House Agriculture Committee Demands Facts on MF Global Collapse

WASHINGTON. December 8, 2011.Today, the House Agriculture Committee held a public hearing to examine the MF Global bankruptcy and reports that as much as $1.2 billion in customer funds have gone missing. The disappearance of customer funds from MF Global has badly shaken the trust that farmers, ranchers, and businesses across America place in futures trading.

Farmers and ranchers rely on futures markets to smooth price volatility and manage the risks that are inherent to production agriculture. Businesses have confidence in futures investments because of a protection that ensures that customer funds used to guarantee trades must be segregated from the broker’s funds. This separation of funds protects customers’ margin in the event that their trader defaults or files for bankruptcy.

The hearing marked the first public comments about the circumstances surrounding the bankruptcy from MF Global’s former CEO, Jon Corzine.

Members questioned Corzine and other witnesses about the events leading up to the bankruptcy and the whereabouts of customer funds.

"Today’s hearing was an effort to get answers for the constituents impacted by MF Global’s collapse. Former MF Global CEO Jon Corzine’s presence was critical to our objective, and unsurprisingly, we are finding that there are still more questions than answers about the missing customer funds. There is a great deal more to learn if we are to restore confidence in the futures markets. Ultimately, our primary focus is ensuring MF Global’s customers have their money restored. This hearing was the first step in that process, but it will not be the last," said Chairman Frank Lucas.

"The Agriculture Committee's oversight of the futures and derivatives markets is a responsibility that I do not take lightly. Wall Street, apparently not content to sully its own reputation, has now stained our well-run futures markets by apparently violating the supreme law - protection of customer funds. At the Agriculture Committee we are focused on the facts. It is the facts that will tell us what happened, who knew about it, and consequently, who was responsible. Only by uncovering the facts, can we prepare ourselves for policy responses that are necessary to address what has happened," said Ranking Member Colin Peterson.

Written testimony provided by the witnesses is linked below.

Witness list:

Panel 1

• The Honorable Jill Sommers, Commissioner, Commodity Futures Trading Commission, Washington, D.C.
• Mr. James Kobak, Lead Counsel for the Trustee for the Liquidation of MF Global Inc., New York, New York

Panel 2

• The Honorable Jon Corzine, Former CEO, MF Global Inc., New York, New York

Panel 3

• Mr. John Fletcher, General Manager, Central Missouri AGRIService LLC, on behalf of the National Grain and Feed Association, Marshall, Missouri
• Mr. Terrence Duffy, Executive Chairman, CME Group, Inc., Chicago, Illinois
• Mr. William J. Brodsky, Chairman and CEO, Chicago Board Options Exchange, Chicago, Illinois
• Mr. Dan Roth, President and CEO, National Futures Association, Chicago, Illinois
• Mr. Stephen Luparello, Vice Chairman, Financial Industry Regulatory Authority, Washington, D.C.
• Mr. Gerry Corcoran, Chairman and CEO, R.J. O’Brien & Associates, on behalf of the Commodity Markets Council, Chicago, Illinoisv

Financial Services Subcommittee Subpoenas Corzine

Washington, Dec 7 - The Financial Services Subcommittee on Oversight and Investigations, chaired by Rep. Randy Neugebauer, has voted unanimously to subpoena Jon Corzine, the former executive of MF Global.

Corzine is being directed to testify before the Subcommittee on Thursday, December 15 at 1 p.m. when the Subcommittee will hold a hearing to examine the causes and consequences of MF Global’s collapse as well as the level of coordination between the firm’s regulators.

Corzine had been invited to voluntarily appear before the Subcommittee on December 15 but he refused the invitation through his attorney.

Subcommittee Chairman Neugebauer said, “Mr. Corzine’s appearance before the Subcommittee is necessary to help identify the causes of MF Global’s collapse and what happened to its customers’ funds. Clearly, Mr. Corzine’s testimony, along with that of other witnesses, will help the Subcommittee to properly and thoroughly examine MF Global’s corporate behavior and will assist in identifying potential regulatory failures.”

“MF Global customers who have lost millions of dollars – all without a trace – underline the importance of the Subcommittee’s focus on the MF Global meltdown,” said Financial Services Committee Chairman Spencer Bachus.

Corzine served as MF Global’s chairman and chief executive officer from March 2010 until shortly after the firm filed for bankruptcy on October 31.

Other witnesses who have been invited to appear at the hearing are: •Bradley Abelow, Chief Operating Officer and President, MF Global •Gary Gensler, Chairman, Commodity Futures Trading Commission •Richard G. Ketchum, Chairman and Chief Executive Officer, Financial Industry Regulatory Authority •William Dudley, President, Federal Reserve Bank of New York •Robert Cook, Director, U.S. Securities and Exchange Commission’s Division of Trading and Markets •Terry Duffy, Executive Chairman,CME Group

The hearing will take place in room 210 of the Capitol Visitor Center. x

Oversight and Investigations Subcommittee Prepares for Hearing on MF Global

Press Releases.Washington, Dec 2. The Financial Services Subcommittee on Oversight and Investigations is examining hundreds of pages of documents and requesting other materials surrounding the bankruptcy of MF Global as it prepares for its hearing later this month.

Subcommittee Chairman Randy Neugebauer has requested information from regulators who were responsible for overseeing MF Global, and he continues working with attorneys for the brokerage firm’s former chairman and CEO Jon Corzine about having Corzine appear before the Subcommittee to answer questions.  The Subcommittee has scheduled a hearing on the collapse of MF Global for December 15.

“Jon Corzine is only one piece of the puzzle that the Subcommittee is looking at,” said Neugebauer.  “We began to delve into every aspect of MF Global’s collapse weeks ago, and the Subcommittee is sifting through documents, working to obtain documents, and ensuring our investigation is done in a thorough – and not a hurried – fashion.”

The Subcommittee is focusing its investigation on decisions and events leading up to the collapse of MF Global, the effectiveness of regulators in overseeing the firm’s activities, and the impact MF Global’s bankruptcy will have on its customers.

Among those the Subcommittee is seeking answers from are Gary Gensler, the Chairman of the Commodity Futures Trading Commission, and Mary Schapiro, the Chairman of the Securities and Exchange Commission. x