The SCOTUS ruling isn’t the only legal news gaining national attention today. This morning, the New York Times broke the highly anticipated story that Jon Corzine will finally get his day in court. Almost two years after the initial investigation into MF Global misappropriating $1 Billion of customers’ money – and a whole lot of yelling by our friend and customer advocate James Koutoulas , the CTFC is announcing its plans to file a civil lawsuit against the former MF Global CEO.
Here’s the juicy part: the CTFC is planning of filing the civil suit without an opportunity to settle.
Even though a MF Global trustee alleges the collapse of the firm was entirely Corzine’s fault, he might not face criminal charges. The New York Times explains why.
“After nearly two years of stitching together evidence, criminal investigators have concluded that porous risk controls at the firm, rather than fraud, allowed the customer money to disappear, according to the law enforcement officials with knowledge of the case.”
Even though there is evidence to believe that Corzine made a direct choice to use the customer money to make up for loses, Mr. Corzine’s spokesperson says Corzine was unaware that customer funds were used.
“During the difficult final week, Mr. Corzine was never informed, nor was he ever given reason to believe, that customer funds were at risk or were being used improperly. Justice would not be served if Mr. Corzine were to be blamed for alleged mistakes that were made without his knowledge.”
As for regulating Wall Street, this would be a new frontier for government regulators, as no employees from the Leman Brothers 2008 collapse faced any civil or criminal charges. However, we are stilling waiting to hear if any other executives from MF Global will face any charges.
If found liable, Corzine faces millions in fines, and a ban from trading commodities. There’s no word yet on how many charges he will be facing, so this court battle could last for decades. But with Corzine’s lawsuit coming weeks after the CFTC declared it’s suing the U.S. Bank over the PFG Fraud, there definitely seems to be a shift in the attitude of the commodities market regulator.
And for many in the industry – the feeling is one of ‘about time’. You see, it is hard to restore confidence in the system if nobody is held accountable. If it looks and feels like business as usual – real worries about the next Corzine or next US Bank – slosh around in people’s heads. If real people are fighting day in and day out for customer rights and fighting to hold those who infringe upon them accountable – a confidence in those people and the industry they are building/protecting starts to re-emerge.