Former New Jersey Governor Jon Corzine had little trouble finding $500,000 in his role as a top Obama campaign bundler, but locating the missing $1.2 billion in customer funds he oversaw as the head of MF Global funds is proving far more difficult–impossible even, reports the Wall Street Journal.
A person close to the investigation told The Journal that a “significant amount” of customers’ money appears to have “vaporized”:
Nearly three months after MF Global Holdings Ltd. collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation.
As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a “significant amount” of the money could have “vaporized” as a result of chaotic trading at MF Global during the week before the company’s Oct. 31 bankruptcy filing, said a person close to the investigation.
Many officials now believe certain employees at MF Global dipped into the “customer segregated account” that the New York company was supposed to keep separate from its own assets–and then used the money to meet demands for more collateral or to unfreeze assets at banks and other counterparties as they grew more concerned about their financial exposure to MF Global.
During a House hearing in December, Mr. Corzine said he “doesn’t know” where the $1.2 billion went or is.
[youtube 3UOmOSSwJjw nolink]
On Thursday, the House Financial Services subcommittee will investigate MF Global’s “risk-management practices and the role of credit-rating firms in the collapse.”