Corzine Blew Off Risk Officer

CRO Michael Roseman went to board of directors with fears
By Kevin Spak,  Newser Staff
Posted Dec 6, 2011 8:31 AM CST
In this Oct. 20, 2009 file photo, then New Jersey Gov. Jon S. Corzine answers a question during an interview with the Associated Press, in Trenton, NJ.   (AP Photo/Mel Evans, File)

(Newser) – Jon Corzine can’t say that nobody warned him that his bets on European debt might ruin MF Global, because his chief risk officer did just that—repeatedly. Michael Roseman told Corzine that the company didn’t have the cash to handle the risk it was taking on, and that a credit downgrade would have dire consequences, sources tell the Wall Street Journal. He even took the rare step of taking his concerns to the board of directors.

But Corzine dismissed Roseman’s doomsday scenarios as unlikely, and told the board that if it didn’t trust his bets, he’d leave the company. The board sided with Corzine, letting him balloon the company’s exposure to European sovereign debt from $1.5 billion in late 2010 to $6.3 billion just before its October bankruptcy. Roseman ultimately left the company in March. (Read more Jon Corzine stories.)

My Take on This Story
Show results without voting  |