In the complaint against former MF Global CEO Jon Corzine filed in federal court on Thursday, the U.S. Commodity Futures Trading Commission depicted the former New Jersey Governor as a negligent leader who should never be allowed back into the financial industry because he did not try hard enough to stop his employees from raiding the brokerage’s customer accounts to cover its own trading losses.
The suit stops short of an important accusation, however: intent. Though Corzine and MF Global’s former assistant treasurer Edith O’Brien should have known better, according to the CFTC, they did not mean to make the inappropriate money transfers or to lie about them or try to cover them up.
“Mr. Corzine did nothing wrong, and we look forward to vindicating him in court,” said Corzine’s lawyer, Andrew Levander, in a statement emailed to reporters shortly after the CFTC unveiled the suit.
Even though a section of the complaint details the false statements MF Global made to the CFTC, its regulator, about how much money was in the segregated customer accounts (the firm reported an excess on nights when there was really a deficit of hundreds of millions of dollars), the CFTC is not accusing anyone of deliberately lying.
This lack of intent is one of the main reasons, experts say, why no criminal charges were ever filed against Corzine or any other MF Global employees despite the misappropriation of nearly $1 billion in customer money.