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CEO Obligations - MF Global

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After the recent bankruptcy declaration of MF Global, the Chairman and CEO, Jon Corzine, indicated that he had no knowledge of the missing customer funds. Discuss the obligation of corporate CEOs to shareholders and employees to know about the financial activity of the corporation.

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After the recent bankruptcy declaration of MF Global, the Chairman and CEO, Jon Corzine, indicated that he had no knowledge of the missing customer funds. Discuss the obligation of corporate CEOs to shareholders and employees to know about the financial activity of the corporation.

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Unfortunately, we thought we saw the end of CEOs being able to claim ignorance after the creation of the Sarbanes Oxley Act, which resulted from the accounting scandals that took place in the early 2000s. In those scandals, the CEOs also claimed ignorance; they had no idea what was going on, in several of the cases. As a result, one of the provisions in the SOX Act actually requires the CEO and CFO to sign affidavits stating that they are personally aware of the information contained in the financial statements and the financial activities of the company. Apparently in the case ...

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