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Corzine steps down amid securities firm financial collapse

GLENN TOWNES Special to the AmNews | 11/10/2011, 2:45 p.m.

Former New Jersey Gov. Jon Corzine resigned last week as the head of an international global financial services company shortly after it was disclosed that the organization lost millions of dollars on unstable European investments and had to file for federal bankruptcy protection.

The firm, MF Global Holdings, which is based in New York, confirmed that Corzine, who had been CEO of the company since March 2010, had resigned effective Friday. The company filed for Chapter 11 bankruptcy protection two weeks ago. It has also been reported that the company is under investigation by federal regulators and the FBI due to alleged improprieties, including the unexplained disappearance of hundreds of millions of dollars from dozens of customer and investor accounts.

It remains unclear if Corzine, 64, will face any criminal charges. However, the multimillionaire ex-governor recently hired a white-collar criminal defense attorney. Last week, a Washington state-based law firm filed a class action lawsuit on behalf of investors. Among other things, the lawsuit contends that MF Global made false and misleading statements to investors and failed to disclose the company's reported internal issues regarding clients' funds.

"Corzine's departure from the company is not an encouraging sign," said Reed Kathrein, a partner at Hagens Berman Sobol Shapiro, the law firm that filed the class action suit against Corzine and MF Global. In a release to the media, Kathrein added, "As we continue our investigation, we hope to uncover whether the company mixed investors and company money, and if Corzine himself played a part in that decision."

Corzine has not commented publicly since his resignation. He was the governor of New Jersey from 2006 to 2010.