JPMorgan, by mid-afternoon of Oct. 28, contacted Corzine to request confirmation in writing that the transferred money was made up only of the firm’s funds, Diane Genova, a deputy general counsel for the bank, said in her prepared remarks.
“Mr. Corzine said he understood the request and would have someone in his organization review it,” Genova said. The bank then “e-mailed a proposed draft letter to Mr. Corzine.”
Corzine, 64, told lawmakers last year the firm’s back- office staff had “explicitly” informed him that the $175 million transfer made before the bankruptcy filing was legal.
“I never gave any instruction to misuse customer funds, I never intended anyone at MF Global to misuse customer funds and I don’t believe that anything I said could reasonably have been interpreted as an instruction to misuse customer funds,” Corzine told lawmakers in December.
JPMorgan dealt with Ferber and Dennis Klejna, MF Global’s deputy general counsel, on Oct. 28 and Oct. 29 as the bank sought to secure the letter. On Oct. 28, Klejna told JPMorgan the transfer complied with federal rules and “represented excess funds belonging to MF Global,” Genova said.
Klejna “intends to fully cooperate with the government investigation of MF Global and feels it would be premature to respond to any press inquiries at this time,” Helen Kim, Klejna’s lawyer and a partner at Katten Muchin Rosenman LLP, said in an e-mail.
The next afternoon, Ferber told the firm the transfer “represented a withdrawal of MF Global’s own funds held in a customer segregated account, and that we therefore did not need to be concerned,” Genova said. After “some further discussion,” Ferber told JPMorgan’s representatives she would arrange to get a revised letter signed, Genova said.
After rejecting the first two drafts of the JPMorgan letter, Ferber said a third draft focused specifically on the two transfers was “in satisfactory form.” She then turned the matter over to a colleague and doesn’t recall further involvement, she said in her prepared remarks.
The letter was never returned to JPMorgan, according to Genova.
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.