The man above, Jon Corzine (photo copyright Forbes) just finished spectacularly crashing his firm – MF Global – as if it were 2008. 40 to 1 leverage on European bonds. And now the FBI wants to know if maybe ol’ Jonnie used some of his customers’ money to make this huge and fateful wrong bet.
It’s likely, regardless of what the FBI discovers, that there’ll be any serious consequence for Corzine. He’ll wash his hands in bankruptcy court and walk away from it.
Just like all the others did. Except for the ones we bailed out, that is. They were "too big to fail."
For those who don’t follow the game closely, Jon Corzine is a Democratic politician and long-time baron of Wall Street. Earlier this year, he lost his brief job as Governor of New Jersey to Chris Christie. Before that, he ran Goldmine (Goldman) Sachs. You may recall that firm being in the news in late 2008.
Oh, it’s all one big club, these titans and barons who run the money in the United States.
As a Democratic Party pol, Corzine decried the exorbitant salaries on Wall Street. So what kind of a deal did he make for himself at MF Global? A tiny salary of 1.5 million dollars per annum, a signing bonus of 1.5 million dollars, 11 million in stock options, and 400 grand to his lawyers for setting up his compensation plan. And let’s not forget…the back end of the deal, which says if he leaves MF Global, his options immediately vest, he gets 12.1 million in cash as “severance”.
By the way, MF Global’s second-quarter report shows 64 percent of the firm’s revenues went to compensation. The only businesses in the world that operate this way are Wall Street firms.
These guys keep doing this, and keep getting away with it without a consequence.
We learned nothing from 2008.
