Former Goldman, Sachs CEO Jon Corzine will not be facing any jail time for “misplacing” a billion bucks. He will, however, be retaining the pay he “earned” while heading his firm, MF Global. The DoJ is preparing to end its investigation into the case of the magically disappearing money without bringing charges against the company or any of its employees, including Corzine. Tough shit for the customers who invested with MF Global. But it’s not all bad news; Corzine is going to open a new hedge fund, so you will have a chance to trust him with more money and perhaps (snort) make up for that cash of yours, which he “lost” last time.
The New York Times published a front-page article on August 16 reporting that the US Justice Department is preparing to end a ten-month criminal investigation into the collapse of the Wall Street brokerage firm MF Global without charging the company or any of its employees.
This is despite what the Times called the “disappearance” of some $1 billion in customer money that emerged when the firm filed for Chapter 11 bankruptcy protection last October 31. MF Global raided clients’ accounts in an attempt to meet margin calls in the days leading up to its collapse. The newspaper reports that $175 million of this stolen money went to JPMorgan Chase.
The failure of the firm, on the other hand, left “farmers and other customers out millions,” according to the Times report.
Nevertheless, the company and its former chairman and CEO Jon Corzine are likely to be given a free pass by the government. The Times cited “people involved in the case who spoke on condition of anonymity,” making clear that news of the government whitewash had been deliberately leaked, presumably in an effort to prepare public opinion and dampen popular outrage. […]
After being forced out of Goldman Sachs in 1999, Corzine used $62 million of the $400 million fortune he had accumulated to get himself elected US senator from New Jersey.
In 2005, he used another $38 million of his own money to win the state house in New Jersey. As governor, he imposed brutal cuts in health care, pensions, higher education and aid to the cities, as well as slashing 5,000 state jobs. As a result, he lost his reelection bid in 2009 to Republican Chris Christie. [Teri’s note: Well, that turned out better for ya, dint it? Such are the “choices” given the voters.]
In March of 2010 he became chairman and CEO of MF Global. He began making enormous bets with borrowed funds that the sovereign debt of countries such as Spain and Italy would not collapse, including a single bet of $6.3 billion—six times MF Global’s capital. When the firm reported a second quarter 2011 loss of nearly $190 million due to the worsening of the European debt crisis, investor confidence in the company collapsed.
Nevertheless, in the 18 months he headed the firm before running it into the ground, Corzine took in $14.25 million in total compensation. The August 16 New York Times article reports that Corzine is now considering launching a hedge fund.
The refusal of the government to prosecute MF Global or Goldman Sachs and their respective executives is anything but an aberration. Nearly four years since the Wall Street crash of September 2008, not a single high-ranking banker has been criminally prosecuted, let alone jailed.
Federal regulators have refused even to hold civil trials for bankers up to their necks in corrupt and illegal practices. Instead, the government has arranged one settlement after another in which financial firms and executives paid token fines and in return were let off without admitting guilt.
The Obama administration has brokered the following major settlements:
* In July 2010, Goldman Sachs agreed to pay $550 million in a settlement with the SEC on charges of misleading buyers of mortgage-related investments.
* In October 2010, Countrywide Financial CEO Angelo Mozilo agreed to pay $67.5 million to settle an SEC investigation into fraud and insider trading practices in the sub-prime mortgage market.
* In March 2011, the Justice Department dropped a criminal probe of Mozilo without laying any charges.
* In June 2011, JPMorgan Chase paid $153.6 million to settle a civil fraud case with the SEC.
* In July 2011, Citigroup settled a civil fraud case with the SEC for $75 million.
* In February 2012, the Obama administration brokered a settlement with Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial over rampant fraud and forgery in the processing of foreclosure documents. The banks were penalized a combined $25 billion—only $5 billion of it in cash—in return for the quashing of 49 state investigations with the potential for tens of billions in fines. The settlement enabled the banks to accelerate their foreclosing of homeowners. [Teri’s note: and the remaining 20 bb will be coming from taxpayers. Further, if you were foreclosed on fraudulently – and you can prove it – you may be entitled to a whopping $2500 or thereabouts. For the loss of your home. Plus, there is an idea being bandied about Congress for legislation which would grant taxpayer money to tear down the houses the banks don’t really want after they’ve foreclosed, so the banks wouldn’t even have to pay to raze the houses they took.]
The record speaks for itself. The American financial aristocracy is above the law. It lies, steals, cheats and destroys livelihoods with impunity, protected by its bribed political representatives. It has turned the economy into its personal gambling casino, secure in the knowledge that its losses will be covered by public funds. -Barry Grey
These are the “job-creators”. They are protected by all the lines of defense we thought were working for the people. In case it has escaped your notice, we are protected by no-one. (By the way, when the DoJ or SEC “settles” with one of these big financials, where does the money go? Does the government get to keep the fines and settlements, or does the money go out to the actual people who were hurt by the fraud and other assorted crimes? Is there a difference between a “settlement” and a “fine” as far as where the money goes? I thought someone should ask. I do not know.) Unbelievably, some of us think it would be a great idea to end social security and ask people to invest in Wall St.-backed retirement accounts. And just what do you suppose will happen if Lloyd (Blankfein) or Jon (Corzine) or Jamie (Dimon) or Vikram (Pandit) “loses” your 401k? Well, I’d suggest it will be the same exact thing that is happening now to the guys who lost your retirement funds in ’08 – not one damn thing. Except that they continue to get wealthier by leaps and bounds. Funny how that works.