Former MF Global Holdings Chairman and Chief Executive Officer Jon S. Corzine’s risky business strategies and mismanagement helped accelerate the futures brokerage’s demise, according to a report by bankruptcy trustee Louis Freeh.
Bloomberg reports that the 124-page report blames Corzine and his management team for bungling an expansion of the company’s traditional business model while ignoring deficiencies in its risk controls.
Corzine’s 'aggressive trading strategy' that invested heavily in European sovereign debt produced no significant revenues, and he and Chief Financial Officer Henri Steenkamp knew that the company’s controls were flawed as early as May 2010, according to the filing Thursday in U.S. Bankruptcy Court in Manhattan.
Capital and liquidity assumption 'were fatally flawed, even though Corzine and other members of his management team knew about their deficiencies many months before they were stretched to their limits' in October 2011, lawyers for Freeh said in the report.
The parent company of brokerage MF Global Inc. filed for bankruptcy on October 31st, 2011, after a wrong-way $6.3bn trade on its own behalf on bonds of some of Europe’s most- indebted nations.
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