This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Five Dumbest Things on Wall Street This Week: June 8

Stocks in this article: FB JCP AAPL TPX NDAQ JPM GS NYX

5. Jon "D.B." Corzine

Bless you MF Trustee James Giddens! Before your report appeared this week, things were getting so quiet on the MF Global front that we started thinking that Jon Corzine had turned into Wall Street's version of D.B. Cooper.

Of course, all things considered, good old D.B. doesn't really hold a candle to the former Goldman Sachs (GS) CEO. All Cooper did was nab $200,000 before parachuting from a hijacked plane and vanishing into history. Corzine, on the other hand, oversaw a $1.6 billion swindle from supposedly segregated customer accounts and then disappeared in plain sight.

That is, until this past Monday when the curiously cold manhunt for Corzine -- not to mention MF's cash -- finally heated up a notch with the arrival of Giddens's searing 275-page analysis of the commodities broker's demise. The report, submitted by Giddens to the U.S. Bankruptcy Court in Manhattan, details how a thoroughly mismanaged MF Global operated with only the tiniest of cash cushions well before it sank into bankruptcy last October.

Despite Corzine's reputed prowess as an adept risk-handler, Giddens concludes that the hitherto hot-shot CEO never implemented "systems and tools that would enable accurate real-time monitoring of liquidity." As a result, says Giddens, MF Global's management "seriously underestimated both the speed and extent" of the panic once it hit with force last fall.

And when the alarm bells did finally sound, MF was already in way too deep to save itself because of Corzine's doomed bets on the direction of European bonds. Corzine took on "a level of risk that was orders of magnitude greater than the relative exposure at other, larger institutions," according to Giddens, with investments peaking in October 2011 at $7 billion, or $700 million more than previously known.

Yes indeed, Giddens unambiguously captures how the former Goldman trader loaded up the MF train with oodles of risky debt and then fell asleep at the switch. Nevertheless, while Giddens does hold out the possibility of suing Corzine for negligence, he says his report draws no conclusions about possible criminal behavior by MF's management.

That's more than understandable, of course, considering the former New Jersey Senator and Governor's deep political connections, who right now seem more concerned with nailing Jamie Dimon for legally losing $2 billion of JPMorgan's (JPM) own funds rather than cornering Corzine for illegally losing nearly that same amount of other people's money.

Then again, the D.B. Cooper case file has remained open at the Federal Bureau of Investigation for decades, so maybe we shouldn't give up hoping for justice just yet.

1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs