Democrat Jon Corzine got about half a billion dollars from Goldman Sachs and used some of that money to buy a senate seat and the New Jersey governorship. Now, I suspect, he’s using some of that money to prevent his indictment for using customer money to pay off his losing bet on European bonds…over a billion dollars worth of customer money.
If there is a poster child for over-the-top Wall Street malfeasance, Jon Corzine is it. Yet a year after telling investigators that he doesn’t know where customers’ money went, there is no indictment. One can’t help but wonder if the reason is that he’s busy raising hundreds of thousands of dollars for Barack Obama’s re-election campaign.
Jonah Goldberg writes:
Corzine proceeded to do exactly the sorts of things Wall Street has become infamous for: making crazy bets with other people's money, counting on governments to bail out the private sector and, allegedly, expecting to get friendly treatment from regulators. Gary Gensler, chairman of the Commodity Futures Trading Commission, was an old friend and colleague of Corzine's at Goldman Sachs and in Washington. Gensler had been a key aide to Sen. Paul Sarbanes and had reportedly worked closely with Corzine writing the Sarbanes-Oxley bill. At MF Global, under Gensler's watch, Corzine bet more than $6 billion on the European sovereign debt crisis, using borrowed client money. MF Global also apparently commingled client and company funds to pay off financial obligations, which is illegal.
Goldberg misses one point; investment firms can’t “borrow” client money. Not ever. You cannot take money from segregated client accounts and use it to make investments for the firm. You can’t do that, and if you do you go to jail. Unless you are Jon Corzine and you are one of Barack Obama’s big campaign contributors and then you can expect the cops to back off, and live a life of ease on your half a billion in assets.
We may be seeing exactly how much it costs to buy a get-out-of-jail-free card.