Jon Corzine is about to dominate headlines again, but for all the wrong reasons.

Federal regulators are expected to sue the former New Jersey governor and liberal superstar, saying he should have detected $1.2 billion in customer funds that mysteriously vanished from MF Global, the investment firm he ran that went bankrupt in 2011. Since the Commodity Futures Trading Commission isn't interested in settling with the disgraced politician, Corzine faces the prospect of a lengthy legal battle, millions of dollars in fines and a prohibition on Wall Street trading.

It's a remarkable fall from grace for the chief executive whose name was once floated as a potential presidential candidate.Corzine's rags-to-riches story had all the makings of a Hollywood movie: The boy who grew up on a small-town farm and eventually became the chairman of Goldman Sachs, a governor and a U.S. senator. On top of an impressive resume, Corzine amassed a net worth of hundreds of millions of dollars.

Now former allies of the New Jersey Democrat are left puzzling what went wrong.

"It's one of the more staggering downfalls I've ever witnessed -- for anybody," a New York-based veteran Democratic strategist said. "This isn't just from the penthouse to the outhouse -- he's wishing for the outhouse."

When Republican Chris Christie won New Jersey's gubernatorial election, denying Corzine's bid for a second term in 2009, his consolation prize was another lucrative stint on Wall Street at MF Global. However, Corzine soon returned to Capitol Hill -- this time as the poster child for a financial sector run amok, subpoenaed to explain the downfall of the firm to incredulous lawmakers.

The imminent lawsuit serves as a new low for the 66-year-old, whose surrogates are scrambling to protect Corzine's already-damaged reputation.

"The CFTC apparently intends to bring what would be an unprecedented and meritless civil enforcement action against Mr. Corzine," said Steven Goldberg, a spokesman for the former governor. "The CFTC has not alleged that Mr. Corzine engaged in any wrongdoing or directed anyone to engage in any wrongdoing with regard to customer funds."

Regulators aren't arguing that Corzine was directly responsible for one of the largest bankruptcies in U.S. history but that he failed to do anything to stop the historic hemorrhaging of investors' money.

For a man whose clout was built on extensive Wall Street and Washington connections -- and deep institutional knowledge in both settings -- such pleas of ignorance are difficult for former supporters to believe.

"It's almost like piling on at this point," the New York Democratic consultant said of Corzine's situation. "I mean, what else could possibly go wrong for him?"