For those who were hoping that Jon Corzine would face ramifications similar to what is being pursued with Russ Wassendorf, Sr., we’ve got bad news. Via Dealbreaker:

A criminal investigation into the collapse of the brokerage firm MF Global and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives.

After 10 months of stitching together evidence on the firm’s demise, criminal investigators are concluding that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear, according to people involved in the case. […]

In the most telling indication yet that the MF Global investigation is winding down, federal authorities are seeking to interview the former chief of the firm, Jon S. Corzine, next month, according to the people involved in the case. Authorities hope that Mr. Corzine, who is expected to accept the invitation, will shed light on the actions of other employees at MF Global.

Those developments indicate that federal prosecutors do not expect to file criminal charges against the former New Jersey governor. Mr. Corzine has not yet received assurances that he is free from scrutiny, but two rounds of interviews with former employees and a review of thousands of documents have left prosecutors without a case against him, say the people involved in the investigation who spoke on the condition of anonymity.

While the government’s findings would remove the darkest cloud looming over Mr. Corzine — the threat of criminal charges — the former Goldman Sachs chief is not yet in the clear. A bankruptcy trustee on Wednesday joined customers’ lawsuits against Mr. Corzine, and regulators are still considering civil enforcement actions, which could cost him millions of dollars or ban him from working on Wall Street.

This is certainly not what MFGlobal victims wanted hear, and seems to be part of a trend with federal prosecutors. They don’t want to take a case they’re not 100% sure they can win, and Corzine’s army of lawyers seems to have them running scared. That’s not how the system should work, and fuels our argument that the law should be changed to render FCM leadership liable for any missing customer funds moving forward.

The last paragraph of this passage, however, should give some hope. Trustee Giddens has made it clear that he will pursue leadership as aggressively as possible, and much of the chatter in the industry has indicated that Corzine is at the top of his list. This could drain Corzine’s financials substantially. While the regulators may be inept at catching fraud, they’re still not bad about pursuing action against it. We anticipate seeing some very hefty fines, and beg the regulators to ban this man from finance, especially given another revelation in this article… one almost too absurd to contemplate:

Mr. Corzine, in a bid to rebuild his image and engage his passion for trading, is weighing whether to start a hedge fund, according to people with knowledge of his plans. He is currently trading with his family’s wealth.

His poor family. If we see more of the risk management Corzine used at MFGlobal, they’re screwed. But beyond that, should this fund launch, anyone who gives this man their money to manage should be evaluated for competency in making financial decisions. We wrote about the hazards involved in hedge fund investing earlier this week, and if you think putting your money into the name of a man who has already demonstrated having no qualms with abusing customer trust, you deserve everything that’s coming to you.