Former New Jersey Gov. Jon Corzine’s resignation Friday from the securities firm he led capped a week of high drama and swift failure.
MF Global collapsed into bankruptcy Monday, and Corzine has since hired a criminal defense attorney amid an FBI investigation into the disappearance of hundreds of millions of dollars in client money.
MF Global’s implosion, which came after Corzine made a big, risky bet on European debt, revived memories of the 2008 banking crisis and the ruin of the much bigger Lehman.
As Corzine, 64, stepped down as chairman and CEO, he said he felt “great sadness about what has transpired at MF Global.” Corzine, who ran the investment firm Goldman Sachs years before joining MF Global, said his resignation was voluntary and called it “a difficult decision.”
Regulators said more than $600 million in client money is still missing. They said MF Global apparently moved the money out of client accounts within days as the company’s cash dried up.
The FBI is examining whether the firm’s actions amounted to a crime, two people familiar with the situation told The Associated Press this week. They spoke on condition of anonymity because they were not authorized to discuss the matter publicly. The New York Post reported that U.S. Attorney Preet Bharara in New York City is also investigating.
Corzine hired prominent defense attorney Andrew Levander of New York, according to a person familiar with the situation.
Securities firms such as MF Global are supposed to keep their own money separate from their clients’. That way, clients can retrieve their assets easily if the company fails.
MF Global has maintained that the missing customer money is being held up by trading partners that froze its accounts as it teetered last week.
The Corzine era at MF Global began in March last year.
Seeking to raise MF Global’s profile and expand its business, he sought help from former Goldman Sachs colleagues in New York and Washington.