Federal regulators are poised to sue Jon Corzine over the collapse of MF Global and the brokerage firm’s misuse of customer money during its final days, a blow-up that rattled Wall Street and cast a spotlight on Corzine, the former New Jersey governor who ran the firm until its bankruptcy in 2011.
The New York Times reports that The Commodity Futures Trading Commission, the federal agency that regulated MF Global, plans to approve the lawsuit as soon as this week, according to law enforcement officials with knowledge of the case.
In a rare move against a Wall Street executive, the agency has informed Corzine’s lawyers that it aims to file the civil case without offering him the opportunity to settle, setting up a legal battle that could drag on for years.
Without directly linking Corzine to the disappearance of more than $1bn in customer money, the trading commission will probably blame the chief executive for failing to prevent the breach at a lower rung of the firm, the law enforcement officials said. If found liable, he could face millions of dollars in fines and possibly a ban from trading commodities, jeopardizing his future on Wall Street.
In a statement, a spokesman for Corzine denounced the trading commission for planning to file what he called an 'unprecedented and meritless civil enforcement action'.
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