Jon Corzine Could Receive Lifetime Ban on Futures TradingVW Staff
Jon Corzine, former CEO of MF Global Holdings Ltd (PINK:MFGLQ), may see a glimpse in the next chapter of his professional future when he learns if he’s headed toward a possible lifetime ban by the National Futures Association (NFA).
On Wednesday, two NFA directors will present a motion to ban Corzine from the futures industry to the self-regulatory agency’s board of directors. If approved, a hearing will follow to determine if a lifetime ban is warranted. This would also affect Jon Corzine’s plans to start a hedge fund.
John Roe, one of the motion’s authors, told The New York Post, “He [Corzine] doesn’t need to be near anyone’s money ever again in the futures space, and we want to make sure of it.”
Roe and the other author, James Koutoulas, were elected as NFA directors last month. They assisted in recovering money for MF Global Holdings Ltd (PINK:MFGLQ)’s customers, which came from the company’s improper use of $1.6 billion of their funds. This ultimately led to bankruptcy.
The duo’s proposal to the board asks, in five pages, for the NFA to organize a panel and review whether Jon Corzine had violated agency rules by failing to supervise MF employees and keep organized records.
Through its powers as a self-regulatory agency, the NFA can control whether individuals and firms may “deal in futures,” according to the New York Post. Corzine could face fines as high as $250,000 for each of the potential nine rule violations listed in the ban, per NFA rules or a total of almost $2.5 million, according to Koutoulas.
In addition, should the disgraced CEO receive an NFA ban, this could limit his ability to not only trade futures for any fund with external investors but also affect raising money from pension funds and large funds.
This comes as Jon Corzine said back in August he planned to launch a hedge fund. At the time, SkyBridge Capital founder Anthony Scaramucci said he would provide funding.
He said the following, “Yes I trust Jon Corzine and I think if he starts a fund he will make money, and be very successful. We closed our seeding business, so I couldn’t seed him, but he is a person that I would have no problem being partners with. We have different politics, but that would make it even more interesting.”
Along with Jon Corzine’s fate in the hands of the NFA, the U.S. Department of Justice has also opened an investigation but there hasn’t been any charges.
There have not been any comments from NFA, Christopher Hehmeyer, chairman of NFA’s board and Corzine on this latest chapter in the MF Global collapse.