Ex MF Global Chief Corzine To Panel: I Don’t Know Where Customer Funds Are

December 8, 2011 12:53 AM
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Former Senator apologizes, but warns he may not be able to answer all questions

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

Attention from around the country will be focused on the House Ag Committee today and the testimony of former MF Global chief Jon Corzine, but answers to questions may not be what lawmakers and those negatively affected by the firm’s bankruptcy want to hear.

In prepared remarks (see link below), Corzine said he will try to answer questions but warns he has not had access to some documents and information since his departure from MF Global and there are some detailed aspects of the company’s operations that he is not fully aware of.

Perhaps the biggest question mark will remain that – where are the estimated $600 million to $1.2 billion in customer funds that are apparently missing. “I simply do not know where the money is, or why the accounts have not been reconciled to date,” Corzine will tell lawmakers.

Corzine opens his 18-page prepared testimony by apologizing to those affected by the situation, but warns lawmakers, “While I intend to be responsive to the best of my ability today, without adequate time and materials to prepare, I may be unable to respond to various questions members might pose.”

The session today is expected to be heavily attended by press, victims of the firm’s bankruptcy and others. Normally, the House Ag Committee will utilize a separate subcommittee hearing room for overflow during heavily attended hearings, but indications are the expected interest in today's session will be so heavy today that the panel will also utilize the House Natural Resources Committee hearing room as another overflow location.

Bottom line remains that it appears Corzine will at least not invoke the Fifth Amendment in total for his testimony, but he has made clear that could well be the case depending on the level of detail or the nature of questioning by lawmakers.

Those negatively affected by the situation have expressed great frustration at not being able to access funds in their accounts which were to be segregated from company funds. The Commodity Futures Trading Commission earlier this week unanimously adopted a rule change to remove some exemptions that had been previously approved which allowed for customer funds to be invested by other portions of a company under certain circumstances.

U.S. lawmakers, including members of the House and Senate Ag Committees, are pledging to fully review the situation and today’s hearing marks the first public attempt by lawmakers to determine what happened and more. The Senate Ag Committee has a hearing set for Dec. 13 and the House Oversight and Investigations Subcommittee of House Financial Services Committee will hold one Dec. 15.

Link to House Ag Committee hearing page which includes links to testimony by Corzine, regulators from the CFTC and others

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


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