UPDATE: Jon Corzine Hired As CEO Of MF Global In Management Shake-Up

Former New Jersey governor Jon S. Corzine is returning to the business world as chairman and chief executive of MF Global Holdings Ltd. (MF), the brokerage said Tuesday.

Corzine will replace CEO Bernard Dan effective immediately as part of a shake-up at the loss-making futures and commodity specialist, formerly known as Man Financial.

The move comes four months after Corzine, a former chairman of Goldman Sachs Group Inc. (GS), failed to win re-election in New Jersey.

New York-based MF Global remains one of the world's largest independent futures brokers, but it has suffered a tumultuous three years. A rogue trading scandal in 2008 has left its value below $1 billion, less than a third of its 2007 flotation value.

"We're going to focus on earnings here and generate some capital internally that I think will make us a lot more attractive to investors," said Corzine in an interview Tuesday. "We need to get more client-driven, based on the discussions that I've had."

He will also succeed Alison Carnwath, who will step down from a three-year tenure as chairman in August.

Corzine, once thought of as a possible Bank of America Corp. (BAC) chief, is the third senior Goldman alumni to enter the derivatives sector, following Duncan Niederauer and John Thain, the current and previous CEOs of NYSE Euronext (NYX), respectively.

Dan is stepping down immediately for "personal reasons," according to the company, after notifying MF Global's board of his decision last week. The former CEO of the Chicago Board of Trade was hired in mid-2008 and took over as CEO in October of that year after the departure of long-time head Kevin Davis.

Dan's departure will carry a six-month non-compete clause, according to a person familiar with the matter.

Under Davis, MF Global grew to become the world's biggest non-bank futures and options brokerage through nearly 20 acquisitions, including assets from Refco (RFX) following the 2005 collapse of that Chicago financial services group.

But the company was rocked in early 2008 by rogue wheat trades that led to a $141.5 million charge, a dilutive restructuring and Davis' replacement by Dan.

MF Global has reported a string of quarterly losses in the past year as Dan presided over efforts to deleverage its balance sheet and push into options market-making and Asian stock trading.

The company is also pursuing status as a primary dealer to participate in Treasury auctions, and continues to await approval from the New York Federal Reserve.

While Corzine said these efforts would continue, the company continues to be shadowed by the risk management issue. In December it paid a $10 million fine to U.S. futures regulators because of the rogue trades, alongside a $495,000 payment to Chicago futures exchange operator CME Group Inc. (CME). On Tuesday MF Global outlined expectations for net revenue of $235 million to $245 million in its fiscal fourth quarter, which ends March 31. The company said its capital and liquidity position for the quarter would not be materially different from the prior quarter.

Though MF Global's size pales compared to leading Goldman Sachs or the state of New Jersey, Corzine said the potential to "create franchise value" and the international growth opportunities made his new position attractive.

"There are a lot of places that have bigger capital positions, and a lot more so-called panache, that don't have global footprint of this organization," he said.

Corzine was asked if he was interested in the job by J. Christopher Flowers, the investor whose private-equity firm J.C. Flowers & Co. maintains a stake of nearly 10% in MF Global as part of its 2008 restructuring. Simultaneous to his taking the CEO role at MF Global, Corzine also joined J.C. Flowers as an operating partner.

"We are gratified that the [MF Global] board enthusiastically accepted our recommendation," said a spokesman for the private-equity firm. "We are also very proud to have played a role in bringing Mr. Corzine back to the financial services arena."

MF Global shares jumped 8.6% to $7.95 in late trading after closing Tuesday at $7.32.

-By Jacob Bunge, Dow Jones Newswires; 312-750-4117; jacob.bunge@dowjones.com

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