Regulator: Corzine Knew About Client Cash Grab

Jon Corzine disavowed all knowledge of MF Global's missing client funds in his latest Capitol Hill testimony yesterday, telling a Senate panel that he had "never directed anyone" to dip into customer funds. But soon after, the chairman of CME Group—MF Global's regulator—testified that Corzine not only knew about, but also approved loans from customer accounts, Bloomberg reports. "We were told by MF Global that they transferred the money to broker dealers, 'stop looking for the accounting error,'" Terrence Duffy said.

Duffy said $175 million may have been transferred to an MF Global European affiliate, and that he'd already forwarded his allegation to the Justice Department. The trustee liquidating MF Global also testified, confirming that customer accounts were $1.2 billion or more short, and that they were unlikely to be recovered. "I don't think we're magically going to come to a pot of gold at the end of the rainbow," he said. (More Jon Corzine stories.)