Kicking Corzine Out of the ‘Club’ He Isn't Even A Member Of.

[ by Howard Haykin ]

Jon Corzine, the former Democratic senator who ran MF Global into the ground until it collapsed in 2011, faced expulsion from a group to which he did not even belong.   The National Futures Association, the futures industry’s self-regulatory group, conducted a meeting of its Board of Directs on Thursday.  One item on the agenda was:  consideration of  a lifetime ban from the futures industry for Mr. Corzine.

The motion was proposed by 2 of the FSA's newest board members who sought retribution for Mr. Corzine’s role in the demise of MF Global - which improperly took $1.6 billion from its customers, supposedly held in segregation, before filing for bankruptcy.  To pass, the motion needed a "YES" vote from a majority of the board members. 

However, at the conclusion of the meeting late on Thursday, the group issued a cryptic statement suggesting that Mr. Corzine could not be so easily ostracized because of a small technicality - “Mr. Corzine is not currently a member of N.F.A.,” the Chairman declared in the statement.

There are other problems noted by the Chair ... in the Board's statement.  For one thing, any action against Mr. Corzine could have complicated a continuing federal investigation into MF Global’s misuse of the customer cash. 

"N.F.A.’s board understands that there are ongoing investigations concerning Mr. Corzine’s activities at MF Global and does not wish to take any action that could interfere with those investigations," chairman Christopher Hehmeyer said in the statement.

Still, Mr. Corzine is not necessarily free of any future wrath from the group.  "Once the appropriate agencies have completed their investigations, N.F.A. has the authority to bring disciplinary action against Mr. Corzine for violations of any N.F.A. rules that occurred while he was a member,” Mr. Hehmeyer said. (He was, presumably, a member when he ran MF Global, once one of the major players in the futures industry.) “The sanctions for disciplinary actions could include a lifetime ban and significant monetary fines," he explained.

For further details, go to:  [ Dealbook, 2/21/13 ].