The moment the Occupy Wall Street protests start to simmer down, our great Captains of Finance shoot themselves in the foot again.
The latest reports say the FBI plans to probe the shortfall in client funds.
There is some confusion about whether the reported $700m in missing client funds still exists. An MF lawyer said in court today: “to the best knowledge of management, there is no shortfall.” But the lawyer was representing the brokerage, not the parent company.
At best it was an accounting error but the CME has already cast a guilty verdict.
Less than three months ago, Corzine was angling for Timothy Geithner’s job of Treasury Secretary. If he hadn’t support Hilary Clinton early in the Presidential race, he may have won the job after Obama was elected.
The real scandal will be if Corzine and two other top executives get the roughly $9 million in severance they each are entitled to. Experts say bankruptcy law is tricky in this regard.
The real fallout will be on the regulation side where Wall Street has been aggressively lobbying to water down the Volcker Rule and other post-credit-crisis efforts. Bloomberg has a nice run-down of the situation.
The anti-regulation lobbyists sound foolish now but everything sounds good to a politician when his pockets are stuffed with money in an election year.
