Tags: Koutoulas | Corzine | jail | MF Global

Hedge Funder Koutoulas: 'I'm Going to Keep Fighting Until Corzine Is in Jail'

By    |   Wednesday, 01 April 2015 06:40 AM

You might remember Jon Corzine as the CEO of Goldman Sachs, Democratic governor of New Jersey or U.S. senator from New Jersey.

James Koutoulas, CEO of $100 million hedge fund Typhon Capital Management, remembers Corzine as the CEO who drove securities firm MF Global into the ground, producing the eighth-largest bankruptcy in U.S. history.

"I am going to keep fighting until Corzine is in jail," Koutoulas tells Newsweek.

"The evidence we need to charge him is there. We need to make clear as a society that the next time a sociopath CEO says, 'Do I go out of business or do I cheat?' and chooses to cheat, he is going to be thinking about it in an orange jumpsuit in state prison."

Corzine will face a trial in U.S. District Court civil charges brought by the Commodity Futures Trading Commission that he failed "repeatedly and unlawfully" to keep more than $1 billion of customer money from being mishandled as MF Global collapsed in 2011. No trial date has been set yet.

Koutoulas alleges MF Global used customer funds to cover losses on trades it made on its own account. "That's a clear violation of the Commodity Exchange Act. It's a felony, and it's punishable with up to 10 years in prison. We should be enforcing this law, or it undermines our entire financial system," he explains.

Koutoulas has already won a battle against Corzine. He was the lawyer who represented MF Global's customers in federal bankruptcy court where MF Global was required to reimburse the clients' $1.6 billion that was lost.

At the opposite end of the ethics spectrum from Corzine is Vanguard Group founder John Bogle. He is almost universally worshipped in financial markets.

But Eric Nelson, CEO of Servo Wealth Management, while holding Bogle in high regard, takes the investment legend to task for a few of his ideas.

"I have a lot of respect for John Bogle and think Vanguard, is an excellent firm — one of the few good guys. He is responsible, of course, for creating the first index fund for retail investors, which has changed the way we all invest," Nelson tells Sensible Investing.tv.

"But with great power comes great responsibility. And I think some of his guidance lately might lead investors astray or at least confuse them."

First, Nelson points out that Bogle discourages the idea of investing in foreign stocks. "I just don't think concentrating all of one's assets in their home country is a smart decision," Nelson notes. "Ask Japanese investors how that's worked out for the last 25 years."

Second, Bogle appears to be neutral on the idea of portfolio rebalancing, Nelson says. But that's how you keep your portfolio aligned with your investment goals, he maintains.

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You might remember Jon Corzine as the CEO of Goldman Sachs, Democratic governor of New Jersey or U.S. senator from New Jersey.
Koutoulas, Corzine, jail, MF Global
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2015-40-01
Wednesday, 01 April 2015 06:40 AM
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