Regulator set to weigh lifetime futures-trading ban for Corzine | NY Post

    This article originally appeared in the February 20, 2013 edition of the New York Post.  To view the original, click here.

    By Kaja Whitehouse

    The future is murky for former NJ governor and fallen financial titan Jon Corzine.

    Two directors of the National Futures Association will move tomorrow to ban Corzine from the multibillion-dollar futures trading industry in light of the scandalous collapse of MF Global — the commodity futures brokerage firm Corzine once headed.

    If the motion is approved, NFA would hold hearings to determine whether Corzine, MF’s former CEO, deserves a “lifetime ban” from the industry.

    Such a ban could hinder his reported plans to launch a hedge fund.

    He [Corzine] doesn’t need to be near anyone’s money ever again in the futures space, and we want to make sure of it,” John Roe, an author of the proposed ban, told The Post.

    Roe and James Koutoulas, who helped recover money for MF’s jilted customers, plan to present the proposed ban as their first action as NFA directors. Both were elected in January.

    MF’s 2011 downfall led to regulatory probes and hearings on Capitol Hill after it was discovered that Corzine’s company improperly tapped $1.6 billion in customers’ funds leading up to its bankruptcy filing.

    The shortfall also triggered a Justice Department probe — although no charges have been brought.

    Roe and Koutoulas’ five-page proposal asks that the board, which meets in Chicago tomorrow afternoon, direct NFA to set up a panel to evaluate whether Corzine violated the agency’s rules by failing to supervise MF employees and through sloppy record-keeping, sources said.

    The bankruptcy trustee empowered to recover the missing loot has cited “lack of sufficient monitoring and systems” for the shortfall.

    As the industry’s self-regulatory agency, NFA controls which individuals and firms can deal in futures.

    An NFA spokeswoman and Christopher Hehmeyer, chairman of NFA’s board, declined to comment.

    Corzine, who declined to comment on the proposed ban, is reportedly looking to set up a hedge fund. An NFA ban would limit his ability to trade futures in any fund with outside investors, experts said.

    It could also hinder his ability to raise money from pension funds and other large investors, experts said.

    Corzine could also be asked to fork over as much as $250,000 for each violation, according to NFA rules. The proposed ban cites nine rule violations, which could ding the disgraced Corzine for as much as $2.5 million, Koutoulas said.

    The money would go to the MF estate, which is on track to return to most of MF’s US customers 93 percent of their money.

    “The NFA has issued 134 lifetime bans since 2008,” Koutoulas said. “Corzine has done more damage to the industry than all of them combined.”