The Hagstrom Report

Agriculture News As It Happens


Gensler to testify before House Ag Wednesday

Gary Gensler
Gary Gensler
Commodity Futures Trading Commissioner Gary Gensler is likely to come under intense questioning about MF Global, the regulation of commodity trading in the wake of the MF Global scandal, and the leadership of the CFTC Agriculture Advisory Committee when he testifies before the House Agriculture Committee Wednesday on the CFTC agenda in 2012.

Gensler, who once worked with MF Global CEO Jon Corzine at Goldman Sachs, recused himself from the CFTC investigation of the failure of the securities brokerage, but is involved in determining changes in policies and regulations to address the problems that arose.
Sen. Pat Roberts, R-Kan.

Sen. Pat Roberts
Senate Agriculture Committee ranking member Pat Roberts, R-Kan., said in a news release today that roundtable discussions on customer collateral protections held by the Commodities Futures Trading Commission pre-judge the MF Global investigation and have limited participation by farmers and ranchers, many of whom are still missing their own funds in the wake of the collapse of MF Global.

“While I appreciate the willingness of the CFTC to discuss solutions to the problem of missing customer funds following the collapse of MF Global, they don’t yet know, with certainty, just what the problems are in the first place,” Roberts said.

“The CFTC’s own investigation has not concluded,” he said. “This roundtable sets up a situation where changes to a decades-old system could be proposed before the CFTC knows what really went wrong. Certainly the resources of the CFTC can be better spent elsewhere, like first working to return money to the thousands of innocent victims whose funds are still missing. Perhaps Chairman Gensler should hold one of these roundtables in Kansas, where our farmers and ranchers are hung up in bankruptcy limbo.”

In a related development, Roberts and Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., sent a letter to Internal Revenue Service Commissioner Douglas Shulman Monday, asking the agency to advise farmers and others how to handle their MF Global losses.

“The court-appointed trustee applied for and received two extensions from your agency, but the former customers of MF Global must still pay their taxes on time,” the senators wrote.

“Many of these customers are farmers and ranchers who have significant planting responsibilities in the spring and we urge your agency to respect the difficult time constraints they are under,” the letter said.

“We ask that you issue guidance on the specific rules that apply in the reporting of losses from MF Global’s bankruptcy so that the firm’s former customers may be able to claim a loss on their missing funds even though the full investigation of the bankruptcy is incomplete. In requesting this guidance, it is our hope that you will work hard to ensure that filing tax returns does not become yet another undue burden for MF Global’s former customers.”

House Agriculture Committee Chairman Frank Lucas, R-Okla., and Rep. Michael Conaway, R-Texas, wrote Gensler on Feb. 17 to ask him to appoint a new chairman of the CFTC Agriculture Advisory Committee. The letter noted that the position has been vacant since October and said the committee could provide an important function in advising the commission on MF Global matters that had affected farmers.