How a flirtation with risk led to the downfall of MF Global
The collapse of MF Global ranks as one of the top five bankruptcies in American history. The collapse is now the focus of investigations by Congress and Federal regulators. And, as former MF Global CEO Jon Corzine admitted in testimony last week, officials are clueless as to where $1 billion in customer funds is now.
Another collapse leads to the inevitable question: how did it happen? According to a thorough report in the New York Times, at the root of the failure was Corzine’s love affair with risk.
The report, which draws on documents and interviews with former officials, reveals that he played a “hands-on role” in the firm’s high-stakes risk-taking” and that “former employees and others close to MF Global portray a chief executive convinced that he could quickly turn the money-losing firm into a miniature Goldman Sachs.”
Corzine is set to appear before the House Financial Services Commitee this week with regard to the collapse of MF Global.