Jon Corzine Sued by Farmers over Missing Millions

Farmers in Montana are suing former New Jersey governor and MF Global CEO Jon Corzine, claiming that the failed company stole millions from their personal accounts to pay off its outrageous debts.

They also claim that Corzine’s “single-minded obsession” with making MF Global a household name on Wall Street led to the firm’s demise.

Actually, Corzine succeeded in making MF Global famous, but for all the wrong reasons.

MF Global’s client base included 38,000 wheat farmers and cattle ranchers who hedged their crop prices by placing millions into MF Global accounts. Those accounts were to have been “segregated and secure,” according to the federal class action lawsuit, meaning that the company could not touch those funds.

The lawsuit, filed on behalf of all 38,000 clients, alleges that when MF Global made a string of bad investments, mostly in European debt, it began “siphoning funds withdrawn from segregated client accounts” to cover its debts.

“This is a suit by the real victims of MF Global,” said plaintiff’s attorney Mark Baker of the law firm Anderson, Baker & Swanson. “The missing funds were not investments in MF Global, or loans to MF Global, but rather the customer’s own money as collateral to guaranty their contracts. They were not to be used by others – let alone their own broker – to speculate on risky and exotic securities.”

Corzine ran the company when it filed for Chapter 11 on October 31 , the eighth-largest bankruptcy filing in the history of the U.S.   Corzine resigned as CEO a few days later.

At first, regulators believed that about $600 million in customer funds had gone missing, but later increased their estimate to $1.2 billion.  Corzine says he has “no idea” where the funds went.

Only 60 percent of customer funds has been found so far.