Giddens, who has conducted his own probe into how the company failed, said in a report last year that he determined claims for breach of fiduciary duty and negligence against Corzine, Steenkamp and other officials.

Freeh’s report paints Corzine as a tunnel-visioned leader, insulated from criticism, who, although fully aware of the limitations of the company’s system, pushed to transform MF Global into an investment bank by taking on greater risk.

Steven Goldberg, a spokesman for Corzine, didn’t immediately return a phone call and e-mail seeking comment on Freeh’s findings.

When Corzine joined MF Global in March 2010, the company was already struggling. Corzine moved to diversify the company away from traditional investment of client funds and make it a broker dealer and full-scale investment bank. By September 2010, he had begun asking the board to increase the company’s risk limits to invest in more European sovereign debt issued by countries such as Italy, Portugal, Spain and Ireland, according to Freeh’s report.

Unlimited Power

Corzine had unlimited power in his role at MF Global, holding positions that were previously filled by two different individuals, according to the report. Corzine hired Chief Operating Officer Bradley Abelow, who was once his chief of staff as governor, and favored Steenkamp over then-CFO Randy McDonald. Under Corzine, the board reduced its executive committee to four members from five, according to the report.

To implement his strategy for the company, Corzine handpicked traders with whom he worked and began trading on his own, under minimal supervision, in June 2010 using an existing Treasury Department account, according to the report. He maintained his own portfolio for the company in accounts that bore his initials JSC and was known to place trades in the middle of meetings.

Driving Force

Corzine was the driving force behind MF Global’s European trading portolio and personally instructed traders “when to enter and exit various positions,” Freeh said.

Freeh called management’s behavior “negligent conduct” and said the lack of risk controls both made it impossible for managers to get a real-time snapshot of the company’s liquidity and prevented them from knowing in the final week of MF Global’s existence that customer funds were being used to satisfy the broker-dealer’s liquidity needs and an obligation to its U.K. unit.