Jon Corzine steps down as investigations mount

As the scrutiny of MF Global's bankruptcy continues to mount, the trading firm's chief executive, Jon Corzine, stepped down and reportedly hired a criminal defense attorney.

Corzine, who had previously served as a U.S. senator and as the chief executive of Goldman Sachs, announced the resignation Friday morning, five days after MF Global filed for bankruptcy.

In a statement, Corzine said: "I feel great sadness for what has transpired at MF Global and the impact it has had on the firm’s clients, employees and many others."

Corzine said that he would not seek any severance payments as he steps away from the company.

The move is the latest stage in Corzine's descent from the loftiest heights of power. Corzine took over MF Global last year after losing a bid to be reelected as New Jersey governor. He promised to help MF Global grow by making bigger bets with the firm's own money.

That strategy backfired after the firm made a series of large bets on the sovereign debt of struggling European countries.

Now, a growing list of regulators and prosecutors are probing MF Global's actions as it encountered difficulty. Friday morning, the New York Post reported that the U.S. attorney in Manhattan, Preet Bharara, is taking a look at whether the company mishandled customer funds. This is a subject the FBI has already been reported to be looking at.

To help deal with these inquiries, Corzine hired a criminal defense attorney, Andrew Levander of Dechert LLP, according to the Wall Street Journal.

On the regulatory side, it seems as though every lawyer at the Securities and Exchange Commission could get drawn into looking at some potential misdeed related to the firm. The SEC added to its workload when it began looking into possible insider trading in MF Global's bonds during its last days in operation, Bloomberg reports. And the Wall Street Journal gave it yet another potential topic Friday morning when it reported that MF Global may have taken steps to hide from investors its true levels of risk.

Given all these problems, Corzine's statement in stepping down -- and the lack of any mention of remorse -- is coming under fire from industry watchers like Reuters columnist Felix Salmon:

I’m sure you’re sad — that often happens, when you become the living embodiment of the destructive greed of the 1% and a hate figure for millions. But are you sorry? Or are you going to pull a Dick Fuld and live in denial, convinced “until they put me in the ground” that you’re a victim rather than a perpetrator?

This kind of thing is why there’s so much anger aimed at the 1%. Chances are, Corzine will never be prosecuted, let alone convicted, and that he’ll enjoy the comfortable retirement of a centimillionaire for decades to come. He deserves much worse. But right now, when it matters, he can’t even bring himself to say he’s sorry.

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-- Nathaniel Popper

twitter.com/nathanielpopper

Photo: MF Global's Jon Corzine. Credit: Rich Schultz / Associated Press

Dow drops 2.3% for the day, gains 9.5% in October

A sell-off on Monday dented stocks' big advance for October, as worries about Europe's debt crisis flared again and the failure of brokerage MF Global Holdings Inc. rattled Wall Street.

The Dow Jones industrial average slumped 276.10 points, or 2.3%, to close at 11,955.01, the largest one-day drop in four weeks.

For October overall the Dow rallied 1,042 points, or 9.5%, the biggest monthly gain since October 2002.

The Standard & Poor’s 500 index fell 31.79 points, or 2.5%, to 1,253.30 on Monday. The S&P jumped 10.8% for the month, its best gain in nearly two decades, as recession worries faded.

Trading volume was relatively moderate Monday, suggesting there was no mad rush for the exits, though selling accelerated near the closing bell.

Many analysts had warned at the end of last week that the market was overdue for a pullback after soaring for most of October. In Wall Street parlance, stocks were “overbought.”

Monday’s headlines brought good excuses to sell. Italian government bond yields rose, raising fresh doubts about Europe's latest plan to solve its debt crisis.

When European leaders on Thursday announced their new strategy to end the debt nightmare, a key to the plan was to make investors feel confident about buying Italian bonds, thereby driving interest rates down. Instead, yields are rising.

Most European stock markets slid between 2.8% and 3.8% on Monday, after rocketing in the aftermath of the rescue-plan announcement.

MF Global’s failure, though not a total surprise, spooked investors by resurrecting memories of the collapse of Lehman Bros. in September 2008.

Some investors and traders rushed into the usual havens: U.S. Treasury bonds and the dollar. The yield on the 10-year T-note dived to 2.11% from 2.32% on Friday. The dollar rallied against most currencies, helped in part by Japan’s decision to try to beat back the yen from all-time highs.

On Wall Street, the bulls know they have history on their side in the near term -- if you believe that the U.S. economy will keep growing, Europe won’t implode and no other major disaster looms: Since 1950, November and December have been the stock market’s best two-month period of the year, on average, as investors often look ahead to the new year with optimism.

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-- Tom Petruno

Photo: The New York Stock Exchange floor on Monday. Credit: Brendan McDermid / Reuters

Chevys, El Torito owner files for bankruptcy

The owner of Mexican restaurant chains Chevys Fresh Mex, El Torito and Acapulco filed for bankruptcy Tuesday, pressured by years of slipping sales and the country’s economic malaise, executives said.

Cypress-based RM Restaurant Holding Corp. said its revenue has fallen to $478 million last year from $553 in 2008. The company’s 178 restaurants are seeing fewer diners, according to the filing in U.S. Bankruptcy Court in Delaware.

The restaurants are in states battered by “significant increases in unemployment” and the home mortgage crisis, said Chief Financial Officer Richard P. Dutkiewicz in the filing.  About 84% of the company’s locations are in California, where the purchasing and distribution facilities are also based.

Dutkiewicz added that “the recent national recession has left much of the general public less prone to spending their disposable income” and that the company “does not expect a meaningful improvement in the economy in 2011.”

A performance index calculated by the National Restaurant Assn. trade group last week fell to its lowest level in 13 months amid dipping customer traffic, the aftermath of Hurricane Irene and continued uncertainty among eatery operators.

RM’s subsidiary, purchasing and distribution service Real Mex Foods Inc., was hard hit by rising commodity prices and the loss of key contracts, the filing said. Real Mex provides Mexican food products to chains such as El Pollo Loco, Del Taco and Baja Fresh as well as retailers such as Trader Joe’s, Costco and Vons.

The company has about 11,000 employees.

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-- Tiffany Hsu

Sea Launch bumps back rocket launch a day

Less than a year out of bankruptcy, rocket venture Sea Launch is set to send a 10,141-pound telecommunications satellite into orbit from the middle of the Pacific Ocean on Saturday for Paris-based communications giant Eutelsat. 

The company will webcast the launch live on its website here beginning around 1 p.m. PDT. The launch is scheduled for 1:18 p.m.

Sea Launch had planned on launching Friday, but had to push it back a day because it took longer than expected to reach its launch site in the middle of the Pacific.

The company uses a floating ocean platform near the equator to lift satellites into space. It's located about 3,300 miles southwest of Long Beach and 1,400 miles south of the Hawaiian Islands. The site allows rockets to reach orbit faster while burning less fuel as they use the Earth's rotation for momentum.

When the company isn’t blasting off 20-story rockets, it docks its specially designed ship and a launch platform, made from a modified oil rig, in the Port of Long Beach.

It is the company’s first launch since it emerged from Chapter 11 bankruptcy protection late last year. For a more in-depth look at Sea Launch and its history, take a look here at a story that ran in Thursday’s Times.

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-- W.J. Hennigan

twitter.com/wjhenn

Photo: Sea Launch transfers rocket to launch platform. Credit: Sea Launch

FBI, Energy Department raid offices of solar-panel maker Solyndra

The FBI and the Energy Department's inspector general's office are executing a search warrant at the Fremont, Calif., headquarters of solar panel maker Solyndra. The raid came just two days after the company declared Chapter 11 bankruptcy, a move that raised serious concerns about the Obama administration's granting of a $500-million-plus federal loan guarantee to Solyndra in the fall of 2009.

FBI Public Affairs Specialist Peter D. Lee confirmed that the company's headquarters had been targeted, adding that the raid was still underway late Thursday morning. Lee said he was unable to disclose further details about what the FBI and the Energy Department was hoping to find.

Lee said that the raid documents were under seal.

Solyndra is a manufacturer of solar power systems for rooftop applications on commercial buildings. Earlier this week, the company said in a press release that "global economic and solar industry market conditions" had forced it to suspend its manufacturing operations. The company has laid off its 1,100 full-time and temporary employees.

"Despite strong growth in the first half of 2011 and traction in North America with a number of orders for very large commercial rooftops, Solyndra could not achieve full-scale operations rapidly enough to compete in the near term with the resources of larger foreign manufacturers," the company said.

Solyndra was one of about 40 alternative energy projects funded over the last two years through an Energy Department loan program that helped companies involved with major wind, solar, nuclear and ethanol projects. At the time, the Energy Department said that it expected the combined projects to create about 60,000 jobs.

President Obama had visited Solyndra for a tour of the factor in May 2010, even as outside observers, such as PricewaterhouseCoopers, were already raising doubts about the company's ability to survive.

Solyndra had another Obama connection in that it was backed by Tulsa billionaire George Kaiser, a key supporter of the president.

-- Ronald D. White

Photo: FBI agent guards the Fremont, Calif., offices of Solyndra. Credit: Associated Press

California solar panel manufacturer ceases operations

The California solar panel manufacturer that received a high profile $535 million Energy Department loan guarantee announced today that it was ceasing operations, laying off 1,100 workers and will file for bankruptcy in the coming days.

Fremont-based Solyndra said that it had been rocked by stifling global economic conditions and a slow recovery from the great recession. It had also faced heavy competition from Chinese firms that were undercutting it on costs.

The company's website had not been updated to reflect the development. A terse voice mail announcement on one of Solyndra's contact information telephones said only the following: "Solyndra announced today in a press release that it has ceased operations and intends to file for chapter 11 bankruptcy protection," advising customers on how to contact the company for further information.

It was quite a fall from late May 2010, when the company hosted the president on a factory tour. Company officials announced then that they expected to be adding new employees. But in July of this year, the company was being grilled on Capitol Hill by House Republicans who said that there were indications that the company was in a weak financial condition and wasn't a good choice for the loan program.

Solyndra would become the third such company to file for bankruptcy in recent days. Spectrawatt Inc. of Hopewell Junction, N.Y., filed for Chapter 11 bankruptcy on Aug. 19. Evergreen Solar Inc. of Marlboro, Mass., filed for Chapter 11 bankruptcy on Aug. 15.

Experts said that solar energy was still among the most promising of all of the alternative energy sources, but they added that due diligence was necessary to pick the best companies. Other experts said that a brutal and wholesale consolidation of the industry was inevitable.

Bill Bathe, chief executive of U.S. Energy Services, a Minneapolis company that offers a portfolio of energy management services, said "there are a lot of companies competing for that space. There used to be 50 car companies in this country, but very few survived. For consumers, this is an exciting time, but for investors, this is still a very high-risk stage. You may hit a home run or be part of the experiment that delivers no pay out."

Another expert said that he was not familiar with the company, but added that it was an example of how the federal government will have to be far more careful in the future.

"There has to be a more efficient and effective way of making these kinds of decisions on loan subsidies," said Bruce Bullock, executive director of the Maguire Energy Institute at Southern Methodist University.

Tyson Slocum, director of the energy program at Public Citizen, said that there were lessons to be learned in the way that other nations, particularly Germany and Japan, have funded their renewable energy projects.

"You can't end loan subsidies for renewable energy. That would be a disaster. What we need to do is make better decisions about the subsidies we do deploy. In countries like Germany and Japan, which have a much larger footprint in this area, subsidies have been remarkably successful," Slocum said. "We can do the same here, if we are more careful."

Photo: Ben Bierman, left, and Chris Gronet take President Obama on a tour of the Solyndra solar panel company in Fremont, Calif. Credit: Paul Chinn/Pool photo

Also: Solar power in California is still a hot topic

Also: Investing: Green technology has big growth potential

-- Ronald D. White