Federal regulators on Thursday announced that former New Jersey Gov. Jon Corzine would pay $5 million to settle an inquiry related to the failure of his hedge fund, MF Global, in 2011.
Corzine, once a prominent Democrat and the former CEO of Goldman Sachs, has to pay the fine out of his own pocket to resolve the long-running probe.
The Commodity Futures Trading Commission, the independent agency responsible for overseeing derivatives markets, found that MF Global had used $1 billion in customer funds illegally to pay for its business operations and pay off creditors. That money was lost when the firm collapsed.
Corzine was liable because he controlled the company, the commission wrote in a statement, although it only accused another MF Global executive, a treasurer, for aiding and abetting the company’s illegal treatment of customers.
CFTC enforcement director Aitan Goelman said the settlement “demonstrates the importance that the commission attaches to customer protection, which has long been a hallmark of our mission.”
In addition to paying the fine, Corzine is barred from trading futures.
