The approval comes with many restrictions… begging the question “what’s the point?”

The SEC approved Jon Corzine’s new fund, despite protect from professionals in the financial community. The hedge fund approval, however, does come with a series of restrictions that limit its investment scope.

The agency order bars former MF Global chief Jon Corzine’s new fund from investing in less-liquid assets. The order also includes as series of “trading parameters.” The rules prohibit proprietary trading and require the firm to ensure any funds can be liquidated within five trading days.

Bloomberg reports that the order could limit Corzine’s operations to only highly liquid markets like currency trading and large-cap stocks.

Corzines’ comeback vehicle, the JDC-JSC Opportunity Fund, launched last year. The fund’s mission was to raise $100 million to $300 million within 12 months. By February, the fund had amassed $53 million.

However, by late-March, filings showed its regulatory assets surpassed $600 million. Leverage was a large contributor to that sudden jump.

Corzine’s fund had to apply to the SEC to register as soon as it crossed the assets threshold of $150 million.

Opposition to Jon Corzine New Fund

The SEC decision comes with plenty of controversy. In late July, traders and executives circulated a petition asking the SEC to block Jon Corzine’s new fund.

“Jon Corzine, who was responsible for the MF Global bankruptcy and banned for life from the futures industry, has applied for SEC registration as an investment adviser,” wrote John Lothien on his site. “Douglas Bry, President of Augur Trading Company and Ernest Jaffarian, President and CEO of Efficient Capital Management, LLC have written a petition to the SEC strenuously opposing the request for registration.”

Kyle Bass told Bloomberg that he had signed the petition. Bass was highly critical of the SEC’s consideration for Corzine’s application.

“Corzine levered the firm to make big sovereign bets on euro debt and then they misappropriated their customers’ money to pay for the margin calls,” Bass told Bloomberg. “Why on earth should the SEC allow him to have a license to handle customer money once again?”

The Source of the Controversy

Jon Corzine served as Chairman of Goldman Sachs Group (NYSE: GS) and as a Senator for the state of New Jersey. He took over MF Global in 2010. In an effort to bolster revenue, he increased his firm’s leverage to take a $6 billion position on European soveriegn debt.

When a financial crisis hit Europe in 2011, MF Global faced a cash crunch. Roughly $1 billion in client cash went missing for a short period as the company scrambled to meet obligations.

The firm went bankrupt. And while the accessing of seperate client funds should have constituted fraud, no one has faced any criminal wrongdoing.

The CFTC banned Corzine for life from trading on the futures markets.

However, he did not have to admit any blame in the failure of his firm.

Corzine famously issued the following statement before the House Agricultural Committee on Dec. 8, 2011:

“I simply do not know where the money is, or why the accounts have not been reconciled to date. I do not know which accounts are unreconciled or whether the unreconciled accounts were or were not subject to the segregation rules.”