With $1.2 Billon in Customer Funds Missing, Chairwoman Stabenow Calls Former MF Global CEO Jon Corzine to Testify before Senate Committee
U.S. Senator Debbie Stabenow, Chairwoman of the Senate Agriculture, Nutrition and Forestry Committee, has called on former MF Global CEO and former New Jersey Governor John Corzine to testify before the Agriculture Committee at a hearing on December 13th. MF Global Holdings Ltd. declared bankruptcy October 31-the eighth largest bankruptcy in U.S. history. Since then, federal officials have been unable to find a significant amount of the firm's customers' money-it is currently estimated that $1.2 billion is missing.
The FBI and Department of Justice recently opened criminal investigations into the MF Global bankruptcy. The Senate Agriculture Committee has jurisdiction on oversight investigations over the sort of commodity trading in which MF Global was engaged.
"The farmers, small business owners and others who trusted this firm are now facing tremendous hardship and may ultimately never recover all of their money," said Chairwoman Stabenow. "A discovery of this magnitude demonstrates yet again the need for strong oversight and protections for consumers to prevent this sort of abuse from occurring. 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."
New York-based MF Global was in part a Futures Commission Merchant, coordinating the purchase and sale of futures contracts for its clients. Futures are a type of investment product used to hedge risk by locking in a known price on a commodity that otherwise fluctuates in value. For example, futures contracts can be used to lock in a set price on commodities like oil or agriculture products like corn and wheat.
MF Global customers included many farmers, ranchers, small business owners and other middle class Americans. As a result of the bankruptcy, MF Global customer accounts had been frozen and many customers still cannot access their own money. It is possible that customers will not reclaim all of their money, meaning some families could lose thousands, and in many cases tens of thousands of dollars.
As part of an ongoing investigation into this matter, Senator Stabenow has also convened a hearing December 1st to question top officials at the Commodity Futures Trading Commission as well as the Securities and Exchange Commission about their oversight of MF Global and examine whether the protections in place to prevent a catastrophe of this sort are adequate.