(Recasts, adds details of settlement, comments, dateline,
By Jonathan Stempel
NEW YORK Jan 5 Jon Corzine, former New Jersey
governor and Goldman Sachs co-chairman, will pay a $5
million civil fine to settle a U.S. regulator's lawsuit over the
2011 collapse of his commodity brokerage, MF Global Holdings
Thursday's accord with the U.S. Commodity Futures Trading
Commission resolves the last piece of litigation against Corzine
over MF Global's rapid descent into bankruptcy on Oct. 31, 2011,
as an estimated $1.6 billion of customer money went missing.
The agreement, which has been approved by a federal judge,
bars Corzine from ever working for a futures commission merchant
or registering with the CFTC. He also cannot ask insurers to
cover the fine.
"I am pleased to have reached this settlement," Corzine, who
turned 70 on Jan. 1, said in a statement. "As the CEO of MF
Global in 2011, I have accepted responsibility for its failure,
and I deeply regret the impact it had on customers, employees,
shareholders and others."
Andrew Levander, Corzine's lawyer, noted that none of the
criminal and civil probes into MF Global's demise led to charges
that Corzine engaged in intentional misconduct or fraud.
In a related settlement, Edith O'Brien, MF Global's former
assistant treasurer, agreed to pay a $500,000 civil fine and
accept an 18-month industry ban to resolve claims that she
"aided and abetted" the misuse of customer funds.
O'Brien's lawyer, Christopher Barber, declined to comment.
The CFTC said MF Global improperly used nearly $1 billion of
customer funds to shore up liquidity during the last week of
October 2011, rather than keep the funds separate.
This commingling occurred as margin calls, credit rating
downgrades and Corzine's big wager on European sovereign debt
left customers and investors increasingly worried about the New
York-based company's survival.
The CFTC said Corzine failed to properly supervise employees
handling customer funds, while O'Brien authorized the illegal
transfer of customer funds to MF Global accounts as the specter
of bankruptcy loomed.
Customers were fully repaid in 2014.
Corzine and other former MF Global executives last year
reached a $132 million settlement with a trustee liquidating the
company on behalf of creditors.
A year earlier, executives reached a $64.5 million
settlement of separate investor litigation.
Portions of the earlier payouts were covered by insurance.
Corzine, a Democrat, is also a former U.S. senator, and now
manages his own money.
He said he plans to focus on "issues that have always been
important in my life: my family, community and philanthropic
causes, and markets."
(Reporting by Jonathan Stempel in New York; Editing by