Wednesday will mark four months since MF Global (OTC: MFGLQ) filed bankruptcy. What has happened to the four executives at the heart of this tragic episode?
Jon Corzine, former CEO
MF Global's former CEO needs no introduction. After a hectic end-of-year calendar that included appearances in front of no fewer than three congressional committees, it's been radio silence from Jon Corzine in 2012. Given the potential for shareholder and client lawsuits, there is little motivation for him to speak to the media right now (though I wouldn't rule out a high-visibility PR campaign at a later stage, depending on how things develop). �
Given what we now know, a criminal indictment against Corzine looks highly unlikely. There is no evidence that he hid anything from the board, and he was not involved with the treasury function, which controlled the transfers of firm and client monies. Finally, there is no suggestion of criminal intent. There is an argument to be made that Corzine breached the duty of care he owed his shareholders; his headaches relating to shareholder lawsuits and potential actions by regulators are surely only beginning.
As far as future employment, I don't expect Corzine will be invited to join the board of a public company anytime soon -- that would be much too visible, with the potential for massive negative publicity. However, I think it is quite likely he will eventually join or consult for a hedge fund or private equity firm as a "senior advisor."
Michael Roseman, former Chief Risk Officer
Michael Roseman was one of the good guys in this story. He repeatedly warned Corzine and MF Global's board of directors of the risks associated with the sovereign repo-to-maturity (RTM) transactions that brought the firm down. For his trouble, he was stripped of his role and replaced in January 2011.
Michael Roseman last appeared in front of Congress on February 2, at which time he offered prepared remarks and answered questions. According to his LinkedIn profile, Roseman has not taken employment since leaving MF Global. Not to worry, though: In addition to his receiving a $350,000 salary, the floor on his first-year bonus was set contractually at $1 million; when he left MF Global at the end of March 2011, he was offered a $1.35 million severance package (salary, cash bonus, and equity bonus). My guess is that he could make an adequate living on the speaking circuit -- surely a book describing his experience at MF Global is not long due.
Michael Stockman, former Chief Risk Officer
Michael Stockman replaced Michael Roseman in March 2011. Stockman had been recruited to be the "new Chief Risk Officer, with the experience and skill-set to assist in the transition [of MF Global to investment bank]." Not surprisingly, from the outset, he adopted a more cheery opinion of Corzine's RTM trades than his predecessor. Instead of reporting directly to the board, Stockman reported to Corzine's right-hand man, Brad Abelow (see below).
Stockman appeared at the same February hearing as Roseman. Best quote: "In or about January 2011, MF Global offered me the position of Chief Risk Officer." Never mind managing the risk-management function of an organization that traded complex financial products across multiple time zones and geographies, Stockman can't say with certainty in which month he received MF Global's offer of employment. There's no point in relying on him for a reconstruction of the firm's hectic last days.
It's not clear what Stockman is doing now, but being associated with two organizations that suffered catastrophic breakdowns in risk governance should provide ample warning to anyone considering hiring him in any capacity relating to risk management. (Stockman's previous position was Chief Risk Officer for the Americas at UBS, which suffered the largest losses of any bank during the credit crisis.) Still, stranger things have happened in business.
Brad Abelow, Chief Operating Officer
John Corzine personally recruited Brad Abelow, a longtime associate and his former gubernatorial chief of staff, to fill the role of Chief Operating Officer (the responsibilities of a COO are directly comparable to that of a chief of staff).
Brad Abelow appeared in front of Congress twice in December, but has kept a low profile since then. His days are not his, after all: He still has a day job at MF Global. According to his LinkedIn profile, Brad Abelow remains COO to this day, and, sure enough, he's currently helping the trustee in the resolution proceedings. The firm's bankruptcy did put a dent in his compensation, though: He's now working for $60,000 per annum -- a far cry from the $1.5 million salary he was earning pre-collapse.
Lesson learned?
Whatever else these four men end up doing, we can only hope that they will recognize their responsibility in this grotesque episode (minus Roseman), unlike Richard Fuld. More than a year after Lehman's bankruptcy, the former CEO told the House Financial Services Committee that his firm was conservatively capitalized, "risk averse," and that its "commercial real estate investments were conservative."
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