You don't need to invoke securities or commodities law on segregation or re-hypothecation.
You don't need to show that the Corzine-clause 6 1/4's of '16 were issued fraudulently due to misrepresentations in the SEC filings.
You don't need to fall back on Sarbanes-Oxley sign-offs that adequate controls were in place.
You don't need to show that this was a corrupt organization, although RICO's treble damages are interesting.
All you have to do is figure out vicarious liability and the other agency theories and have some underling be able prove that the boss knew.
You don't go to jail for being CEO. You go to jail for being a crooked CEO.
...Corzine knew of $175 million in loans involving customer segregated funds at the bankrupt broker, said Terrence Duffy, executive chairman at CME Group Inc. Auditors at CME, which had authority to oversee MF Global, learned from an employee of the brokerage that Corzine knew about the loans involving a European affiliate, Duffy told committee members.From ZeroHedge:
Duffy did not say whether Corzine learned of the loans in advance of the funds being moved. He also did not say whether the loans were a legitimate use of customer accounts.
For their part, Corzine and Abelow said that officials below them in MF Global’s hierarchy might know more than they do about the missing funds.
Corzine suggested that investigators should look at the company’s treasury office, which was in charge of ensuring that customer funds were used in accordance with federal regulations.
“The people who headed that are probably closest to the scene of the action,” he said.
Corzine named Christine Serwinski, the company’s chief financial officer for North America, as someone in charge of that department although he said she had been on vacation during the final days of MF Global. Roberts identified Christy Vavra as the head of treasury operations at the firm. Abelow said the head of treasury operations ultimately reported to him.
Vavra and Serwinski did not respond to messages left at their home telephone numbers.... MORE
Presenting The Three Unscripted Sentences That May Have Cost Jon Corzine His Freedom
...Our auditors returned on Sunday, October 30th because we learned from the CFTC that the draft segregation report for Friday, October 28th, which had been provided to the CFTC that day, showed a $900 million dollar shortfall in segregation caused by an “accounting error.” Our auditors, working with the CFTC, devoted the rest of the day and night Sunday to find the so-called accounting error. No such error was ever found. Instead, at about 2 am Monday morning, MFG informed the CFTC and CME that customer money had been transferred out of segregation to firm accounts. After receiving this information CME remained at MF Global while MF Global attempted to identify funds that could be transferred into segregation to reduce or eliminate the discrepancy. A CME auditor also participated in a phone call with senior MF Global employees wherein one employee indicated that Mr. Corzine knew about the loans that had been made from the customer segregated accounts. CME Group has provided this information, the names of these individuals to the DOJ and CFTC who are investigating these matters. Transfers of customer funds for the benefit of the firm constitute serious violations of our rules and of the Commodity Exchange Act.... etc.
-CME executive chairman Terry Duffy