Corzine is Going to be the Best Show Since Watergate [10]
Courtesy of Russ Winter of Winter Watch at Wall Street Examiner [10]
Finally after five months of investigations comes the Jon Corzine MF Global bombshell Friday [Bloomberg: Corzine Ordered Funds Moved to JP Morgan] [11]. The Bloomberg article references an e-mail written by Edith O’Brien, the assistant Treasurer at MF Global and a memo written by congressional staffers. A few aspects are of note: first that Corzine “gave direct instructions” to transfer $200 million in segregated consumer funds to JP Morgan for payment on an overdraft and used a lower level functionary O’Brien to carry it out. Then in a clear violation of fiduciary responsibility JP Morgan’s risk officer asked MF Global for a letter stating these funds were not customer segregated accounts, but then took the money anyway. The chief counsel for MF Global nixed the letter JPM sent over as “too strong”.
O”Brien is to testify before Congress on Wednesday, but will plead the Fifth. This suggests she has not been offered a deal, or immunity.
The captured regulatory agencies have not weighed in on this now nearly five months after this historic crime. On the overall issue of fraud and regulatory capture, view this Max Keiser and Mark Melin [12]clip.
The Corzine ties into the labyrinth of the Obama Administration are dark and deep. It is a virtual 6 degrees of Kevin Bacon sistema (the word used for this form of government in Brazil) and in every sense of the word a criminal enterprise. Here are various clips [13]of Obama and Biden heaping praise on Jon Corzine.
This is what Obama says about Jon Corzine. I can see why Obama likes him so much. They both have the same moral compass.
“Like many of us in public life today, Jon is a leader who’s been called to govern in some extraordinary times. He’s been tested by the worst recession in half a century — a recession that was caused by years of recklessness and irresponsibility and a do-nothing attitude. It was caused by the same small thinking that has plagued our politics for decades — the kind of thinking that says we can afford to just tinker around with our problems, we can put off the tough decisions, defer the big challenges. We can just tell people what they want to hear instead of what they need to hear. Well that’s not the kind of leader that Jon Corzine is.”– Barack Obama, July 2009
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-and “John Corzine is the smartest man in the room”….Joe Biden
It is hard for me to imagine that Obama can shuck and jive this one. Is he really going to revert to his shameful 60 minutes interview [14]where he makes excuses for criminal conduct on Wall Street and twists the logic around to make himself look righteous. I have to think he may just turn the dogs loose on Corzine, but where does that lead? Corzine was more than a fund bundler, crony, and influence peddler. He was instrumental in stacking the Obama administration with his associates. What happens with CFTC apparatchik and former Corzine employee at Goldman Sachs, Gary Gensler for example? CFTC was charged with regulating MF Global. What about Eric “Empty Suit” Holder, Obama’s attorney general, who never met a Wall Street crime he didn’t like? And what about JP Morgan’s role in this? This should and might be the biggest story since Watergate. My favorite from the wag comment gallery: “Can we possibly take down Corzine, JP Morgan, and Obama all in one fell swoop? No way my life gets that good!!! No way.”
This will also be the supreme test of the two-tiered Justice system in this country. I am certain that Corzine will claim:
1. There was only an alleged call, no email from Corzine?
2. No form returned to JPMorgan?
3. Did JPM allow the transfer illegally?
4. And “Segregated accounts can include customer money and excess company funds.” So if he did want the money transfered did someone mess up and not transfer just company funds?
Still
1) Ignorance of the law is not a valid defense.
2) The violation of fiduciary duty could result in civil liability, even if Corzine is not criminally liable.
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