MF Global: The Big Fix Was In; How Corzine Threw a Mid-Level Operations Assistant Under the Bus

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He Said, She Said: The CEO, Senator and Governor’s Word Over a Mid-level Operations Assistant.

In the December 2011 testimony to Congress, when Jon Corzine was asked exactly who assured him that transfers were not from any customer funds, he answered:

John Corzine: “explicit statements that we were using proper funds, both orally and in writing, to the best of my knowledge…The woman that I spoke to was a Ms. Edith O’Brien.”

With that and within seconds, an obscure back office employee with the title of Assistant Treasurer, came to the center of what is emerging to be not only one of the largest bankruptcies in U.S. History, but one of the most momentous, as it reaches beyond the financial district of New York into the heartland and creep into the corners of regulatory offices and our judicial system.  The growing web around the bankruptcy now brings uncertainty to the very foundations of regulation and judicial oversight in the United States.

And with those words, fiduciary culpability for taking client funds was squarely placed onto 46 year-old Edith O’Brien.

Let’s look at how the fix for a crime, which even today is still characterized by by federal authorities as ” MF Global’s actions amount to sloppy record-keeping, rather than criminal fraud” as reported  in a New York Times report on MFGlobal’s use of mailed checks instead of wires in its last days.

Lawyered up by the best and the brightest, and thoroughly prepared for the hearings, Jon Corzine was obviously ready for the question above and when he dropped Edith’s name it was carefully placed into the context of his prior written and verbal testimony.

Naming Mrs. O’Brien as the one who assured him all transfers were proper completed the circle of logic fist planted in Senator Corzine’s written statement given on December 8th to the Agriculture Committee.

Furthermore, even when I was at MF Global, my involvement in the firm’s clearing, settlement and payment mechanisms, and accounting was limited. 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 have not had access to the information that I would need to understand what happened. It is extremely difficult for me to reconstruct the events that occurred during the chaotic days and the last hours leading up to the bankruptcy filing.

(As an aside we ask if it was so “chaotic,” why wasn’t Ms. Serwinski, Chief Treasurer for North America, not called back in from her vacation?)

A revisit to the key question at the very first hearing:

In answer to Senator Stabenow’s question if he knew where the money is:

I simply do not know where the money is, or why the accounts have not been reconciled to date. I do not know which accounts are unreconciled or whether the unreconciled accounts were or were not subject to the segregation rules. Moreover, there were an extraordinary number of transactions during MF Global’s last few days

(Another aside, this is strangely the same language and characterization of the last days of MF Global as described by the Trustee Giddens. )

In written statements and throughout the hearings Senator Corzine repeated various versions of this answer:

“I never gave any instruction to misuse customer funds, I never intended anyone at MF Global to misuse customer funds and I don’t believe that anything I said could reasonably have been interpreted as an instruction to misuse customer funds,”

Translation:  “Anyone who misunderstood me was a total ignoramus.”

When asked about internal controls and adherence to compliance, and prior to naming any employees of MF Global, Corzine stated MF Global had professionals responsible for money transfers and compliance and said more than once, “I relied on them.”  Translation:  “I trusted them, but if this happened those rats on the ship were lying to me.”

After this lead up, he then named Edith O’Brien as responsible for all transactions from the FCM in those last days and hours of “chaos” and the one who “gave assurances” that all transfers were properly done. His fix was in.

And all of a sudden a woman with the appearance, demeanor and background of the Kilted Catholic schoolgirl was tied to the rails to take the fall for the entire C level of MF Global Holdings and Senator Corzine.  There was now no escape.

Shortly after naming Mrs. O’Brien the hearing was then over.  And former the Senator  strode out of the room with the jacket of his navy blue suit wide open and his head held high to meet his wife of just over a year, Sharon Elghanayan.

In December 2011 we witnessed a man who had earned one half of a billion dollars while Chairman of Goldman Sachs, was Governor and Senator to the most densely populated state in the country.  A man who now had no knowledge of the facts – but ultimate responsibility for – the looting of hundreds of millions of dollars private property under his aegis.  This was money he claimed no understanding of handling or whereabouts even after – as we now know — he was personally contacted by JP Morgan to meet liquidity needs; and requested to make sure those deficits were immediately resolved.

Yet in December as Corzine strode out of the cavernous hall before second panel of witnesses entered his pace increased. His wife made a jog to catch up with him in the Emancipation Hall of the Capital Building. (Named in honor of the slaves who started construction on the Nation’s capital in 1973.)  Followed by a small entourage, he then walked out of the Capitol building with the appearance and demeanor of a protected man.  Over the next months there was and will be more hearings and revelations to come.

Fast forward to March 2012. He Said….She Said as we Enter the Third  Congressional Finance Sub Committee Hearing.

On March 28th,  2012 the Congressional Finance Committee held its third hearing on the MF Global investigation.  Prior to this, Congress leaked to the press that Edith O’Brien, thrown into the center of the MF Global disgrace, wrote an e-mail that the transfer was “Per JC’s direct instructions.” This email, as reported by Bloomberg news, was dated Oct. 28 — three days before the bankruptcy filing.  Even though there were earlier reports on this, the media suddenly went into a frenzy with headlines such as "Former MF Global Exec: Corzine Ordered $200M Transfer or Did Jon Corzine Lie to Congress about Missing MF Global Funds?

This was “news noise” as the fix was long in and there were earlier reports of email communication from JC to cover liquidity needs. And as Corzine testified with a tone of exasperation earlier “… I don’t believe that anything I said could reasonably have been interpreted as an instruction to misuse customer funds.”  So if Mrs. O’Brien or anyone else misused customer funds they were too ignorant to understand his orders, and after all he had “relied upon” upon and trusted them.

In fact, very shortly after the first testimony where Edith O’Brien was pinned, word was, as Congressman Neugebauer stated in the recent hearing,  that she “disagreed” with Mr. Corzine’s claim in December that she provided assurance that a $200 million transfer to J.P. Morgan Chase & Co. three days before the bankruptcy-protection filing.  (In fact, we now know that O’Brien refused to put her signature to such a statement of assurance after MF Global legal council, Lauri Ferber, asked her to sign it.)

For now, though, Edith O’Brien, who is still a “person of interest” to the FBI remains silent. She apparently knows more than anyone, and may be willing to talk if she is assured immunity.  O’Brien may need it.  After all, over a claimed billion dollars of customer money was improperly moved out of segregation when she was covering for the North American Treasurer during these fateful days.

As Edith O’Brien was duly dismissed from the third hearing after pleading her Fifth Amendment rights, her attorney stood up behind her and whispered,  “let’s go.” They walked out of the hearing room as cameras clicked in rapid fire.

O’Brien’s work in the industry is not glamorous, but is the foundation of the daily functioning and survival of all Brokers.  Command of detail and the requirements for accuracy are so great, few thrive in that environment.  Those who do know where everything is at all times. They must. And that is why when O’Brien’s superior, Christine Serwinsky came into the office on Sunday evening, she handed her a statement detailing each transfer leading to the shortfall in customer funds.

(Which leads to the question why the SIPA trustee has required expenses of millions in IT and personnel to reconstruct all transactions to discover the transactions, while publicly claiming through press shills it was like untangling thousands of bundled telephone lines because everything was so “chaotic?”)

To this date neither John Corzine nor any of the former C-level Executives have been named a person of interest nor even questioned by federal investigators.   Only O’Brien and other back office employees remain at the center of the investigation in what is characterized by federal investigators as a sloppy back office.

After all, Corzine relied on them but they did not understand his orders.

2 April 2012


Photo Credit : The Big Fix the Movie


Further reading by some of those with the best coverage of the MF Global beat (and notably, not part of the MSM):

Janet Tavakoli

Corrected: MF Global: JP Morgan Produces the Smoking Gun


MF Global: The Awkward Construct of a Dual Bankruptcy and the Two Trustees

[EB: Jesse, contact us if you would: english at]

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mt paul's picture

MFGlobal collasped

 in it's own foot print ...

CheapBastard's picture

Throw all of the MFG'ers in the same jail cell and let them decide amongst themselves who Bubba (in the next cell) will get as his Bitch for 10 years.

Problem is everyone on Wall Street knows Zip will happen to them despite the crime. People have little confidence in Wall Street managed funds anymore from what I read.

dolph9's picture

This will happen to every one of us, eventually.

When they come for you, what will be your response?  Best to think and plan for these scenarios before hand.  So what if it makes for a cold and depressing workplace.  It's important to protect yourself.

At the very least don't give them the rope with which you'll be hanged. 

percyklein's picture

Why was Ms. Serwinski not called back from vacation? Not a smart question. The right one is why she was on vacation at this time. Whadaya think?  She was and remains a dumbass?

non_anon's picture

Jonnie CornCob, "Wham, Bam, Thank You, Ma'am"

Chief KnocAHoma's picture

Man these guys are slick! When will Obama speak about this to his loyal followers who think the system is rigged against them?

brettd's picture

I see profit in a Pay-Per-View of the Corzine depositions...

brettd's picture

Do  farmers still have pitchforks?

10044's picture

Yes, in addition to shit loads of guns and ammo

booboo's picture

I believe all men have a right to a fair trial and are innocent until proven guilty but god damn we cannot even get these fuckers into a court room to GET the facts.

andrewp111's picture

Corzine is a Big Dem. He is protected by The Great Obama, and won't be put on trial unless the other party wins in November.

Of course, if Corzine knows too much, Obama might have him killed, but he will never be charged with anything.

Buck Johnson's picture

No kidding, we can't get them into a courtroom and that is the problem.  We are officially a thirdworld nation.

tom a taxpayer's picture

Karma for Corzine.

"For Corzine, one of the more distressing aspects of the divorce involved David Tepper (a onetime Goldman trader) and the estranged couple’s Sagaponack house. “For years, friends say, Corzine had felt Tepper and Joanne were becoming too close,” Vanity Fair reports. “Bad blood between the two men dated back to 1992, when Tepper, a fixture on the high-yield trading desk, was passed over for partner; he went on to form Appaloosa Management, a hedge fund, and, over time, became a billionaire. Just days before the divorce was finalized, Joanne startled Corzine by suddenly insisting on keeping the Sagaponack house. Corzine had hoped it would become a gathering place for their children and a way to rebuild his ties to them. But Joanne insisted, and he gave in, valuing the house at roughly $9 million. That might have been the end of the story, except that Joanne has what one friend calls ‘a real nose for real estate.’ In 2010, after renting the house for a stunning $900,000 for a single summer, she sold it for $44 million. The buyer was none other than David Tepper. Corzine, friends say, was apoplectic. One suspects he grew even angrier when Tepper tore down the house to build one of his own. ‘That was just a massive fuck-you to Jon,’ recalls a friend.”"

disabledvet's picture

who are these people? WHAT are these people?

tedstr's picture

 Can you say "fraudulent conveyance"

ptolemy_newit's picture

300 million hand guns,  amerika the land of pussies.


LucasATX's picture

I remember being a bit perplexed when Corzine got the job at MF Global to begin with. After serving as the gov of New Jersey and then moving back into Finance as a CEO of MF Global? Kind of the same way I feel about Chris Dodd being the CEO of the MPAA.

It must suck for people who spend their lives working for the organization, waiting for their turn to run things and then realizing all of their hard work, talent, etc. really did not matter.

To be a CEO these days of a major organization you pretty much need to be a member of the ruling elite.

Kind of like John Thain being the CEO of CIT after doing a bang up job with Merrill.

I wonder why we are shocked when these people act they way they do?

They are the rulling elite - if you want to play the game you need to just shut up and like it. Then again, you can always quit playing their game and instead of investing your time and energy trying to stack FRNs maybe you should invest in things that matter like family, friends, community and precious metals.

ali-ali-al-qomfri's picture

Edith O’Brian = Bee Keeper the Pink Panther when the Inspector interrogates the staff….

here…. @2:05min..



SheepDog-One's picture

Corzine that greasy piece of shit I wish him and all his privileged partners in slime the worst imaginable demise!

bugs_'s picture

A word to all the future Ms. O'Briens - CYA file - copy in a safe place.

Plenty of Ms. O'Briens out there I'm sure.

stock trout's picture

You are assuming an honorable justice system where hard evidence to prove innocence is sufficient. Unfortunately our justice system is based on power and money, not on evidence.

DeadFred's picture

You assume she didn't. My bet is she walks because she has that file. If she didn't CYA then she's too stupid to be allowed to breathe air. Bet that she would have an out unless she was truly the guilty one. The question is whether the black ops team stole her copy. Then their question is "Did she only have one?" She walks. Or she is so ashamed she kills herself with two shots to the brain.

Joebloinvestor's picture

This shit would stop if we would ship these fuckers to China and let them deal with them the same way they delt with the melamine guys.

Gensler is on the short list.

Peter Pan's picture

It intrigues me that the USA has enough crazy people who are prepared to shoot fellow students and passers by, but not one has seen fit to have a shot at any of these crooks.

dolph9's picture

It's because a nation of free people has turned into a nation of serfs.

All because we want our fiat money and to be protected from those "terrorists" out there.

Janice's picture

Ladies and Gents,
Here is a prime example of when doing something under duress, but you know it is illegal or immoral, you should cover your butt with a tape recorder. Never go to a meeting without one. Her life is over, Corzine's life has just begun. It would have been far better if she'd resigned rather than follow orders and most likely, less stressful.

And as a side note. If the CEO takes a sudden professional interest in your mid-management job skills or duties, that most likely makes you the fall guy/gal. All the upper level management are friends of the CEO and will be needed for the next rigged game.

partimer1's picture

Lawless. Wild wild west.

jmcadg's picture

+100 Paul 451
You nailed it brother.

jmcadg's picture

It the back office was erratic, sloppy, unprofessional etc, why hadn't he fired their asses before now?

This is the biggest crock ever.

Geez The US is like '1984' for the masses, but total immunity for the few. Sickening. A new paradigm is needed and these shits need to be brought to justice.

Bubba's justice!

It has to be said, Corzine is 'B' list. I want to see Blankfein, Moynihan and the don Dimon sorted out. Evil fuckers.

lotsoffun's picture

after years of observing mr. your honor sir corzine - it's obvious why it took him 10+ years to get back to wall street.

they (street firms) didn't really care if he bought himself a senator and/or governor seat.  i suspect he's a degenarate gambler and the rest of the street figured that out and pushed him out.  besides the street knowing he was a patho-liar.  i doubt he has had any street allies for years and years, but he does have a lot of information.  that's why he walks.



DeadFred's picture

What part of your description doesn't make him a prime candidate for a Wall St. postion?

lotsoffun's picture

today it doesn't, but 10+ years have passed and that is exactly my point, and exactly why they gave him a balance sheet to play with.  you actually concur with me.  my point is things have digressed.  in the tween time, there were still a few prudent players in top financial positions that would not give him a shot at running a corporation.

Paul451's picture

It doesnt matter one goddamn bit what O'Brien did or did not do. Corzine was the HMFIC and, as such, is utterly and completely responsible. PERIOD. END OF STORY.

Motorhead's picture

How dare you talk about such an "honorable" gentleman.  And don't forget he was with the firm that is currently doing "god's work".

Dingleberry's picture

Edith deserves to burn for this.  Corzine does too. But at least he lies about "memory loss" n' shit instead of simply taking the 5th....maybe she is getting paid off to take the fall. After all, stealing billions of $$$ on Wall Street is the criminal equivalent of a parking infraction. It's not like she robbed a 7-11, or something that would land her in jail.

SmittyinLA's picture

Questions that we'll never hear a prosecutor ask:

Soooo Mr Corzine, you're claiming the "stupid bitch" defense?

.......and when you instructed Ms O'Brien to "move the money", you didn't tell her which account to move the money from?

Soooo where did you think the funds were coming from?

Elmer Fudd's picture

Stay away from showers, bathtubs, ledges, traffic, and nylon rope, Mrs. O'brien, those things have a nasty way of stopping breathing.

CompassionateFascist's picture

Or a 2 AM million volt taser to the chest: Breitbart.

MeelionDollerBogus's picture


Natural causes 'n' all

Right Matt Simmons?

That's right, Ms O'Brien

Eric L. Prentis's picture

The stink from MF Global’s bankruptcy and John Corzine is overwhelming. The putrid smell reaches into the highest levels of government, regulatory agencies, MSM and the financial elite.


One point six billion dollars misplaced? Come on, give me a break!

Bastiat's picture

The 757 that hit the Pentagon was also said to have "vaporized."  Interesting how they pulled that word our of the bag . . . well it worked last time.  It was a toss between that and "collapsed in its own footprint."

Getting Old Sucks's picture

Whorezine has to know enough shit about the crimes of many.  How many of the other crooks in high level government and finance are thinking that if he goes down, he'll bring them down for revenge.  Perhaps he'll be the one with the unfortunate accident.  He a danger to TPTB right now, Obrian isn't. 

Richard Whitney's picture

He stole from a client (LTCM), he caused big losses at his firm at the time, he screwed New Jersey finances, he had an affair as governor of NJ while married, then he screwed customers out of their funds. When will there be justice?

CompassionateFascist's picture

Corzine and his kind will die when the ZOG dies. Not until.

lotsoffun's picture

his kids love him. don't you love kids?  don't you trust their judgement.  they think pops is just aok.