Feature

Corzine’s downfall foretold

Corzine led Goldman into “its first major financial morass,” in 1998, overseeing trading positions that led to huge losses and delayed the firm’s IPO, said Charles Gasparino at TheDailyBeast.com.

Charles Gasparino
TheDailyBeast.com

Jon Corzine is “erudite, down to earth, and well-meaning,” said Charles Gasparino. But a good businessman he’s not. That’s why it’s no surprise that MF Global, the brokerage firm the former New Jersey governor has headed since 2010, filed for bankruptcy this week. If you look closely, Corzine’s record as ex-CEO of Goldman Sachs “has failure written all over it.” He led Goldman into “its first major financial morass,” in 1998, overseeing trading positions that led to huge losses and delayed the firm’s IPO. His lousy risk management got him “ousted by his second-in-command, Hank Paulson.”

After a decade in politics, Corzine set out to remake MF Global in Goldman’s image, arguing that “a huge loophole in the Dodd-Frank provisions” allowed midsize players to make the kind of risky trades bigger firms no longer could. He ended up overseeing “one of the worst bets in modern financial history,” gambling big on European government debt. Yet I doubt Corzine’s career is over. After all, “Wall Street is one of the few places where failure of great magnitude is an accepted way of life.”

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