MF Global Trustee Freeh Sues Corzine
Two earlier reports last year reached similar conclusions.
Following his appointment as chief executive, Corzine "initiated a new and aggressive trading strategy, investing heavily in European sovereign debt, which was financed through repurchase to maturity transactions," Freeh said in the 174-page report.
Under the strategy, broker-dealer unit MF Global Inc. would purchase the securities, and MF Global U.K. Ltd. acted as agent for the purchase. The transactions involved financing the company's purchase of European sovereign debt issued by countries such as Ireland, Italy, Portugal and Spain and were meant to "capitalize on volatility and unrest in the European markets," the report said.
"Because of the way these trades were structured, the company immediately recognized the income while simultaneously removing the transactions from the company's balance sheet. These transactions were meant to serve as a profit 'bridge' until the company began to produce earnings from other, new lines of business," Freeh said in the report."When combined with other factors, strategic decisions and management lapses surrounding the company's business, the
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