* MF Global administrator eyes $3 billion damages from PwC
* Corzine was New Jersey governor, Goldman co-chairman
(Adds more Corzine testimony)
By Jonathan Stempel
NEW YORK, March 10 Former New Jersey Governor
Jon Corzine on Friday resisted accepting blame for the October
2011 collapse of his brokerage MF Global Holdings Ltd,
repeatedly stressing his reliance on judgments by the auditor
Corzine was testifying for a second day for MF Global's
bankruptcy administrator in federal court in Manhattan in its $3
billion malpractice case against PwC.
Under cross-examination from PwC's lawyer, Corzine rejected
suggestions that the collapse stemmed not from PwC's negligence,
but from MF Global's own business decisions.
These included Corzine's $6.3 billion wager on sovereign
debt from five European countries, which spooked nervous markets
after a recent near-shutdown of the U.S. government.
It also included a delay in Corzine's plan to transform MF
Global into a full-service broker-dealer that led to a large,
surprise tax loss for the futures and commodities brokerage.
"I relied on my team, and on the advice they were receiving
and I was receiving, from our outside public accountants,"
While never blaming PwC directly, Corzine had testified on
Thursday that he trusted PwC because of its strong reputation,
and had no reason to believe MF Global's accounting was wrong.
He said PwC's decision to change its advice on accounting
for "deferred tax assets," and MF Global's decision to reveal
more than PwC had required about the European debt to calm
jittery markets, prompted "confusion" and a "loss of confidence
PwC's lawyer James Cusick on Friday tried to show through
emails and other evidence that the auditor was not at fault,
including for the European debt financed through
"They didn't advise you on whether to embark on this Euro
RTM strategy?" Cusick asked.
"They did not," Corzine replied.
"These were all business decisions, that belonged to
yourself, your management team and your board of directors?"
Cusick got Corzine to agree that volatile capital markets
and some other concerns flagged in a Moody's Investors Service
downgrade of MF Global a week before the bankruptcy were, in the
lawyer's words, "not PricewaterhouseCoopers' fault."
Corzine has been cooperating with the administrator, and
testified that in his five or six recent meetings with its
lawyers it became "pretty clear the types of themes" to be
discussed at trial, including "trust and confidence."
On Monday, Corzine is expected to face more questions from
Cusick, followed by questions from the administrator's lawyer,
Corzine, 70, has kept a low profile since testifying in
December 2011 before Congress about MF Global.
In January, he agreed to a $5 million fine to settle a U.S.
Commodity Futures Trading Commission lawsuit over MF Global,
without admitting wrongdoing.
PwC in 2015 settled with MF Global investors for $65
million, and denied wrongdoing.
The expected five-week trial began on Tuesday.
The case is MF Global Holdings Ltd as Plan Administrator v
PricewaterhouseCoopers LLP, U.S. District Court, Southern
District of New York, No. 14-02197.
(Reporting by Jonathan Stempel in New York; Editing by Tom