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The Real Victims of Jon Corzine & MF Global’s Bankruptcy


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If you're obsessed with headlines from Europe, fixated the Federal Reserve's final policy meeting of 2011, and generally ready to tune out for the rest of the year, that's just the way Jon Corzine wants it.

The embattled former Senator, Governor, head of Goldman Sachs (GS), and CEO of MF Global will testify again today, this time in front of his pals and former peers in the U.S. Senate. Presumably Corzine will be sternly grilled regarding how MF Global came lose $1.2 billion in client funds. Cynics and those who saw Corzine's first Congressional testimony last week would logically expect the disgraced ex-Senator to dole out blame to others while congratulating himself for not taking the Fifth.

The gist of Corzine's defense is that he simply couldn't understand where the money went. It's been a performance somewhere between a drug-addled teen trying to track down his keys and Michael Corleone's testimony in The Godfather II. Corzine totally doesn't know where the money is and if anyone working for MF Global did anything untoward the titular leader of the firm at the time had no way of knowing about it.

An eviscerating article in Sunday's NY Times called into question just how hands-off Mr. Corzine was. Citing inside sources, the Times says "Mr. Corzine compulsively traded for the firm on his Blackberry during meetings, sometimes dashing out to check on the markets."

A presumption of innocence aside, Corzine's having been an actively trading CEO yet claiming ignorance as to the clearing and processing activities of his firm falls somewhere between implausible and the lie of a financial sociopath.

Former a market strategist for MF Global Rich Ilczyszyn (rhymes with "magician") has firsthand experience with the firm and the impact its bankruptcy has had. Now the founder of iitrader.com, Ilczyszyn doesn't claim to know how Mr. Corzine's legal battle is going to turnout, but he's willing to hazard a guess as to the reaction of his former co-workers regarding Corzine's claim regarding the missing $1.2billion.

"I think I can speak for a lot of clients from MF and investors that used the firm, 'you've got to be kidding me!'" he says.

Ilczyszyn clearly has moved on personally and professionally from MF, as have many of those employed by the firm on the trading floors. It's the other 3,000 or so former MF employees for whom Ilczyszyn reserves his concern.

There are jobs "in this industry if you're specifically in futures or commodities, but outside my heart goes out to all the back-office support," he says. "All the people who helped the organization run on a daily basis; there's a lot of folks I'm in contract with who are still seeking employment."

Ilczyszyn is sincere in his concern, which means he outranks Corzine as a man if not in terms of their respective titles at MF Global.

The back office people are the real victims of MF Global's collapse. They're also the group who Corzine is putting on the hook for what is either his ineptitude or his malfeasance. When Corzine claims he never "intended" to mix client and firm funds or notes that he can't retrace the numbers because he doesn't have the paperwork, he's blaming the everyday people working at a firm he lead into full-on liquidation.

Corzine's rounds of testimony are the final insult on his way out the door from business leader to full-time defendant. The show starts at 10am; get ready to lose the remote and pass the popcorn.