Former head of MF Global Jon Corzine may face civil charges for misuse of customer dollars during the last days of his brokerage firm's epic collapse, the New York Times reports.
The Commodity Futures Trading Commission (CFTC) will approve the the lawsuit against the former New Jersey senator and governor, according to the Times.
In a rare move against a Wall Street executive, the agency has informed Mr. Corzine’s lawyers that it aims to file the civil case without offering him the opportunity to settle, setting up a legal battle that could drag on for years.
Without directly linking Mr. Corzine to the disappearance of more than $1 billion in customer money, the trading commission will probably blame the chief executive for failing to prevent the breach at a lower rung of the firm, the law enforcement officials said. If found liable, he could face millions of dollars in fines and possibly a ban from trading commodities, jeopardizing his future on Wall Street.
The government's aggressive action is a departure from its previous policy of letting big banks off the hook with "symbolic fines" — but not admission of guilt.
Last week the SEC said it would push for more accountability and acknowledgment of wrongdoing when going after specific cases.
A case would darken the cloud over the legacy of Mr. Corzine, 66, who as a onetime Democratic governor and senator from New Jersey and a former chief of Goldman Sachs has long been a confidant of leaders in Washington and on Wall Street.
But it would also suggest that authorities have all but removed a greater threat: criminal charges. 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.
For Corzine personally, the case will depend, in part, on whether prosecutors are able to link him to the transfer of customer money to the firm's own accounts in those final days.
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