Corzine's alpha-male problem, Corzine's congressional testimony, Corzine's transformation into a rogue trader, MF Global's Washington influence, and short-term funding in the wake of MF Global's collapse.)


-0- Mar/26/2012 17:05 GMT