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Jon Corzine: Taken to Task for Excessive Chutzpah

·Editor in Chief

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Russell Wasendorf of Peregrine Financial was indicted last week on 31 counts of lying to regulators and robbing his firm's clients of about $200 million.

Wasendorf, who plead "not guilty" to the charges, faces up to 155 years in jail.

Meanwhile, The New York Times reports, NO charges are likely against Jon Corzine or other senior execs of MF Global -- where $1.6 billion of customer funds remain missing nearly a year after the futures brokers filed for bankruptcy.

Which brings us back to a segment we call Taken to Task.

Look, I get that proving a crime is tough, but when the guy accused of stealing $200 million goes to jail and the guy who can't account for $1.6 billion is likely to get off scott free, something is very wrong.

In case you didn't know, Jon Corzine is a former CEO of Goldman Sachs, a former senator and governor of New Jersey and a former major fundraiser for President Obama. It's really hard to be more "high-powered" and "connected" in American society.

To be sure, Wasendorf essentially confessed to how he stole customer funds in what was supposed to have been a suicide note, while Corzine has denied any wrongdoing and MF Global's bookkeeper, Edith O'Brien, has plead the fifth.

Still, I'd like to take the Obama administration, the Department of Justice and the Commodities Futures Trading Commission to Task for not finding the missing money at MF Global nor turning up the heat on the head of the ill-fated firm.

I mean, is it really possible to be unable to account for $1.6 BILLION of customer funds without breaking rules that compel brokerage firms to keep customer funds segregated (and safe)?

The lesson here: If you're going to blow up the firm, go BIG!

As if this story weren't already grotesque enough, last week brought reports that Corzine is considering opening a hedge fund. Of course! That makes perfect sense — the guy who blew up his firm by making a big LEVERAGED bet on European debt last year is looking to start a new hedge fund. When he was governor, Corzine suffered terrible injuries during a car accident because he wasn't wearing a seat belt; apparently, he didn't get that being leveraged nearly 40-to-1 is the financial equivalent of driving 90 mph without a seat belt.

Whether the rumors are true or not, the reality is Corzine probably wouldn't have much trouble raising a billion or two. After all, he was known as a great trader at Goldman Sachs and folks on Wall Street probably admire the way he seems to be evading any responsibility for what happened at MF Global. At least one investor, Anthony Scaramucci, says he'd consider investing with Corzine.

Corzine "made terrible mistakes but he's got good character," Scaramucci said on CNBC. "He didn't do anything criminal"

At least, not that we know of — or investigators can prove — and yes, Corzine is innocent until proven guilty.

Still, the fact a Corzine-run hedge fund is something to seriously consider is another indictment of the twisted values of the financial community, where blowing up on a grand scale is something to be celebrated. He's a risk taker!

(On Wall Street, nothing succeeds like failure as the story of folks such as John Meriwether can attest. After leaving Salomon Brothers in the early 1990s following a Treasury securities trading scandal, Meriwether founded Long Term Capital Management, which collapsed in spectacular fashion in 1998, prompting a Fed-endorsed bailout of LTCM and some of its biggest Wall Street counterparties. That didn't stop him from raising millions to fund JMW Partners, a hedge fund that grew to $3 billion in assets in 2007, before tumbling 44% during the financial crisis and closing shop in 2009.)

John Corzine, for betraying the trust of both the investing public generally and customers of MF Global, specifically, and for sheer chutzpah, you've been Taken to Task.

Aaron Task is the host of The Daily Ticker and Editor-in-Chief of Yahoo! Finance. You can follow him on Twitter at @aarontask or email him at altask@yahoo.com

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