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

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.
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