Monday, October 31, 2011

Famed Member of the 1% and Obama Bundler Runs Brokerage Firm Into Bankruptcy

Looks like Jon Corzine has done for his firm what he did for the State of New Jersey.
Besieged broker MF Global is expected to file for bankruptcy today after a frantic effort over the weekend by CEO John Corzine to strike an out-of-bankruptcy appeared to come up came up short, The Post has learned.

The embattled broker dealer run by the former New Jersey governor is expected to sell some of the company’s assets in a complicated transaction to rival Interactive Brokers Group, a move that must receive the blessing of a bankruptcy judge, according to people familiar the situation.

It is expected that MF Global’s holding company will file for bankruptcy while other units, including one that clears fixed-income trades, will open its doors for business this morning, sources added. Early this morning, MF shares were halted in trading, with news pending.

A number of terms were still being hammered out early this morning and elements of the deal could still change.

The bankruptcy and planned sale to a rival would end one of the most harrowing weekends on Wall Street since Lehman Brothers on Sept. 15, 2008 imploded on worries that it was choking on toxic mortgage debt.

Three years later, Corzine — a former Goldman Sachs CEO — was pounding the phones this past weekend in an attempt to secure a white knight to purchase all or parts of MF Global after concerns about the broker-dealer’s exposures to some $6.3 billion in European sovereign debt decimated its shares in a wild week off trader for the firm that saw it lose three-quarters of its equity value.

Precisely how much Interactive Brokers Group would be shelling out to purchase parts of MF Global is unclear.

According to a Wall Street Journal report early this morning, it could be as much as $1 billion.

Whatever the number neither shareholders of IBG nor creditors are expected to be happy.

For Corzine, 64, a bankruptcy would be another knock on his reputation after choosing to dial up European risk at MF Global when other larger firms had grown weary.

Corzine is not expected to stay on at MF Global — an embarrassing outcome for a Wall Street titan who led Goldman Sachs before being ousted in 1999.
After that disaster he spent hundreds of millions to buy himself a Senate seat and then the governorship before being crushed by Chris Christie.

Remember, Barack Obama has been considering his for his next Treasury Secretary.
Corzine had occasionally been touted in the media as a possible Treasury Secretary in an Obama administration, perhaps replacing current incumbent Timothy Geithner, and following in the footsteps of his former Goldman rival Henry Paulson.
He's currently one of Obama's top fundraisers.

Update: Looks like Corzine will be getting a nice payday for destroying this company. Wall Street Occupiers were unavailable for comment.
DealBook reported that Corzine's severance package could allow him to walk away with around $12 million.

$12 million for joining a company and, in two years, flying it into a mountain.

Quick, someone go tell Occupy Wall Street.


Fenway_Nation said...

Umm....wasn't Barack Hussein Obama going to appoint Corzine to some czar, advisory or cabinet level poisiton?

Fenway_Nation said...

Umm....wasn't Barack Hussein Obama going to appoint Corzine to some czar, advisory or cabinet level poisiton?

dhimrich said...

Adios, MF!

Worried Stapler said...

Is anyone really surprised?

Grotjan said...

CNBC just reported Corzine is being rewarded with a $12 million severance for driving the firm into bankruptcy in about a year.  How in the world can the Board of Directors negotiate these insane deals after the 2008 meltdown?

The OWS crowd ought to love this one.

RamblingMother said...

why can't I get a job like that?  I would settle for a 6mil pay out and could ruin the company in 1/2 the time!

Belzar Zefal said...

I remember Tom Brokaw refering to Michael Huffington as the guy who "tried to buy a senate seat by spending 30 million dollars of his own money."

On the night John Corzine won his senate seat in New Jersey by spending 60 million dollars of his own money Tom Brokaw said of his victory that there was "some controversy over how much money he spent."

And the "controversey" wasn't over Corzine spending his own money but Republicans pointing out the democrats and their shills in the media double standard by their complete lack of outrage when they were so incensed by Huffington's senate bid using his own money.

A Republican spending his own money running in a state with three times the population and 20 times the geographic size translates into trying to buy a senate seat circa 1998(?). Democrat spends twice as much two years later translates into some controversey.

At the time of Huffington's run Republicans pointed out that John Rockefeller had used his own money to run in West Virginia and spent more money per vote received than Huffington for his re-election 2 years earlier.

Selective outrage: It's a dmeocrat and MSM feature, not a bug.