In his prepared testimony today, former MF Global chief executive Jon Corzine claims he does not know what happened to the customer funds that have gone missing.
We’re not talking about a trivial amount of money. The latest tally amounts to $1.2 billion. How could that kind of money vanish without Corzine knowing anything about it?
Here’s what Corzine says in his prepared testimony:
As the chief executive officer of MF Global, I ultimately had overall responsibility for the firm. I did not, however, generally involve myself in the mechanics of the clearing and settlement of trades, or in the movement of cash and collateral. Nor was I an expert on the complicated rules and regulations governing the various different operating businesses that comprised MF Global. I had little expertise or experience in those operational aspects of the business.
As chief executive of MF Global, Corzine had to certify the financial statements of the company under the Sarbanes-Oxley rules put in place almost decade ago. The certification requirement is supposed to make such denials impossible.
If Corzine can get away with pleading ignorance, then the entire rationale for Sarbox goes out the window.
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