3its revenue from its FCM to a major Wall Street investment bank that generated revenue from proprietary trading and other business lines. As part of that plan, and to increase revenues,Corzine caused MF Global to make significant investments in various instruments, such as thesovereign debt of certain European countries. Over time, at Corzine’s direction, theseinvestments grew substantially and became a material portion of the Firm’s balance sheet, evenas the investments grew increasingly risky.4.
By the latter half of 2011, these investments and other factors placed significantstrains on the Firm’s capital and liquidity. By late October 2011, the Firm’s sources of cashwere drying up, and the Firm was in desperate need of funding to survive. The Firm took stepsto sell itself to another financial services company. Firm employees, including Corzine,communicated with one another, sometimes by email and sometimes on recorded telephonelines, concerning the Firm’s dire situation.5.
During the last week of October 2011, in violation of U.S. commodity laws, withvirtually no other sources of cash to keep it afloat, MF Global unlawfully used nearly one billiondollars of customer segregated funds to support its own proprietary operations and the operationsof its affiliates. Thousands of customers were directly and indirectly harmed by these unlawfulacts. On October 31, 2011, Holdings and certain other affiliated companies filed for bankruptcy protection.6.
Corzine bears responsibility for MF Global’s unlawful acts. He held and exercised direct or indirect control over MF Global and Holdings and either did not act in good faith or knowingly induced these violations. In violation of his legal obligations, he also failed tosupervise diligently the activities of MF Global’s officers, employees, and agents.