Official: MF Global admitted using client money

Bankruptcy might be just the beginning of troubles for Jon Corzine's securities firm

By Daniel Wagner
November 1, 2011 10:00PM (UTC)
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Former New Jersey Gov. Jon S. Corzine reflects on his four year term in office during an interview with The Associated Press at his home in Hoboken, N.J, this past January. (AP/Rich Schultz)

WASHINGTON (AP) — A federal official says MF Global, the securities firm led by Jon Corzine, admitted to using clients' money as its financial troubles mounted.

An MF Global executive admitted that to federal regulators in a phone call early Monday after regulators discovered money missing from clients' accounts, according to an official familiar with the conversation.

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The official spoke on condition of anonymity because he was not authorized to discuss a preliminary investigation by federal regulators.

Government rules require securities firms to keep clients' money and company money in separate accounts. Violating them could result in civil penalties.

MF Global, which filed for bankruptcy protection on Monday, faced a cash crunch following multibillion-dollar bets on European sovereign debt.

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Corzine ran Goldman Sachs Group Inc., and later was governor of New Jersey.


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