Goldman Sachs boss Corzine criticised for role in MF Global collapse

http://www.guardian.co.uk/business/2012/jun/04/goldman-sachs-boss-corzine-criticised

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<strong>Reuters</strong>

The trustee liquidating the collapsed MF Global on Monday issued a blistering report about how former chief executive Jon Corzine – a former New Jersey governor and now the boss of Goldman Sachs – ran the global financial derivatives broker and said there could be civil claims against top executives for breach of duties to customers.

In a written report to the US bankruptcy court in Manhattan, trustee James Giddens said liquidity at the commodities firm had been a concern long before MF Global tumbled into bankruptcy last October.

Before and throughout Corzine's tenure at MF Global "systems and tools that would enable accurate monitoring of liquidity were never implemented," Giddens concluded.

The report provides an update on Giddens' efforts to recover money for customers who lost funds when MF Global collapsed. Giddens has estimated that about $1.6bn (£1bn) disappeared from customer accounts when the company improperly mixed client funds with its own money.

Giddens had said before that he might file claims against certain executives, but has not named them. Monday's report identifies Corzine, as well as former chief financial officer Henri Steenkamp and former assistant treasurer Edith O'Brien, as possible targets for civil claims.

Corzine had no immediate comment. Lawyers for Steenkamp and O'Brien were also not immediately available.

Giddens also said he was prepared to launch lawsuits against JPMorgan Chase & Co, one of MF Global's main banks, if it was unable to reach a settlement within 60 days. That dispute centres on claims over whether the bank played a role in the disappearance of customer funds just before MF collapsed.

JPMorgan has already returned about $89m in customer funds and $518m in general MF Global assets, Giddens' report said. Officials from JPMorgan were not immediately available for comment.

The report also revealed that Giddens is investigating the actions of Bank of New York Mellon Corp in the week leading up to MF Global's collapse. So far, the bank has cooperated with the investigation, Giddens said.

The trustee said he would probably not pursue legal claims against customers.