Jon Corzine’s application to register his hedge fund firm was approved by the Securities and Exchange Commission, which attached a series of seldom-seen conditions on the company, Bloomberg News reported. The restrictions on Corzine’s firm, New York-based JDC-JSC LP, limit the former U.S. Senator’s ability to handle customer cash and invest in less-liquid assets, according to an order that the agency issued on Monday. The SEC order includes “trading parameters” that bar JDC-JSC from engaging in proprietary trading and require it to have a “reasonable basis” to expect that, under normal conditions, each of its funds could be “orderly liquidated” within five trading days. That could restrict Corzine to trading in only the most liquid of markets, such as those for currencies and large-cap stocks, said David Tawil, co-founder of Maglan Capital, a New York-based hedge fund. The limits reflect events at MF Global Holdings Ltd. that unfolded after Corzine, the former co-chairman of Goldman Sachs Group Inc., became chief executive officer of the futures firm in 2010. Seeking to boost trading revenue, he employed the firm’s capital plus leverage to make at least $6 billion in proprietary bets on European sovereign debt. When the firm got hit by a cash crunch tied to the trades in 2011, some $1 billion in client funds went temporarily missing and MF Global was forced to file for bankruptcy. The Commodity Futures Trading Commission later permanently banned Corzine from the futures industry, though he neither admitted nor denied the agency’s claims that he failed to properly supervise the firm.
