When the Commodity Futures Trading Commission (CFTC) charged Jon Corzine in relation to the demise of MF Global, there was renewed interest of the case in the financial media. Unfortunately many of the people reporting on the charges came in cold and did not fully understand what occurred and the extent of the damage.

Since it was becoming clear that most of the victims would receive 100% of their money back perhaps it didn’t see so serious to the uninitiated. They did not seem to understand that the damage done by the MF Global bankruptcy, which put many people out of business and threatened an entire industry by violating the sanctity of customer segregated funds. It forced the closure of commodity trading advisors and introducing brokers. Prevented farmers from buying seed and equipment and ranchers from restocking herds.

Don’t pay your mortgage for two years and see if you can just pay the face value of what you are in arears without penalty—if you hadn’t already been foreclosed on.

Worse yet, some in the media painted it as a story of how responsible you should hold a chief executive “for the conduct of an employee fairly well removed from his direct supervision.” (Evidence shows that Corzine personally directed said employee to transfer funds from the segregated account). This showed a complete lack of knowledge of the situation. We have noted here many times that it was Mr. Corzine that directed the trading the put MF Global at risk. He was warned about it by risk managers. When he did not relent and only increased his position, the risk manager was gone. Corzine fought regulators over the margin that should be required. Corzine lobbied the CFTC to keep in place rules that allowed him to access non-US customer funds (part 30) to back his proprietary trading.

We logically concluded from this that Corzine was the person who lacked supervision.

We have also pointed out how it was disturbing that every time there appeared to be new developments in the  MF Global debacle investigation, stories appeared in major news outlets citing unnamed sources that there would be no criminal charges brought by the justice department. The worst of these was a story in the New York Times that not only suggested there would be no criminal charges but that sources close to Mr. Corzine indicated he was contemplating starting up his own hedge fund. To include that is an indication the authors did not understand the gravity of what occurred at MF Global.

This seemed incredulous to us.

But once again—with the CFTC case still pending, that would require Corzine to pay restitution and fines as well as banning him from participating in any regulated futures markets—a story is floated, this time in the Wall Street Journal,  that Mr. Corzine is contemplating starting up a fund.

This appears to be a transparent attempt by the Corzine camp to downplay the seriousness of the charges Corzine is facing, and the destruction his actions wrought.