Jon Corzine, former CEO of MF Global Holdings, will pay $5 million to the Commodity Futures Trading Commission to settle charges that MF Global lost $1 billion in customer money while he ran the now-defunct firm.
As part of the settlement, Mr. Corzine must pay the penalty from his own money and not from any insurance coverage, plus he agreed to a lifetime ban from any futures operation, the CFTC said in a news release.
Also, Edith O'Brien, MF Global's former assistant treasurer, will pay a $500,000 penalty for “aiding and abetting” MF Global's violations, the CFTC said.
The settlement was approved by U.S. District Court Judge Victor Marrero in New York. The CFTC in 2013 had filed a lawsuit against Mr. Corzine and Ms. O'Brien over the MF Global losses. Mr. Corzine was accused of failing to monitor the conduct of MF Global employees while the firm lost customer assets from August through October 2011, when the company filed for Chapter 11 bankruptcy protection. The company had transferred funds from customer accounts to pay for operations at MF Global, which the CFTC said was experiencing a liquidity crisis.
Mr. Corzine was not directly linked to the lost assets, the CFTC said, but Ms. O'Brien was accused of approving the asset transfers from customer accounts.
The CFTC settlement is the latest involving Mr. Corzine and MF Global. In July 2015, he along with several former MF Global directors and officers agreed to pay $64.5 million to settle a lawsuit filed by investors, including the $68 billion Virginia Retirement System, Richmond, and the Canadian province of Alberta, which alleged the executives made false statements in company filings about MF Global's controls and liquidity.
In April 2015, PricewaterhouseCoopers agreed to pay $65 million to rid itself of claims tied to botched audits. Underwriters including Citigroup Global Markets, Deutsche Bank Securities and Goldman Sachs separately agreed in May 2015 to pay investors $74 million.
Mr. Marrero approved those previous settlements as well.
Mr. Corzine and the other defendants denied any wrongdoing in agreeing to the settlements.
“I am pleased to have reached this settlement to resolve the CFTC's claims,” Mr. Corzine said in a statement.