Jon Corzine Transferred $200 Million from Customers to JPMorgan
According to an October 28 memo sent by Edith O’Brien, a treasurer at the firm, the money was transferred “per JC’s direct instructions.” Three days later, the company collapsed.
O’Brien’s email is now in the hands of congressional investigators. When Corzine testified before Congress on December 8th, he said he had no idea where the $200 million had gone. “I did not instruct anyone to lend customer funds to anyone,” he insisted.
Document dump Friday afternoon...
The $200 million that eventually arrived wouldn’t have been enough to save the firm. But it could be more than enough to land Jon Corzine in hot water. The money was transferred from a “segregated customer account,” which can include both customer and company money. Using customer funds to fix up an overdrawn company account is illegal.
The story will continue in the next week as other MF Global executives take the stand. A JPMorgan representative will also testify, although the recent bombshell looks pretty good for them. According to Bloomberg, the British bank wrote a letter to MF Global regarding the transaction, hoping to ensure that any money to fund their account would be segregated from customer collateral. They wanted to get O’Brien’s signature. But the letter was never returned.