MF Global Criminal Case Unlikely

Here’s shocking news: several sources are reporting that top executives at the defunct MF Global will not be facing criminal charges.

The criminal probe into the defunct primary trader and the “disappearance” of about $1 billion in customer loot is heading into the homestretch after 10 months. During this time federal authorities have not found any evidence of “criminal conduct.” Instead they are coming to the conclusion that “chaos and porous risk controls,” rather than fraud, allowed the missing loot to go AWOL.

The New York Times Dealbook notes that were many impediments to building a criminal case and finding evidence of fraud requires a high bar of intent rather than a silly matter like negligence. Of course, how a firm goes about being “reckless” with $1 billion in customer funds is curious from the outside looking in. Then again, the fact that so much money could just get up and walk away without anyone noticing seems rather unlikely.

But this follows the pattern of other financial scandals where the Feds were able to press on with civil charges and recapture some dough by way of penalties and disgorgement. That being said, “a lack of charges in the largest Wall Street blowup since 2008 is likely to fuel frustration with the government’s struggle to charge financial executives,” says the Dealbook.

In the end, the fact that no criminal charges will come to bear against Jon Corzine and his flunkies is another indication that the MF Global investigation is drawing to a close. And this is the case with an array of probes of big financial firms and their officers and directors stemming from the financial crisis of 2008.

Meanwhile, the fallen Mr. Corzine is said to be considering starting a new hedge fund in a play to “rebuild his image and engage his passion for trading.”

As if it’s not enough that his stewardship of the MF Global caper, coupled with his dubious legacy as Governor of New Jersey, which was highlighted by a car wreck on the Garden State Parkway where his driver was cruising way beyond the speed limit while Sir Jon rode along sans seatbelt is not enough to leave him permanently scarred.

And before he threw his hat into the political arena, wasn’t he ousted from his position as Chairman of Goldman Sachs for mega millions in losses for busted bond deals? And although there may be no criminal charges in the MF Global Caper, one would think that the SEC can find sufficient reason for the Tarnished Galahad to at least be temporarily barred from coming back to the industry based on such a “reckless” history.

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Kyle Colona is a New York-based freelance writer and a Feature Writer for CompliancEX and the Wall Street Job Report. He has an extensive background in legal and regulatory affairs in the financial services sector and his work has appeared in a variety of print and on-line publications. You can find him on linkedin.

About Kyle Colona

Kyle Colona is a New York-based freelance writer and a Feature Writer for CompliancEx and the Wall Street Job Report. He has an extensive background in legal and regulatory affairs in the financial services sector and his work has appeared in a variety of print and on-line publications as well as his blog, “Colonaville.”

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