At a December 8, 2011, congressional hearing after MF Global’s bankruptcy, former CEO Jon S. Corzine said he never intended to direct or commingle customer money. That was his account of his intent—not proof that no customer funds were transferred, or a final finding about who was responsible.
What did Corzine mean by “never intended to commingle funds”?
Corzine made the statement while testifying before the U.S. House Committee on Agriculture. MF Global had filed for bankruptcy protection on October 31, 2011. At the time, customer money was required to be kept separate from the firm’s own funds.
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In contemporaneous coverage of the hearing, The Washington Post quoted Corzine: “There is never any directed intent to commingle those funds.” He said he had not intended to direct a transfer of customer funds to firm accounts. He also said that if his words were understood as an instruction to use customer funds, that was a misunderstanding.
Corzine referred to words he said he used on the evening of October 30: “Someone could misinterpret, ‘We’ve got to fix this’ — which I said the evening of Oct. 30 – ‘We’ve got to find the money.’” He said he did not know where the money was or why accounts remained unreconciled. These were statements about what he intended and knew; they do not establish what happened to every account or settle responsibility.
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The Washington Post’s December 8, 2011, report on Corzine’s testimony records his account and the exchange about the “find the money” phrase.
What happened to MF Global customer money?
The customer-funds shortfall was a central concern in the hearing. The House Agriculture Committee’s activity report later described the hearing as addressing reports of as much as $1.2 billion in missing customer funds. That is the amount reported in the committee’s retrospective summary, not a final reconciled loss or an adjudicated finding.
Corzine’s denial of intent and the reported shortfall are different kinds of evidence. His testimony describes his position; the committee report describes the scale of the reports discussed at the hearing. Neither, on its own, establishes the complete path of the funds or a final conclusion about individual liability.
The committee’s 2012 activity report summarizes its December 8, 2011, hearing and the reported amount under discussion.
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The customer liquidation was handled separately from the bankruptcy proceedings of MF Global Holdings Ltd. James Giddens was the court-appointed Securities Investor Protection Act (SIPA) trustee for MF Global Inc. In testimony to the committee, trustee counsel James Kobak Jr. described the mandate as “to preserve and recover MF Global Inc. customer assets so that they can be returned to the rightful owners.”
That recovery role was distinct from Corzine’s account of his intent and from the separate Holdings bankruptcy. Kobak’s testimony explains the trustee’s mandate; it is not firsthand evidence of every event before the bankruptcy.
Kobak’s testimony to the House Agriculture Committee describes the SIPA liquidation and distinguishes it from the Holdings bankruptcy proceedings.
How to read the competing claims
- Corzine’s testimony: his account that he did not intend to direct or commingle customer funds.
- The reported shortfall: the committee’s account of reports of up to $1.2 billion in missing customer funds at the hearing.
- The trustee’s work: a court-appointed process to preserve and recover MF Global Inc. customer assets for their owners.
Keeping these categories separate matters: a statement about intent is not a finding about whether a transfer occurred, and a reported amount is not necessarily the final amount recovered or a judgment about liability.
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