Jon Corzine Reportedly Shopped For French Chateau While MF Global Was On Verge Of Collapse

As MF Global inched towards collapse, CEO Jon Corzine pre-occupied himself with a few other things -- namely securing a chateau for him and his wife in the ritzy south of France.

At a party in Paris on October 15 -- just two weeks before MF Global filed for bankruptcy, costing more than 1,000 workers their jobs -- Corzine and his wife, Sharon Elghanayan, were discussing a house they planned to purchase in the south of France, according to an upcoming report in Vanity Fair.

"It's not in Cap Ferrat," one person at the party told Vanity Fair they recall Elghanayan saying in an effort to tone down the extravagance. Cap Ferrat is a coastal town in the south of France known for its lavish lifestyle.

Though Corzine, a former Goldman Sachs CEO, governor of New Jersey and Senator, was able to scrounge up the money for a possible chateau purchase, he's having a little bit more trouble tracking down MF Global clients' money, much of which is still missing. Shortly after the company filed for bankruptcy on October 31 over risky bets on European debt that went disastrously wrong, hundreds of millions worth of customers' money was discovered missing.

Corzine, who resigned in early November after the firm's collapse, told Congress of the lost client funds: "I simply do not know where the money is." The missing funds have attracted the attention of the FBI and federal prosecutors, according to Reuters.

Though shopping for a house presumably worth millions in France while your company is on the verge of bankruptcy may seem uniquely ridiculous, Corzine is not the first executive of a failing firm to spend lavishly. Indeed, it's happened multiple times in the new millenium. Ken Lay, the former CEO of Enron, sold the company's shares back to Enron to pay for luxuries like renting a private yacht, even as the energy giant was on the verge of collapse, according to a 2006 Reuters report.

During the financial crisis, executives at bailed-out American International Group reportedly spent $86,000 on a hunting trip even as they asked for billions more in bailout funds from the Federal Reserve, according to CBS News.

And Morgan Stanley spent tens of thousands of dollars on a send off for the company's departing chairman John Mack, even as the market has hammered the bank's stock price and some officials warned employees that they may not be getting bonuses this year, Fox Business reports.

A timeline of MF Global's collapse:

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• Lost Customer Funds Found

  James Giddens, the trustee overseeing the liquidation of MF Global, told the Senate Banking Committee in April that $1.6 billion worth of lost customer funds had been found and his analysis <a href="http://www.huffingtonpost.com/2012/04/25/mf-global-missing-customer-money-accounted-for_n_1452128.html?ref=business" target="_hplink">"is substantially concluded,"</a> CNNMoney reports.

• Jon Corzine Takes the Reins at MF Global

  In a big turning point for the brokerage firm, in 2010 MF Global Holdings hired Jon Corzine, a former chief executive at Goldman Sachs, former U.S. senator and former Governor of New Jersey. Corzine returned to the financial industry after losing his gubernatorial reelection bid to Chris Christie in 2009.

• Leveraged Bets on European Debt

  Jon Corzine made risky moves in his mission to turn MF Global into a big Wall Street player. After a period of aggressive trading didn't earn the profits Corzine had hoped for, the firm delved into the foreign debt market, making $6.3 billion worth of large and heavily leveraged bets on distressed sovereign debt in troubled European countries like Spain and Italy.

• Bankruptcy

  Europe's economy continued to melt. MF Global investors panicked when they caught wind of the billions in leveraged bets, and on Oct. 31 MF Global filed for bankruptcy. It was called the first American financial casualty of the European debt crisis.

• Federal Investigation

  During the firm's collapse, federal regulators discovered that $630 million in customer money couldn't be accounted for. A federal investigation ensued, and forensic accountants found the amount was actually closer to $1.2 billion. Experts suspected the client money was used inappropriately for company purposes.

• Lobbying

  The investigation shed light on Jon Corzine using his personal influence in Washington to lobby against restrictions on how firms can invest customer money.

• Corzine Resigns

  On Nov. 4, four days after the firm filed for bankruptcy, Jon Corzine voluntarily stepped down. He had not been accused of any wrongdoing.

• 'MF Global Rule'

  In early December federal regulators adopted the 'MF Global rule' to prevent other firms from using client funds to buy sovereign debt. Regulators restricted the transaction that allowed MF Global to borrow money from its own customers.

• Corzine Testifies Before Congress

  On Dec. 8 Jon Corzine testified before Congress on the missing money. Speaking to his former colleagues in the Senate, Corzine said he was "stunned" by the missing client funds. He offered an apology but said, "I simply do not know where the money is."

• Developing Case

  Corzine testified that he didn't know any customer money was missing until the day before the firm filed for bankruptcy. But a financial executive<a href="http://www.huffingtonpost.com/2011/12/13/jon-corzine-testimony-_n_1146192.html?ref=business " target="_hplink"> claimed</a> Crozine "was aware" of a $175 million transfer from customer accounts to a European affiliate of the firm.

• $200 Million Transfer Of Customer Funds

  Ex-CEO Jon Corzine allegedly authorized the transfer of around $200 million in customer funds to pay down an overdraft just days before the firm collapsed, <a href="http://www.bloomberg.com/news/2012-03-24/mf-global-s-corzine-ordered-funds-moved-to-jp-morgan-memo-says.html" target="_hplink"><em>Bloomberg</em></a> reported in February.

• Pleading The Fifth

  MF Global executives <a href="http://www.huffingtonpost.com/2012/03/28/mf-global-hearing-executives-millions-customer-funds_n_1386701.html" target="_hplink">denied having significant knowledge of an authorized transfer of around $200 million</a> in customer funds to avoid an overdraft. Edith O'Brien, an executive who wrote an email about the transfer at the time, <a href="http://www.huffingtonpost.com/2012/03/28/former-mf-global-executive-edith-obrien-5th-amendment_n_1386210.html" target="_hplink">invoked the Fifth Amendment</a>.

Comments

[El Jefe]

03:24 PM on 02/21/2012

So why are people still backing the likes of Newt, Romney, Santorum, and Obama? they have repeatedly created relationships with 1%-ers.

[njterry7]

01:07 AM on 01/21/2012

What ! no handcuffs yet

[truckingfarmer]

06:08 PM on 01/20/2012

In spite of what the propaganda arm of the DNC would have America believe, there are more rich 1%er's democrats in Congress than republicans. Corzine is a prime example of these rich hypocrites who would love to foster class warfare in order to disparage republicans. Corzine, Obama's once butt buddy, is soon to be found under the Obama's campaign bus when he is indicted for theft of investor funds. Chris Dodd and Barney Frank should also be indicted for their economic crimes. Maybe Corzine can stay at Dodd's Irish castle paid for with Freddy and Fanny funds/bribes.

[woody7]

02:03 PM on 01/18/2012

It was Obama's fault cause he is a Dem, seriously I heard it on Fox, this post is not considered to be factual....................................../

[El Jefe]

03:23 PM on 02/21/2012

This isn't a partisan issue. There should be no in-fighting. We must return to the Constitution if we are to survive the next decade

[WashingtonDCsucks]

09:29 PM on 01/12/2012

Parasites don't have morality so they don't care about minor things like 1000 workers jobs.

Sometimes it's hard to tell the parasites from the psychos and sometimes they are one and the same.

[ray77]

06:31 PM on 01/11/2012

They need to start throwing these people in jail, because when people finally get fed up and the Sh*t hits the fan, it won't be pretty! I don't know if those in their ivory towers have an inkling of what going on, but pretty soon, we won't have to worry about outside terrorists, they will have created them right here! They will see themselves as patriots, but the powers that be will label them terrorists!

[ConnieDr]

04:05 PM on 01/11/2012

Gee wonder where that money went?

[Veri]

06:28 PM on 01/08/2012

Why do we keep funding the lifestyles of the rich and corrupt? Is America truly that stupid?

[JTWallace]

11:19 AM on 01/13/2012

Yup...........it kept the Kennedys around until they dropped. It keeps politicians both left and right in the lifestyle they've become accustomed to and we see it as in the above photos of those who acquired the meat of their wealth while holding office. BRING ON TERM LIMITS!

[REDSTATEREFUGEE]

05:01 PM on 01/08/2012

Ahhhh! These wild and wacky One Percenters !!

[danceswithdata]

04:21 PM on 01/08/2012

I was reflecting the other day on the terrible sin of omission that this country continues to commit: That no public figures, including and especially politicians are ever prosecuted for their crimes in a court of law. I'm sure there have been a few exceptions, e.g. Bernie Eggers, Jeffrey Skilling, and almost-Ken Lay, until he went to Aspen to feign his death, but mostly these perpetrators are allowed off the hook with a wrist slap and a wink. They have created a situation of absolute immunity for themselves by making it into an act of Certain Political Suicide if anyone dares show s/he has the balls to go after one of these public criminals.

[mjdloc157]

01:45 PM on 01/08/2012

Biden: "the man I reccomended to the president to call when the economy was in trouble" Obama" at Corzines reelection fundraiser: "John is a guy NJ can trust ,A great American, lets put him back in the govenors seat" here is a true liberal icon, John Corzine

[mjdloc157]

01:41 PM on 01/08/2012

He should have called John Kerry, He owns one on the coast. maybe he had some leads. Probaly wanted it to hide money, take whats laying in Obamas and Bidens campaign stash, the money can be found, but when the president and vice president owe you you can get away with stealing 1.2 billion, only in the era of Obama

[Kazzim Zongo]

10:06 PM on 01/07/2012

I'll believe the President is serious about finance reform when Corzine is behind bars.

[Flight]

11:45 AM on 01/07/2012

Perhaps Chateau de Rahway would better suit him.

[jerzygurl]

04:47 AM on 01/08/2012

But do they serve the meals with Grey Poupon?

[rosiebag]

09:27 AM on 01/07/2012

Obama returned his donation $ to corzine, crime pays. He should have given that $ to the farmers that were ripped off. When will this thief get what he has comming!