This should be a really easy question for former MF Global CEO Jon Corzine. We should be able to ask, “So, Corzine, where is the money?” and he’d point us in the right direction.

But in the wake of MF Global’s whirlwind bankruptcy, that question has been anything but easy.

As I write this, there is still some $600 million in customer money that’s missing. That money was supposed to be housed in segregated accounts so that in the case of a bankruptcy it could easily be returned to the traders that rely on those funds to work on a daily basis.

As many as 40,000 Australian investors have been caught up in the MF Global scandal and still don’t know how much of their estimated $300 million they’ll ever see again.

But how in the world could something like this happen? At this point, it’s all speculation, but there are a few likely theories for the missing funds.

A very questionable history
My current favoured explanation for the missing funds at MF Global is the possibility that there have been shady dealings going on inside the company for a long time.

The disgraced, failed broker Refco was swallowed up by former MF Global parent Man Financial and rolled into MF Global. Even if we put aside the fraud that brought down Refco, the culture at both MF Global and Refco was so toxic that their regulator fines absolutely dwarf larger players such as Goldman Sachs (NYSE: GS) , JPMorgan Chase (NYSE:JPM) , Bank of America Merrill Lynch (NYSE: BAC) , Morgan Stanley (NYSE: MS) , and yes, even Lehman Brothers.

In this scenario, the bankruptcy wasn’t the cause of the missing funds. As Warren Buffett likes to say, you only know who’s swimming naked when the tide goes out. The bankruptcy was just the low-tide event needed to show that MF Global was always swimming naked when it came to its customer accounts.

Maybe Corzine knew about this, maybe he didn’t. Ever since the Sarbanes-Oxley Act, though, the bottom line is that the buck stops with the CEO. Corzine and the rest of the management team attested to the company’s internal controls in the most recent annual report, and it’s Corzine’s responsibility to set the tone for the company’s culture and what will and won’t be acceptable.

If this turns out to be the explanation for the missing funds, it would be an epic fail for Corzine as an effective leader.

Save the sinking ship!
Another explanation is that in a last-ditch effort to keep the company afloat while he tried to find a buyer, Corzine authorized customer funds to be used as funding for the company. This story suggests that Corzine was convinced he’d find a buyer and that as soon as he did, its deep pockets and better access to credit would allow MF Global to quickly and quietly replace the customer funds it had … um, reappropriated.

For Corzine, this would be the worst possible scenario. Using customer funds to fund the company is a big, big no-no, and the former CEO could be looking at jail time if he gave the go-ahead for that action.

One argument against this theory is that Corzine is (very) independently wealthy and wouldn’t risk the shame and jail time if he got caught doing something illegal. But that concern never stopped Bernie Madoff or Raj Rajaratnam — both of whom were extremely rich without having to do anything illegal, yet they did anyway. As fellow Fool Morgan Housel explained, sometimes rich people simply do stupid things.

Following an ouster as CEO of Goldman Sachs and a lost gubernatorial election in New Jersey, perhaps Corzine was ready to do anything he could to avoid one more loss.

Really … bad … bookkeeping
When Corzine took over as CEO, he went on a hiring spree and shook up the MF Global C-Suite. At the same time he was launching the ambitious strategy to turn the futures broker into a major investment banking player.

Among the executive shuffles that really jumped out at me was the shifting of Chief Financial Officer Randy MacDonald to head up the company’s retail division and the promotion of former principal accounting officer Henri Steenkamp to CFO.

MacDonald was a very experienced hand. He’d been MF Global’s CFO from 2008 to 2011 and prior to that he had been CFO of TD AMERITRADE (Nasdaq: AMTD) and Investment Technology Group (NYSE: ITG) , a vice president at Salomon Brothers, and an audit senior manager with Deloitte & Touche. Steenkamp, meanwhile, was a much younger guy whose career was eight years with PricewaterhouseCoopers and five with MF Global. April 2011 was the first time that the 34-year-old Steenkamp wore the CFO badge.

Was Steenkamp prepared for the CFO’s responsibilities? Did the executive musical chairs provide too much confusion?

All of this could have made the books really ugly at MF Global. Ugly enough to make $600 million look like it vanished into thin air? Possibly. But as the search for the missing money stretches on, a relatively benign explanation like this looks far less probable.

Are you looking for investment ideas safe from financial shenanigans? Then click here to request a new free report titled The Motley Fool’s Top Stock For 2012.

Written by Matt Koppenheffer and originally published here at fool.com. Authorised by Bruce Jackson.

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