Jon S. Corzine, the former New Jersey governor and U.S. senator who led MF Global Holdings Ltd. before the firm sought bankruptcy protection on Oct. 31, has been called to testify Dec. 13 at a Senate Agriculture Committee hearing on the collapse.
Corzine, who was chairman and chief executive officer of the New York-based firm, was asked to testify alongside MF Global customers who face as much as $1.2 billion in missing funds, Senator Debbie Stabenow, the Michigan Democrat who leads the panel, said in a statement today.
“Anyone engaged in wrongdoing in this matter must be swiftly held accountable, to help bring justice to victims and to prevent further erosion of confidence in the financial system,” Stabenow said in the statement.
Corzine “is the only one that can answer the most pressing questions regarding the firm’s downfall and its continuing impact on thousands of Americans,” Senator Pat Roberts of Kansas, the panel’s top Republican, said in an e-mail today.
Corzine also has been called by the House Financial Services Oversight and Investigations subcommittee to appear at a Dec. 15 hearing “on the decisions and events leading to the collapse of MF Global,” that panel said in a Nov. 22 statement.
Gary Gensler, chairman of the Commodity Futures Trading Commission; Robert Cook, director of trading and markets at the Securities and Exchange Commission; William C. Dudley, the president of the Federal Reserve Bank of New York; and Bradley Abelow, MF Global’s president and chief operating officer, have also been asked to appear at the hearing, a person with direct knowledge of the House panel’s plans said on Nov. 22.
Representative Randy Neugebauer, the chairman of the House subcommittee, is investigating the relationships between regulators and the failure of the firm.
Neugebauer, in a letter to Gensler today, requested all communications and documents “related to the coordination of the CFTC’s oversight of MF Global” with the SEC, New York Fed, Financial Industry Regulatory Authority, CME Group Inc. (CME), National Futures Association and Chicago Board Options Exchange.
Neugebauer, a Texas Republican, also requested “all communications or records of communications between officials at the CFTC and representatives and employees of MF Global” from March 1, 2010, through Oct. 31, 2011, a period corresponding with Corzine’s tenure at the firm. The CFTC has until Dec. 7 to respond to the request.
Corzine, who was co-chief executive officer of Goldman Sachs Group Inc. (GS) before seeking public office as a Democrat, resigned from MF Global on Nov. 4 after the firm filed the eighth-largest bankruptcy in U.S. history. The firm made a wrong-way $6.3 billion bet on its own behalf on bonds of some of Europe’s most indebted nations.
The shortfall in MF Global Inc.’s U.S. segregated customer accounts may exceed $1.2 billion, according to James Giddens, the trustee overseeing the bankruptcy of the firm’s broker- dealer unit. MF Global Inc. was the brokerage unit of MF Global Holdings Ltd. (MF) The CFTC, SEC and U.S. Justice Department are investigating the missing money.
Steven Goldberg, a spokesman for Corzine in New York, declined to comment on whether Corzine would appear voluntarily before the committees. The panels have the authority to subpoena witnesses.
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