What's Next for Jon Corzine?  

Jon Corzine, the former New Jersey governor and Goldman Sachs (NYSE: GS  ) CEO, resigned as chairman and CEO of MF Global, the broker-dealer with roots to the colonial days that filed for bankruptcy earlier this week amid a massively leveraged bet on European debt.

Perhaps tellingly, Corzine hired high-profile white-collar defense attorney Andrew Levander, who also helped defend former Merrill Lynch CEO John Thain (another Goldman alum), Ezra Merkin, who was sued by clients for being caught up in Bernie Madoff's Ponzi scheme, and a host of Wall Street banks including Goldman, JPMorgan Chase (NYSE: JPM  ) , and Morgan Stanley (NYSE: MS  ) , according to The Wall Street Journal.

MF Global admitted to transferring client money into corporate coffers as the firm's liquidity ran dry. This flies against the normal broker/client relationship, and is possibly a serious legal violation. "Customers' funds must be kept separate from company money. One of the basic duties of any brokerage firm is to keep track of customer accounts on a daily basis," wrote The New York Times. Some have speculated that Corzine could now face legal charges. According to Fortune:

Corzine has not commented publicly on MF Global's collapse, let alone to say if he authorized the fund transfers. But multiple sources tell me that the sentiment within the MF Global ranks is that Corzine either gave explicit orders to mix the funds or at least was aware of what was going on, adding that only a limited number of people could have made such a decision. Fortune has been unable to confirm the underlying veracity of that sentiment but, if accurate, Corzine would seem to be in violation of the law.

How about that? Three years after Lehman Brothers exploded, and it looks like we're back to square one: reckless risk-taking, sky-high leverage, and a flagrant disregard for clients and the law.

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. The Motley Fool owns shares of JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On November 04, 2011, at 10:34 AM, MaxTheTerrible wrote:

    "What's Next for Jon Corzine?"

    - Hopefully a prison term.

  • Report this Comment On November 04, 2011, at 10:45 AM, elgin74 wrote:

    He should have stayed in politics. There he could have done stuff like this without any repercussions. I'm glad he wasn't a republican senator and governor or it would be talked about in the media how the former republican politician had done this terrible thing, but since he is a democrat nothing will be said in the media about his former political career as a democrat.

  • Report this Comment On November 04, 2011, at 11:13 AM, jwilharm wrote:

    It's every clear now why the public pension fund in NJ wasn't funded and why property taxes are so high. I guess in the private sector there's no one to raise taxes on when you go bankrupt through poor decision making.

  • Report this Comment On November 04, 2011, at 11:28 AM, MajorBob04 wrote:

    If it's true (and proven) that he did this, it makes me wonder whether he did this as a politician . . .

  • Report this Comment On November 04, 2011, at 12:05 PM, yavapaiman wrote:

    Corizine should die in prison. But what about all the big time politicians who created this current economic mess?

    Bush the First, Clinton, Bush the Second and Obama for starters.

    The worst are Barney Frank, Chris Dodd, Alan Greenspan and Ben Bernanke.

    Of course the's a host of others who promoted the CRA and blackmailed the banks into making loans they never would have made otherwise.

    See

    http://www.theatlantic.com/business/archive/2009/06/rethinki...

    http://www.cato.org/pubs/regulation/regv17n4/vmck4-94.pdf

    http://www.realclearpolitics.com/articles/2008/09/the_rest_o...

  • Report this Comment On November 04, 2011, at 12:24 PM, TMFBane wrote:

    I think he should give John Meriwether a call! Imagine the damage they could cause, if they were to join forces. Here's an interesting piece from Roger Lowenstein making the connection between the two:

    http://www.bloomberg.com/news/2011-11-02/corzine-forgot-less...

  • Report this Comment On November 04, 2011, at 12:33 PM, markzzzzzz wrote:

    That's right! If he had been a republican msnbc would be ranting with chris log in my eye matthews

    about what a crook and total disreguard for the working man he is.But since he is a republican they will blame it on wall street and call for more protest!

    So Obama and his socialist can finish what they have started , turning this country into a Socialist Goverment!

  • Report this Comment On November 04, 2011, at 12:41 PM, dfrizzle03 wrote:

    i meant @ MaxTheTerrible

  • Report this Comment On November 04, 2011, at 12:58 PM, MaxTheTerrible wrote:

    @dfrizzle03

    Actually, as a taxpayer, I have no problem with "supporting" Corzine's (or any other crook's for that matter) jail term.

    Instead of shooting him we should require him to repay the losses in full.

    I strongly believe that something like this should not be allowed to be discharged in a bankruptcy.

  • Report this Comment On November 04, 2011, at 1:01 PM, Darwood11 wrote:

    @TMFBane

    Thanks for the link to the Bloomberg article.

    I like the line "Best to keep the gamblers where they can’t do so much harm." This should be applied to politicians as well.

  • Report this Comment On November 04, 2011, at 1:39 PM, stantonabc wrote:

    Corizine is just a plain bad actor.

  • Report this Comment On November 04, 2011, at 1:42 PM, cattywampus wrote:

    No rock should be left unturned. This thread should be pulled until it unravels the whole fabric of this scheme, no matter where it leads to democrats or republicans.

  • Report this Comment On November 04, 2011, at 4:43 PM, overley wrote:

    Let's see if Corzines connections can save his bacon. You don't bundle millions of dollars for politicians and actually expect to pay for your crimes.

  • Report this Comment On November 04, 2011, at 5:09 PM, switchingtoguns wrote:

    Madoff is about to have a new cellmate!!!

  • Report this Comment On November 04, 2011, at 6:07 PM, xetn wrote:

    "How about that? Three years after Lehman Brothers exploded, and it looks like we're back to square one: reckless risk-taking, sky-high leverage, and a flagrant disregard for clients and the law. "

    How can that be after passing Dodd-Frank that would protect all us unknowing investors from the likes of Maddoff? Perhaps doing ones own due diligence is still better than any government "protection".

    As for putting the chief crook in prison, why not take his money and give it back (cents on the dollar?) to the investors. Putting him is prison just makes the taxpayer pay for his room and board. Sure, he is behind bars but so what? Sure, he becomes someones bitch, hmmm. Maybe he would get some of what he gave?

  • Report this Comment On November 04, 2011, at 6:11 PM, TMFHousel wrote:

    <<How can that be after passing Dodd-Frank that would protect all us unknowing investors from the likes of Maddoff? >>

    What parts of Dodd-Frank applied to MF Global?

  • Report this Comment On November 05, 2011, at 6:17 AM, maiday2000 wrote:

    What's next? Hopefully oblivion.

  • Report this Comment On November 05, 2011, at 12:52 PM, tomd728 wrote:

    A Devil's Island retreat for Jon and that hideous

    beard.(I get all scratchy when I'm blessed with

    his image)

    Thank the Lord for Chris !

    Tom

  • Report this Comment On November 05, 2011, at 1:00 PM, whereaminow wrote:

    --->What parts of Dodd-Frank applied to MF Global? <----

    Who knows, Morgan? Did you read all 2,300 pages?

    xetn's point, which I am sure you know, is that the liberal utopian idea of benevolent regulation does not exist. There is no regulation better than bankruptcy. We need more liberty and less Progressivism. And of course, we need to abolish the Federal Reserve, who not had regulatory power over MF Global, their funny money made MF Global possible. Without the Fed, there is no investment banking crisis.

    David

  • Report this Comment On November 05, 2011, at 1:00 PM, whereaminow wrote:

    who not had = who not only had

    David

  • Report this Comment On November 05, 2011, at 4:00 PM, DividendsBoom wrote:

    Housel always comes in to try and be the god-like voice on the issue, thank you David for rebuking him better than I ever could. Typical Housel won't address David's response because he knew the answer all ready, he will just ride off into the sunset. I am a fan of Housel articles, but he should just stay off the comment board. I mean is the actual literal writing of Dodd-Frank as meaningful as what it was supposed to politically represent? I got your response all ready written for you Housel -- "What part of Dodd-Frank said this bill is for political reasons?". There it is, that was Housel. Take it away David.

  • Report this Comment On November 07, 2011, at 3:29 PM, dfrizzle03 wrote:

    @ whereaminow----

    Nailed it. Maybe it wasn't Dodd Frank. So what? Isn't the SEC supposed to be keeping a watch on the commingling of funds? YES! So the point which you made perfectly is, why the hell should we trust a new regulatory body when the ones already around can't/ won't do what they're supposed to? It's ludicrous and, completely irrelevant, Obama is a jackass for even having the crooks Chris Dodd and Barney Frank put in their two cents to come up with a bill. They should be shot along with Corzine!!!

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