MF Global Failure Underscores Global Investing Risks [AUDIO]
The disasterous fall of former Governor Jon Corzine’s securities firm, MF Global, demonstrates the precarious nature of the world economy for investors.
MF Global invested heavily in European debt, and the European situation remains very murky, with Greece still tetering on the brink of default. Corzine had bet big on European debt. It revived memories of the 2008 banking crisis and the ruin of the much bigger Lehman.
Rutgers-Camden global economy expert Mitchell Koza says in the Eurozone, some of the members are a lot less stable than others. He says Greece, Portugal and Spain and to some degree Italy are at what Koza calls, “a much different level of development than France and Germany and the U-K and the Nordic Countries.”
MF Global has admitted to Federal regulators that it cannot find about a Billion dollars in customer funds, further complicating the situation for Corzine and two other principals in the firm. Regulators and the FBI are investigating. As Corzine, 64, stepped down as chairman and CEO, he said he felt “great sadness about what has transpired at MF Global.”
On Friday, The criminal investigation of MF Global appeared to be moving forward. Corzine hired criminal defense lawyer Andrew Levander of Dechert LLP, according to a person familiar with the situation. The news that he retained a lawyer was reported earlier by The Wall Street Journal.