Pool photo by Andrew HarrerJon S. Corzine, the former chief of MF Global.Jon S. Corzine could be the Groucho Marx of Wall Street.
The comedian vowed to avoid “any club that would accept me as one of its members.” Mr. Corzine, the former Democratic senator who ran MF Global until it collapsed in 2011, faced expulsion from a group to which he did not even belong.
The National Futures Association, the futures industry’s self-regulatory group, convened on Thursday to consider a lifetime ban of Mr. Corzine. Two of the group’s newest board members championed the plan as retribution for Mr. Corzine’s role in the demise of MF Global, which improperly took $1.6 billion from its customers before filing for bankruptcy.
If a majority of the board members voted yes, the group would have moved to hold a hearing over Mr. Corzine’s status before enacting the ban.
But when the board emerged from its meeting late on Thursday, the group issued a cryptic statement suggesting that Mr. Corzine could not be so easily ostracized because of, well, a small flaw in the plan: “Mr. Corzine is not currently a member of N.F.A.,” the board’s chairman declared in the statement.
Actually, the chairman noted in the statement, there was more than one problem. Any action against Mr. Corzine could have complicated a contining federal investigation into MF Global’s misuse of the customer cash.
“N.F.A.’s board understands that there are ongoing investigations concerning Mr. Corzine’s activities at MF Global and does not wish to take any action that could interfere with those investigations,” the chairman, Christopher Hehmeyer, said in the statement.
Still, Mr. Corzine is not necessarily free of any future wrath from the group.
“Once the appropriate agencies have completed their investigations, N.F.A. has the authority to bring disciplinary action against Mr. Corzine for violations of any N.F.A. rules that occurred while he was a member,” Mr. Hehmeyer said. (He was, presumably, a member when he ran MF Global, once one of the major players in the futures industry.) “The sanctions for disciplinary actions could include a lifetime ban and significant monetary fines,” he explained.
The action, or lack thereof, dealt a blow to the plan by the group’s two new directors, James Koutoulas and John Roe. They had both won spots on the association’s board after campaigning on a pledge to oust Mr. Corzine from their club. The two traders rose to prominence in 2011 as advocates for MF Global customers, forming a nonprofit organization and making the rounds of newspapers and CNBC.
Mr. Koutoulas declined to comment on Thursday, citing the board’s confidentiality policy.
His plan to expel Mr. Corzine grew from mounting frustration over the slowly developing federal investigation into MF Global. After more than a year of investigating Mr. Corzine, regulators and criminal investigators have not filed any charges, feeding concerns that Mr. Corzine will escape unscathed.
A ban from the futures association would have amounted to little more than a wrist slap to someone like Mr. Corzine, who once ran Goldman Sachs and served as a senator from New Jersey. Still, the move would have complicated any future plans he might have to open a trading firm. And if Mr. Corzine decides to one day rejoin the industry, he could face an unfriendly welcome.
The group on Thursday vowed that he “will not be granted membership unless N.F.A., after completing its fitness investigation, resolves” concerns about his ability to run a futures firm.
Mr. Corzine, perhaps following in Groucho Marx’s footsteps, might just steer clear.