'Sad' Corzine quits bust MF Global with no pay-off
Nick Clark is the arts correspondent of The Independent. He joined the newspaper in June 2007, initially reporting on the stock markets. He has covered beats including the City, and technology, media and telecoms and made the switch to arts in December 2011. He has also contributed articles to the sports section.
Saturday 05 November 2011
Jon Corzine has resigned from bankrupt US brokerage MF Global, talking of his "great sadness" at the collapse of the company he had hoped to build into a "mini Goldman Sachs".
The company released a statement yesterday announcing the departure of Mr Corzine, below, its chief executive and chairman. The news was considered inevitable after the company filed for Chapter 11 bankruptcy protection earlier this week, following a series of disastrous bets on the European sovereign debt markets.
Mr Corzine said: "I feel great sadness for what has transpired at MF Global and the impact it has had on the firm's clients, employees and many others."
He will continue to assist the board "in their efforts to respond to regulatory inquiries and issues related to the disposition of the firm's assets".
Regulators and administrators are closing the company's trading positions and looking into whether MF improperly used clients' money to fund its bets on eurozone sovereign debt.
The company's statement said: "Mr Corzine has confirmed that he will not seek severance payments in connection with his resignation." He was entitled to a $9m payout.
Edward Goldberg, lead director of the board, and Bradley Abelow, the president and chief operating officer, will continue in their roles at the brokerage.
MF was spun out of hedge fund giant Man Group in 2007. The company's fall from grace was remarkably rapid. It made a $6.3bn (£3.9bn) bet that a resolution of the eurozone crisis would cause the value of sovereign bonds to soar. As losses widened, customers and trading partners fled and, within a week, the crisis of confidence had brought the company to its knees.
MF had assets of $41bn and debt of almost $40bn, making the bankruptcy the seventh largest in US corporate history. There is still no clarity over the future of its 2,900 employees, 725 of whom work in London.
Mr Corzine rose from a childhood on a small farm in Illinois to running one of the most powerful investment banks on Wall Street. He was appointed head of Goldman Sachs from 1994 and remained until 1999, when he was ousted in a boardroom coup by successor Hank Paulson. He subsequently moved into politics, and won the race to become senator for New Jersey. Six years later, he became governor of the Garden State, but was ultimately defeated by Chris Christie.
Mr Corzine joined MF Global as chief executive in March 2010. Yesterday he admitted defeat, as he saw plans to turn MF into a "mini-Goldman" crumble, friends say.
Attempts to salvage the company through a merger with US group Interactive Brokers collapsed early on Monday as accounting problems emerged.
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