CNN Money Reports: After weeks of speculation about how more than a billion dollars in customer money went missing at MF Global, former CEO Jon Corzine will give his side of the story on Capitol Hill Thursday.
Corzine, also a former senator and governor of New Jersey, has been called to testify before the House Agriculture Committee as it investigates what went wrong at the brokerage firm, which went bankrupt in late October after disclosing bets on risky European debt that sparked a panic among investors.
More than $1.2 billion worth of MF Global (MFGLQ) customer funds may be unaccounted for, according to the trustee overseeing the brokerage’s liquidation, a shortfall that has sparked investigations by the FBI and federal regulators. In Congress, the House Financial Services Committee and the Senate Agriculture Committee are investigating along with the House Agriculture Committee.
The case — the eighth-largest bankruptcy in U.S. history — has shaken faith in the markets and put business on hold for many owners of the roughly 38,000 securities and commodities trading accounts at the firm, from big-city traders to heartland farmers. Analysts believe MF Global may have unlawfully mixed customer money with its own, though no one at the firm has been formally accused of wrongdoing.
Corzine resigned from MF Global last month, but that hasn’t deterred scrutiny of his role in the firm’s collapse.
Both the House and Senate agriculture committees as well as a subcommittee of House Financial Services have voted to subpoena him. The Senate Agriculture and House Financial Services hearings are scheduled for next week.
Corzine had requested that the three committees move their hearings on MF Global to January — for logistical reasons and to allow sufficient time to prepare — at which point he would have voluntarily appeared, according to a source familiar with the matter. These requests were denied.
