The Hagstrom Report

Agriculture News As It Happens

MF Global hearings begin amidst report of possible wider financial scandal

The House Agriculture Committee holds a hearing today on the MF Global bankruptcy, only hours after the Senate Agriculture Committee published its list of witnesses for an MF Global hearing next week and Thomson Reuters reported that the diversion of client money may be much broader on Wall Street.

Today’s hearing, featuring an appearance by former MF Global CEO Jon Corzine, is scheduled to begin at 9:30 a.m.

MF Global, a commodities trading firm, declared bankruptcy on October 31. Since then, federal officials have been unable to find an estimated $1.2 billion in uninsured customer funds.

In a 21-page written testimony, Corzine says his involvement and understanding of the firm’s clearing, settlement and payment mechanisms and accounting was limited, and denies knowing what happened.

"I simply do not know where the money is, or why the accounts have not been reconciled to date," his submitted testimony states.

"Recognizing the enormous impact on many peoples’ lives resulting from the events surrounding the MF Global bankruptcy, I appear at today’s hearing with great sadness," Corzine writes in his opening remarks.

"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. Their plight weighs on my mind every day – every hour. And, as the chief executive officer of MF Global at the time of its bankruptcy, I apologize to all those affected."

See link below to Corzine's written statement and the submitted testimony of other witnesses.

Corzine's verbal testimony is expected to begin at about noon. Live audio and video of the hearing will be available online. See links below. The hearing will also be broadcast on C-SPAN.

The Senate Agriculture Committee has scheduled its hearing for December 13. Chairman Debbie Stabenow, D-Mich., has distributed her witness list, which will begin with the customers of MF Global, followed by Corzine and other MF Global officials, and ending with investigating commissioner Jill Sommers of the Commodity Futures Trading Commission. See full list below.

Meanwhile, Thomson Reuters has reported that few, if any clients of MF Global may get their money back, due to a legal loophole in international brokerage regulations.

According to the Thomson Reuters report, MF Global and other Wall Street firms may have “actively and aggressively” been circumventing U.S. securities rules at the expense of their clients, suggesting that the missing client money was not inadvertently “misplaced,” but “appropriated as part of a mass Wall Street manipulation of brokerage rules that allowed for the wholesale acquisition and sale of client funds.”

House Agriculture Committee Examination of MF Global Bankruptcy

House Agriculture Committee Written Testimony

December 13 – Senate Agriculture Committee Hearing Witness List

  • Roger Hupfer, grain elevator operator, Freeland Bean & Grain, Inc., Freeland, Mich.
  • Jeff Hainline, president, Advanced Trading, Inc., Bloomington, Ill.
  • Dean Tofteland, farmer, Luverne, Minn.
  • C.J. Blew, farmer/rancher; chairman, Mid Kansas Cooperative Association; director, CHS, Inc.; Hutchison, Kans.
  • Jon S. Corzine, former chairman and CEO, MF Global Holdings Ltd., New York.
  • Henri Steenkamp, chief financial officer, MF Global Holdings Ltd., New York.
  • Bradley Abelow, president and chief operating pfficer, MF Global Holdings Ltd., New York.
  • Terrence Duffy, executive chairman, CME Group, Chicago.
  • James W. Giddens, trustee, Securities Investor Protection Act liquidation of MF Global, Inc., New York.
  • Jill Sommers, Commissioner, Commodity Futures Trading Commission.