Wall Street 2: The Return of Corzine

MF GLOBAL HAS HAD its troubles. In June 2007, the brokerage firm was spun off from the giant British hedge fund, Man Group, which had built it up after buying the futures arm of the defunct brokerage Refco. “Oh Man! MF Global Disappoints,” a Forbes headline said after the IPO. The estimated stock price range had been set at $36 to $39, but it debuted at $30 and dropped 10 percent on the opening day.

Things got worse. In late February 2008, the firm disclosed that a 40-year-old man in its Memphis office had made rogue bets on wheat futures that cost the brokerage $141.5 million. MF Global had reportedly removed internal trading limits to speed up electronic trading.

There were rumors that MF Global was losing clients. The company’s stock price dropped from over $28 to under $10, and before the end of the year, to under $2. In December, MF Global was fined another $10 million to settle charges over supervision violations from the previous six years.

“Clearly, successful second acts on Wall Street are very rare,” Roy C. Smith, the former president of Goldman Sachs International Corp., and an N.Y.U. professor. “But this case is a little different.”

After Mr. Corzine was announced as the firm’s new leader, its stock price went up to nearly $9, well over its previous 52-week high. “This is a five-year project,” the former governor said in the interview, “if not a decade project.”

The idea isn’t to merely clean it up. Mr. Corzine wants to grow the futures brokerage into a mini-Goldman—an investment bank like, say, the late Donaldson, Lufkin & Jenrette, big but not too big. “I want to fill the space people long for: a very professional, high-performance, high-ethic organization,” he said. The source with knowledge of Mr. Corzine’s thinking said MF Global could grow a money-management business, an advisory business, a venture capital fund, an Indian mutual fund!

But he’s also aware of the history of petered-out Wall Street second acts. “I get that. There’s a risk of that,” he said. “But I have confidence that with discipline, steady, focused work, this is a franchise that can be taken from what it is, probably one of the leading futures brokers ever, into an outstanding position in the broader financial services field.”

“Sometimes I think we take on jobs where the doing isn’t as much fun as the being,” said Mr. Neidich, the former Goldman Sachs management committee member. “I think he’s going to like doing what he’s doing day to day.”

mabelson@observer.com