How dumb does Jon Corzine think we are?
The WSJ has this hanky puller on his struggles to move on from the wreckage of MF Global:
And the 65-year-old Mr. Corzine is struggling to figure out what comes next for himself, according to friends and former coworkers.
I can hardly type through the sobs.
Stand at LaSalle and Jackson or 10-30 S. Wacker and see how much sympathy you get, Jon. I’d bring bodyguards.
But here’s where Corzine insults our collective intelligence:
Allegations from shareholders and bondholders that he hid problems or committed fraud at the brokerage firm make “no sense” because he had “no motive,” Mr. Corzine’s lawyers said in a court filing, citing his ownership of 441,960 shares in MF Global. The stake includes 50,000 shares bought shortly before the bankruptcy filing.
Uhm, equityholders in firms teetering on insolvency, or which are insolvent, have a huge incentive to hide problems or commit fraud or take huge risks. It’s called gambling for resurrection. Fraud or concealment permit the firm to survive-and maybe it will get lucky. If things get worse-that hurts only the bondholders, who lose more when the firm loses even more value. The stock was already worthless. Ditto with taking on risk: if the insolvent firm’s bet turns bad, that just deepens the bondholders’ losses without hurting the equity holder, but if the bet turns out well the equity profits disproportionately.
Most frauds and concealment of losses are carried out by shareholders. These are ways of stealing from bondholders.
The only thing that makes no sense is Corzine saying he had no motive. And he expects us to believe that.
Corzine’s other defense is that MF Global’s failure was due in large part to its completely deficient accounting and control systems. But that throws him into the Sarbanes-Oxley fire, for he signed off on the soundness of those systems.
Corzine is obviously ginning up the PR machine to try to build sympathy and lay the groundwork for a comeback. Don’t do the world any favors, Jon. You’ve done quite enough already.
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