Jon Corzine Political suicide

Corzine’s MF feels heat as feds eye missing $$

Jon Corzine, the CEO of bankrupt broker-dealer MF Global, saw his reputation tossed from the frying pan right into the regulatory fire yesterday when investigators discovered as much as $700 million in customer funds missing from the firm.

Officials from two US regulators, the Commodities Futures Trading Commission and the Securities and Exchange Commission, were looking into whether the loot was diverted to support some of the firm’s own trades.

As if the allegedly missing funds, which happened on Corzine’s watch, are not bad enough, it was learned late yesterday that the $700 million was responsible for capsizing a potential deal between MF Global and rival Interactive Brokers Group that could have saved the firm and the jobs of the company’s 2,870 employees worldwide.

Word of the possibly purloined funds came hours after MF Global was forced to filed for bankruptcy protection after its debt ratings had been downgraded to junk status on the discovery that the firm had $6.3 billion of European sovereign debt on its books -- twice as much as its larger Wall Street rivals.

Corzine pushed the firm to buy up the debt.

It was an amazing week for the one-time Goldman Sachs co-CEO, US Senator from New Jersey and Garden State governor.

MF Global’s Chapter 11 was the eighth-largest bankruptcy filing in US history and an embarrassing turn of events for a budding brokerage franchise that choked on too much Euro trash.

For Corzine, it was such a gut-wrenching plunge from grace that if his reputation masqueraded during Halloween as Lehman Brothers’ disgraced former CEO Dick Fuld, many would have thought it less scary.

MF Global’s shocking bankruptcy comes three years after Fuld’s firm went bust on toxic mortgage debt during the credit crisis in 2008.

A heavyweight in both Wall Street and Washington circles, Corzine was even considered a potential cabinet member in President Obama’s administration just last summer.

Indeed, MF creditors were so concerned that Corzine might quit to take a White House post that they demanded an “Obama clause” be inserted in a $325 million bond offering -- in which MF would shell out an extra 1 percent in interest if Corzine left for a government post by 2013.

That dream, if it were ever based on reality, went poof this week.

According to documents filed with the Manhattan bankruptcy court yesterday, MF has assets of $41 billion and liabilities of $39.7 billion.

The curtain fell on the broker-dealer after the SEC and CFTC expressed “grave concerns” about MF’s viability unless it struck a deal, according to MF’s bankruptcy documents.

Sources tell The Post that the firm had until Sunday or Monday to strike a deal or be forced to file bankruptcy due to its regulators’ worries.

In addition, MF Global and Corzine are facing heat from the Securities Investor Protection Corp., which yesterday sued MF Global, saying that the broker had to be liquidated because it may not have enough capital to make investors whole.

JPMorgan emerged as one of MF Global’s biggest creditors, with some $1.2 billion in exposures. However, sources familiar say that the exposure to the broker-dealer is less than $80 million and reflects debt from a line of credit it and other banks extended to the beleaguered brokerage shop.