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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mrdenis's picture


Brother can you spare a dime .....

Reuters) - An MF Global bankruptcy trustee asked a judge on Monday to release $25 million in insurance money to pay defense costs for Jon Corzine and other former MF Global officers facing civil lawsuits over the broker's October collapse.....


MeelionDollerBogus's picture

what the fuck? With all the money he stole he can pay out of pocket for lawyers.

tony bonn's picture

this is an excellent article with the astute observation that the fix is in...corzine is so well connected to the bush crime syndicate that he is totally teflonized....the operation has all of the dna of a bush crime - similar to the october surprise....

the treasurer was out of the country to frame edith....the pompous corzine could claim plausible deniability in knowing about the details of the transactions even though he was the principal, with jpm, in executing the crime...

the bullshit about operating in a cone of silence from his staff is the most laughable horseshit excuse i have ever heard....

corzine is a piece of shit....he is guilty as sin....but he will walk....

jag's picture

The "bush crime syndicate"?

A long term, certified, Democrat?

Seriously, you are demented.

MeelionDollerBogus's picture

Actually the combined criminal family activities of the Bush dynasty and the Clinton dynasty, working together, has been documented. Shipping cocaine together.

Boxed Merlot's picture

I think you may need to check up on his Teneo legal representation.  As far as clandestine drug running, check out the head of Teneo's ties to Mena, Arkansas while he was governor of that state. 

2 12 year old boys were murdered in that little escapade and their memory has been all but forgotten by the FBI to this day. 

HarryM's picture

They practically have a video of Corzine loading the cash into the truck of his car.


How much F'n evidence do they expect to get?

Convict the prick - make an example out of him

Transformer's picture

What? are you guys saying here?  You think the treasurer was away on purpose?  You think they framed this woman?  That's just too far from what is believable.  She obviously is the perp.  An ex Senator, ex governor doing this kind of stuff?  Never!!

eatthebanksters's picture

I'd rather see a pissed off farmer waste the might put some real fear into the rest of the bastards on Wall Sreet who think they are above accounability...

GMadScientist's picture

You're dreaming; their pathology does not allow for the intrusion of such rational thoughts.


Hedgetard55's picture

Don Calzone will walk, while Edith will be "Martha Stewarted", after which her husband will kneecap Don Calzone with a .45 cal pistol.

Widowmaker's picture

Kneecapped my fucking ass.

His face will be a blood shake or he disappears.

Couldn't happen to a finer faggot, but he will walk unscathed.

toadold's picture

"But you can't arrest or detain my client for that unproven crime" We aren't arresting him for that, Congress has however, has redifined the meaning of pest and varmint. We aren't even going to put him in prison. We will however neuter him, chip him, cut one of his Achelies tendons,and brand his forehead with a large T so people will know what kind of animal  they are dealing with. The thing you have to worry about is they are still working on which lawyers fall into the varmint classification."

Eireann go Brach's picture

What is shocking to me, is that not one of those farmers have paid this guy Corzine a visit and made an example of him! Surely there is one nutter among them?

Clovis Man's picture

So, are we placing bets on how long does Edith have before her fatal accident?

GMadScientist's picture

Bah...quit being so melodramatic. Perhaps that 5th plea was just a well-paid days work, if you get my drift.

Look at that, Edith's Aunt won the lotto. What're the odds?

DeadFred's picture

2:1 before the election.

semperfi's picture

3 months or less - July 7 or earlier

Lost Wages's picture

Oh lord, please help me remember where the money is before someone breaks my legs.

zilverreiger's picture

I think O'brien was the woman that pleaded to remain silent at the last congressional hearing.

There must be terrible pressure on her. Why doesn't she rat them all out in exchange for penalty reduction? She has to fear for her life either way.

Boxed Merlot's picture

The people she has to make a deal with are the same ones protecting Corzine.  She is definately in a no win situation.  But so are we.

imaginalis's picture

She has most likely been hit with weapons of mass instruction

CompassionateFascist's picture

If Edith tells truth, she learns the wherabouts of Judge Crater. If she keeps quiet, she'll be handsomely rewarded.

eddiebe's picture

I doubt this will end up in front of a jury, rather it will end up in front of a judge who will dismiss the case. That judge then will end up nominated to the supreme court.

Papasmurf's picture

Not to state the obvious:  presidental pardon

eddiebe's picture

I doubt this will end up in front of a jury, rather it will end up in front of a judge who will dismiss the case. That judge then will end up nominated to the supreme court.

Boxed Merlot's picture

That judge then will end up sitting on the supreme court.


fixed it.

Centurion9.41's picture

Seriously, this BS will be blown out of the water in court in front of a jury of people.

#1 the segregation of funds is so fundamental to the business that everyone, and I mean EVERYONE knows it's sacramental.

#2 the hallmark of great leaders is their calm under chaos; and Im sure there is plenty of information out there where JC paraded and promoted himself as being a cucumber.

#3 does anyone really think people arent going to roll over?

The only ones who buy BS "they are going to get off" outcomes in situations like this are scumbag lawyers & business men who think semantics with letters of law are all that matters.  Like Clinton with his "is".

JC will have no political cover and he will end up being convicted like Lay, Skilling, Scrushy, etc.

The problem is the list is far, far too short.

Boxed Merlot's picture

Like Clinton with his "is"...




It's Clinton's outfit, Teneo, that Corzine had on retainer up until the end for just an event like this.  That's why Freeh is involved and the Jon continues to walk. 

C'mon, judges are falling all over themselves wanting to adjudicate this case so they can find him innocent and wind up on the SCOTUS.

XitSam's picture

Wouldn't the CEO have the authority to override "internal controls"?  Or put another way, "Can Jon Corzine create a rule that even he can't break?"

aerojet's picture

Honestly, why aren't we already just shooting these assholes?

LowProfile's picture

Too quick.  Seriously.

Better to put them to work in the prison cafeteria 25 to life.

Unless of course, you're talking about putting a few rounds in their nuts.  That would be a nice touch before they are arrested.

GMadScientist's picture

21st century pillory: pump them full of LSD then handcuff them naked to a lightpole in Camden. 

Centurion9.41's picture

Agreed, simply not enough satisfaction in killing them. 

However I am surprised some nut jobs havent taken Black Knight shots at them;

Urban Roman's picture

The buck stops, uhhhmm, on somebody else's desk.

Sequitur's picture

The headline and substance are spot-on. Anytime the corporate suits "speak," they merely are mouthing their defense lawyer's words. These defense lawyers are nothing more than high-priced mental prostitutes.

Zero Govt's picture

when Corzine says, "I simply do not know where the money is" he is answering the here and now, not the actual question of how and where it went

Money simply does not move off a backoffice employees individual decision to another party such as JP Morgan et al ....JPM called you and demanded margin, you had to stump up the money, where'd you find it Corzine, your own credit lines, your own pocket, or customer funds???

the scandal is twofold, Corzine taking crazy bets, JP Morgan sucking MF Global dry as they did to Lehmans, as Goldmans sucked AIG dry

the stunning thing about the Congressional investigation is how there was zero focus on JP Morgans role in collapsing MF Global and how they hold MF customers money

the mess and carnage in the wake of these NY gangster firms, from US property and MBS's to Lehmans, AIG and now MF Global just underlines you shouldn't do business in or with New York

LowProfile's picture

It will be interesting if politics still matter enough in this country for the current administration to throw Corslime under the bus.

Ripped Chunk's picture

GS alumnus. It won't happen. Corzine is financial mafia, untouchable.

j0nx's picture

Only because the American people continue to allow it. These people serve at our leisure which is what they forgot because Americans are asleep at the wheel doped up with DWTS and Prozac.