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Corzine can’t explain missing MF Global funds

By Agence France-Presse
Thursday, December 8, 2011 17:34 EDT
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WASHINGTON — Former Wall Street high-flyer and Democratic politician Jon Corzine told US lawmakers Thursday he did not know what happened to an estimated $1.2 billion that disappeared from the accounts of now bankrupt broker MF Global.

Corzine — former US senator, New Jersey governor, head of Goldman Sachs and later MF Global — apologized to investors and claimed he could account for the loss of “many hundreds of millions of dollars.”

“I simply do not know where the money is, or why the accounts have not been reconciled to date,” he told lawmakers, as he faced the glare of TV cameras for the first time since the firm went bust.

MF Global collapsed in October after making vast bets on European sovereign debt — particularly Belgium, Italy, Spain, Ireland and Portugal — that turned sour amid the eurozone financial crisis.

Around $1.2 billion appears to be missing from the customer accounts of failed US broker, which especially served investors in commodity futures and derivatives, a liquidator of the company has said.

In contrite testimony, Corzine described for the House of Representatives Agriculture Committee in broad strokes his tenure at the head of the company and the events leading up to bankruptcy.

“I appear at today’s hearing with great sadness,” said Corzine, clad in a deep blue grey suit and tie, speaking softly and shifting in his seat as he began his testimony.

“My sadness, of course, pales in comparison to the losses and hardships that customers, employees and investors have suffered as a result of MF Global’s bankruptcy.”

The committee’s Republican chairman Frank Lucas said stressed the impact of the firm’s failure on farmers and agricultural businesses that used MF to hedge for shifts in commodity prices.

“Thousands of your former customers across the country are experiencing severe financial hardship because of events that occurred under your watch,” he told Corzine.

The former CEO acknowledged he had strongly advocated MF’s investment of its own money in eurozone debt, but insisted he knew nothing about the missing funds the day before its formal bankruptcy.

“Many transactions occurred in those last chaotic days.”

“(I) believed that (MF Global’s) investments in short-term European debt securities were prudent,” he said.

With Republicans sharpening the knives for regulators appointed by President Barack Obama, Corzine was at pains to stress his limited contact with the head of the Securities and Exchange Commission Mary Schapiro and the head of the Commodity Futures Trading Commission Gary Gensler.

In one telling exchange Democrat Collin Peterson said he did not know how address the former CEO, lawmaker and governor.

“Many people have bad names,” Corzine interjected.

Agence France-Presse
Agence France-Presse
AFP journalists cover wars, conflicts, politics, science, health, the environment, technology, fashion, entertainment, the offbeat, sports and a whole lot more in text, photographs, video, graphics and online.
 
 
 
 
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