Corzine and his lackeys, while claiming utter lack of knowledge and denying any culpability whatsoever in the transfer of segregated client accounts, suggested the company's treasury operations would be the place to look. They repeatedly said that they couldn't answer questions without access to records. So lower level "treasury ops" personnel now get to join in on the subpoena/testimony congressional hearings show.
Any affected employee most definitely would not be overwhelmed with joy about this. Under Corzine's perverted leadership style (including determining what to invest in and ensuring his desires are carried out), it would seem treasury operations functions were largely limited to managing cash flows and balancing incoming payments with outflows. That they simply recorded and tried to reconcile what was done by others. It would be unlikely for them to question anything if they wanted to keep their jobs. Recall Corzine's ludicrous testimony about encouraging discussion and input. A former key executive did just that and was summarily fired and replaced. An autocratic work environment does not promote other than doing as told. Now that Corzine has left the company, these staffers might well have much to say about the real goings-on. Because a lot of stuff (responsibility) was deflected upon company treasury staff
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The testimony of Corzine and his top executives brought up a number of credibility issues. One was their flabbergasting decision not to check where the money came from for liquidity to pay off the margin calls. Which actual client accounts were impacted. Instead, they focused all their attention on resolving and reconciling the figures. As was mentioned, these money flows can later be identified and tracked backwards. Hopefully, this will expose who authorized and handled the actual transfers. Somebody or some persons actually transacted these transfers, you know.
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Another under-reported item was testified to by the CFTC representative on the panel. She said that she only became involved in the audit/investigation later. That CFTC chairman Gensler was heading it until 10/26/11. That everything "was safe" through that date. Gensler worked at Goldman Sachs under Corzine as CEO. I suspect the continuing investigation will show that this "things were fine" was definitely not the case. Whether completely incompetent or covering up for his former boss, I don't think Gensler will be looking too good in the near future. A top regulator clueless or serving someone in this manner a mere 5 days before before the company blew up and filed for bankruptcy with $1.2 billion in segregated customer accounts confirmed as missing certainly isn't done with this matter yet.
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So far, we are left with the position of senior management contending that they knew nothing of "non Rule 1.25" usage of segregated client accounts when it undoubtedly happened. And apparently we are expected to believe that these unauthorized transactions were done by underlings without the knowledge or direction of senior management and against company policy and procures. Either this was one of the worst managed public companies in history with completely ineffective controls or a real juicy expose of a multilevel financial conspiracy will shortly hit the market. Just what we need with the world financial sector one "shock" from collapse.
And it all revolves around an individual whose resume somehow includes being elected as both a US Senator and New Jersey governor. And of course, his experience with The Squid went a long way towards making him what he is today. Finally, don't forget that this "person's" influence and standing resulted in the Federal Reserve's decision to add this outstanding corporation to its august list of Primary Dealers earlier in the year following thorough examination of all company practices.
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