Banking & Financial Institutions

Corzine grilled by former Senate colleagues

{mosads}Corzine, compelled to testify by a subpoena, sought to paint the final days of MF Global as a frenzied attempt to keep the company afloat long enough to sell it off, telling her that “enormous numbers of transactions were taking place in those final days.”

As he had Thursday before the House Agriculture Committee, he maintained he had no idea where the customer funds had gone, but agreed they must be tracked down by investigators.

“It’s clear that something was amiss and that needs to be discovered what that was,” he said.

After MF Global went bankrupt on Halloween, regulators discovered that up to $1.2 billion in customer funds that should have been kept segregated were missing, and are tearing through the company’s records in the hunt for those funds.

In her opening statement, Stabenow expressed frustration and disbelief that it could be so hard to track down the missing money.

“This isn’t the Dark Ages. MF Global didn’t keep their books with feather quills and dusty ledgers,” she said. “The rules about keeping customer money segregated are pretty straightforward. That it’s been over a month, and teams of lawyers and forensic accountants still can’t figure out what happened, raises very troubling questions.”

Corzine testified alongside Bradley Abelow, MF Global’s president and chief operating officer, who also served as Corzine’s chief of staff during his stint as New Jersey governor. Henri Steenkamp, MF Global’s chief financial officer, also was on the panel.

The two men, alongside Corzine, maintained that no orders were given to tap into segregated customer funds to keep the company afloat.

“I never directed anyone at MF Global to misuse customer funds, I never intended to, and as far as I’m concerned, I never gave instructions that anyone could misconstrue,” said Corzine.

However, the witnesses frustrated lawmakers by refusing several times to opine on what could have happened to the money, saying they thought it improper to speculate.

“As one kind of tries to pierce the veil here and figure out what happened, it’s incredibly difficult to do,” said Sen. Kent Conrad (D-N.D.), whose time in the Senate overlapped with Corzine’s.

“We’re trying to figure out, where did the money go? No one seems to know,” said Sen. Amy Klobuchar (D-Minn.). She joined the Senate in 2007, after Corzine left.

The opening act to Corzine’s testimony was four farmers who lost thousands of dollars in segregated funds from the bankruptcy. The men said the snafu damaged their confidence in financial markets, and offered little sympathy for the plight of the company’s executives on the disappearing dollars.

“Segregated funds should be segregated funds,” said Roger Hupfer, who runs a bean and grain farm in Michigan. “It’s our money.”

Tags Amy Klobuchar

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