WASHINGTON — He set out to create a mini-Goldman Sachs. In the end, he built a mini-Lehman Brothers.
Former New Jersey Democratic Gov. Jon Corzine’s resignation Friday from the securities firm he led capped a week of high drama and swift failure.
MF Global collapsed into bankruptcy Monday, and Corzine has since hired a criminal defense attorney amid an FBI probe into the disappearance of hundreds of millions of dollars in client money.
MF Global’s implosion, which came after Corzine made a big, risky bet on European debt, revived memories of the 2008 banking crisis and the ruin of the much bigger Lehman.
As Corzine, 64, stepped down as chairman and chief executive, he said he felt “great sadness about what has transpired at MF Global.” Corzine, who ran the investment firm Goldman Sachs years before joining MF Global, said his resignation was voluntary.
Regulators said more than $600 million in client money is still missing. They said MF Global apparently moved the money out of client accounts as the company’s cash dried up.
The FBI is examining whether the firm’s actions amounted to a crime, two people familiar with the situation told The Associated Press this week. The New York Post reported that U.S. Attorney Preet Bharara in New York City is also investigating.
Securities firms are supposed to keep their own money separate from their clients’. That way, clients can retrieve their assets easily if the company fails. MF Global has maintained that the missing customer money is being held up by trading partners that froze its accounts.
