Continuing to prove the theory right that everything Jon Corzine touches turns to absolute garbage, the MF Global scandal is continuing to grow. Now the amount of client cash that was allegedly commingled and lost has nearly doubled to $1.2 billion.
Earlier this week investigators began to question the initial $600 million estimate given by the firm itself to account for missing investor capital. From that questioning came further digging and accounting by independent firms, and now Corzine finds himself in a hole twice a deep. The money cannot be found, and it is suspected that there are two possible reasons for its disappearance.
- MF Global was using the cash to meet trading partner’s demands for extra cash, or
- It was using the cash to cover losses on trades (which would be the worse of the two possibilities)
Either way, it is not good. Much of the money was being held in subsidiary companies overseas, all of which are being wound down under the bankruptcy laws of those nations, much like MF Global is here. What does that mean in a practical sense? Basically that investors are not going to get their money back any time soon, if ever.
Hopefully this will make anyone and everyone think twice before ever hiring (or heaven forbid, electing) Jon Corzine to run anything ever again. The more we learn about this situation, the more sense it seems to make the our former Governor and official punching bag at Save Jersey has lawyered up.