A DAMNING report into the collapse of broker MF Global yesterday said the “negligent conduct” of former chief executive Jon Corzine and other executives at the company contributed to its shock demise.
In a stinging personal rebuke to Corzine, MF Global trustee Louis Freeh said the ex-leader’s increasingly risky strategy and lack of controls during the financial crisis helped kill off the company, which went bankrupt in 2011.
The 124-page post-mortem said Corzine – once governor of New Jersey – forced MF Global and UK subsidiary MF Global UK to start a “new and aggressive trading strategy”, investing in European sovereign debt through so-called repurchase to maturity (RTM) trades, outside the firm’s traditional remit of broking.
“When combined with other factors, strategic decisions and management lapses surrounding the company’s business, the Euro RTMs ultimately sowed the seeds of the company’s destruction,” the report said.
Freeh, a former FBI director, added that “glaring deficiencies were long-known to Corzine and management, yet they failed to implement sufficient corrective measures promptly”.