You're watching...
Former New York Governor Eliot Spitzer on Jon Corzine’s involvement in MF Global and the loss of investor funds.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Welcome to the show now Eliot Spitzer governor good to see effect I'm going to -- thank you for inviting me appreciate your being here let's start with the news of the day actually it's been the news for the past couple of weeks MF global.
-- -- -- You actually served as governor at the same time that John -- Corzine was governor great idea that's right what do you make of Jon Corzine's involvement with -- MF go global do you think keys.
He broke the law and and I -- I think it is way premature to jump to conclusions that the overriding issue right now is what happened to the customer money I think the big question is.
600000001.
Point two billion dollars the number still unclear of customer money is missing.
Did and that use that to cover margin calls.
To cover bets that -- -- -- on Italian and Greek.
Sovereign debt if they did that there could be a real problem -- that were prosecutor I mean your your nose twitch did at the slight gasoline slightest hint of a bad behavior wouldn't your nose -- -- -- -- there -- -- -- bottom noses -- and right now people are desperate to find out where -- that money go they've got to Parse the books to see -- customer accounts were -- to cover the margin -- of the proprietary trading.
Of the company itself.
Leverage of 3041.
After what we've gone through certainly made people wonder have we not learned the lesson -- I -- what.
The irony is that Jon Corzine himself was one of those calling for -- stopping the highly leveraged bets back in 2008 and yet he's a -- -- -- John.
He understood how to place big bets he had done so very successfully this is one at a minimum they didn't come up.
The right way.
Perhaps.
People in the company and you don't want to generalize yet but people in the company.
Maybe get something of Regis we wrong and a lot of people are out a lot of money and there are as to use your metaphor a lot of noses twitch and right now.
Now would you prosecute him if you were still a prosecutor.
Which Google investigating this case for possible plus who -- to separate statement you made it.
Certainly there are a lot of people seem we've got to dig into this to find out where the money what book you old maxim.
Follow the money.
That is going to be the answer here as it is across Wall Street.
When you have treating the battles of this sort and where you have customer money that appears to disappear.
-- -- a lot of innocent folks who -- had there are counted and that.
Who thought that there accounts were segregated to use the Wall Street -- where their company their dollars are kept in an account just for them.
And suddenly you -- -- to cover somebody else's debt.
Can't do that.
That's not street journal had an article last week showing that he had an unprecedented amount of control over the trades he was making most people in his position.
Would leave that other analysts -- at least have other analysts.
Oversee the -- he had extraordinary Cingular.
Interest in a lot of these trades is -- that suspicious to you know what's not suspicious of me understand two separate questions one did -- place the bets and too.
Who knew that in order to cover the margin call were -- of ourselves a little bit but who knew.
That to cover that margin call when you need to pony up more money because the price of what you ever bet on has gone down.
They raided a customer -- very separate questions there will be an answer at some point in time.
I -- Wall Street as well was inside the beltway the war -- you have on one -- -- better because it allows for cross -- absolutely apparently that wasn't the case here well -- there -- there -- command you know -- -- of military or you know and and and and other -- their command and control issues at a minimum if you of one person placing -- of that sort would leverage of that magnitude without a cushion of capital that was one of the issues one of the things we thought we -- learned after the crisis of a couple of years ago was.
You need the capital cushion you need the ability -- -- but the downside.
-- -- all sorts of that stuff happens if MF was betting -- aboard -- leverage ratio 421.
And sovereign debt in Europe was bouncing all over the place when it went down and they couldn't cover.
You know you're gonna have a crisis -- right Corzine of course was a governor he was also you with the United States senator.
Lot of political influence -- will he be able to use that political influence to avoid prosecution will be try to do that.
I'm gonna say something that may surprise you just the opposite.
Because he is perceived as having all that influence because he is a Democrat with the Democrat as president he is target number one.
And it say that full disclosure I knew what we served at the same time I would like him as a person.
Right now every prosecutor saying we can prove that we are tough.
By getting Jon Corzine we can prove more evenhanded.
By getting Jon Corzine I feel for the guy at a personal level look.
The facts will be the facts but right now he can't pick up the phone and say -- keep me company some slack everybody itself Obama taking that phone call.
Right now.
He has a -- way of getting information and washing their -- -- wink wink nudge nudge ways of finding out what kind of prosecute what kind of investigation -- going on no I think just the opposite now.
There are stories -- been stories that act in the run up to the tobacco would MF.
He was.
Call -- people at treasury at the CFTC the other agencies that oversaw and that global saying to them hey we don't need more capital cut us some slack.
Before things really fell apart and people were willing to give them the benefit of the doubt because -- that they trusted to judgment or he had -- -- political -- whatever may be again.
We to see what emails and transcripts may date.
But at this moment I think he is really it on the opposite side of that power struggle what people -- saying he is somebody we want to.
