“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Friday, March 23, 2012

Corzine lied to Congress. If Traficant’s driveway cost him eight years, how many years should Corzine get?


Dooming MF Global Email May Have Just Done Corzine In


The mystery around the missing MF Global money may not be such a mystery after all.

Jon Corzine, former CEO of failed MF Global.

MF Global CEO, Jon Corzine, apparently gave direct instructions to move $200 million from a customer account so that his firm could cover an overdraft in a brokerage account held at JPMorgan Chase, Bloomberg News reports.

The order came from Corzine just days before MF GLobal went under, according to an email sent by Edith O’Brien, a treasurer for the firm which was obtained by Bloomberg. The email is part of a memo drafted by congressional investigators looking into the firm’s collapse.

From Bloomberg:

Barry Zubrow, JPMorgan’s chief risk officer, called Corzine to seek assurances that the funds belonged to MF Global and not customers. JPMorgan drafted a letter to be signed by O’Brien to ensure that MF Global was complying with rules requiring customers’ collateral to be segregated. The letter was never returned to JPMorgan, the memo said.

The money transferred came from a segregated customer account, according to congressional investigators. Segregated accounts can include customer money and excess company funds.

Corzine testified that he never intended a misuse of customer funds at MF Global, and that he doesn’t know where client funds went.

The e-mails could be damning for MF Global, particularly its CEO Corzine. Two hundred million is merely a drop in the bucket compared to the total $1.6 billion of customer funds that have yet to be recovered, but if Corzine was truly calling the shots to move client money around to cover losses elsewhere then that spells big trouble.

The problem is it wasn’t that long ago when Corzine told Congress he had no idea where the missing money was located. In early December, the former Senator and Democratic Governor of New Jersey testified before the House Committee on Agriculture saying, “I simply do not know where the money is or why the accounts haven’t been reconciled.”

He also added that he was no expert on the rules and regulations, and operational difficulties, regarding the segregation of accounts and the specific transactions the occurred as his company was about to fail.

Well, the Volcker Rule will aim to change that. It aims to bans firms from trading with their own capital for fear of customer assets getting caught up in losses. The latest in the MF Global mess will likely breathe some new life into the rule which some are fighting to delay calling it to complex.


  1. Not to be a stickler for legal niceties, but this email is probably inadmissable hearsay evidence for Corzine’s personal involvement. Of course it is difficult to imagine a junior officer authorizing the looting of customer funds on her own impulse, but what sort of (German?) officer would do such a thing even on the boss’s say so? Here’s how it might have happened:

    Edith: Mr. C, JPM is demanding another $200 million and we haven’t got it.

    C: Well, ah, what’s your name, Edith? Take that $200 million of customer money and move it over to JPM. That ought to hold them for a day or two, right?

    Edith: Gee, Mr. C, I don’t think that would be legal.

    C: Legal, shmeegal, Edee, just move the &*%*$ money. Besides, my lawyers tell me it is legal in London and for all you or I know that money was in London within the past 24 hours.

    Edith: Well, OK, you’re the boss, but they will want to know you have okayed this.

    C: Tell them anything they want to know but don’t bother me with this stuff again.

  2. Corzine issued a statement that his employees are liars, JP Morgan are a bunch of liars, he was out eating a mini-donut at Starbucks, had no idea transactions were taking place and if he did understand it he was not paying attention and would never have approved it regardless of what happened.

  3. Maybe his speRM COUNT WAS TOO LOW.

  4. .

    In today's D.C., it wouldn't surprise me to see him walk with a slap on the wrist.

    It took four years from Enron for Hank Paulson as Bush's Treasury Secretary with help from the SEC to gut provisions of Sarbanes-Oxley (a weak regulation designed to make investors feel more comfortable after Enron).

    Dodd-Frank is just as toothless as Sarbox; yet the, GOP has been complaining about it and trying to gut it since day one.

    Military/Industrial Complex? Heck, what about the Government/Wall Street Complex?


  5. .

    On the other hand, he could get the book thrown at him

    Congress could care less about corruption but they sure hate to be lied to.

    Ask Roger Clemons.


  6. We need a DAle CaRNeGIE gRAD to figure this oUt

  7. Poor BOb, he HAS YEt to find his WAY out of Hindsight. Insight escapes him.

  8. Hoodies joined by OWS crowd.

    I'm not making light, or dark, of any of this, but our country simply can't think any longer.


    Corzine should get twice of whatever Obama should get.

  9. .

    Excuse me, Bob.

    As far as I know, it's the State of Hawaii that says when and where Obama was officially born. Has anyone there said any of the info on the BC is incorrect?

    Get back to me when they do.

    After that, you can jump on that story about Bush not really being elected president in 2000.

    Not only could we do away with Obamacare but maybe we could forget about that whole Iraq war fiasco. You know, kind of write it off like it didn't happen.


  10. You are excused, Quirk, but you must wash your hands before you return to the table as my parents taught their children to do.


    I admit I have been trying to 'pull your chain' a bit here Quirk, as it is a fun thing to do watching how you react.

    I admit I was also trying to lure Deuce into the discussion a bit as I recall within perhaps an hour of the 'BC' being released he had posted here listing reasons why it was an obvious fraud and forgery.

    Please understand if you can that it is my "official position" - official positions being very important here - that our fraudulent President could have been born in the Rose Garden and it wouldn't make any difference, he would still be ineligible to be President as he does not have an American citizen father. He is thus in violation of Article II Section I of our Constitution, as you know. If he has lied about where he was born, well!, that just adds to the excitement.

    Quirk, I have been invited to the Hindu/India Fest at the U of I International Ballroom for dinner, drinks, dancing and philosophical/religious discussions by one of my tenants. I must arise early tomorrow and begin to wash my body, do my feet, put on my sandals and loin cloth, paint the bindi, and dishevel the hair to get that wild forest look, and clean my begging bowl. I was wondering if there might be a question or two you would wish me to ask of her and her companions?

    She is really nice, in the Education Departments of one of the schools here and is from Mumbai where all the shooting took place. She has a boyfriend who has a good job here in America and they don't want go go back, except to visit. She doesn't drive, but walks everywhere, even in the snow. She said even thinking about driving in Mumbai gives her anxiety attacks. She was so impressed with the apartment here, as it has wonderful lush carpets, and she was used to concrete floors back in Mumbai.

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