The Hill News

Jon Corzine, who is considered by many one of the smartest fixed-income minds in the business, took immeasurable risk with the capital of his firm. It was revealed that the company was leveraged 40-1. In summary, the company only had 2.5 percent equity invested against risk positions.

Note: Even in the height of the sub-prime crisis, 40-1 leverage would have been considered extremely risky, where small movements in underlying positions could represent deleterious outcomes for investors.

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