3 Serious Questions Jon Corzine Needs to Answer Now (Update 1)
Story updated to include comments of MF Global's former president and CFO.
NEW YORK (TheStreet) --Jon Corzine is in the hot seat again on Tuesday, testifying before the Senate Committee for Agriculture, Nutrition and Forestry.
By most lawyers' accounts, the former MF Global (MF) CEO successfully navigated his first testimony before Congress last week, avoiding invoking the fifth amendment but at the same time carefully choosing his words to ensure he was not incriminating himself in any way.
Appearing before the House Committee on Agriculture last Thursday, Corzine answered questions from 46 representatives for over three hours. But the questioning did not really lead anywhere.At the very outset, Corzine reminded Congress that he had no access to documents or any kind of correspondence since he left the firm over a month earlier. That meant that pretty much anything he said was based on his "recollection". He also was quick to claim that he had very little involvement of the day-to-day operations and was not an expert on "complicated rules and regulations" governing the various businesses. He flat out said that he did not know where the missing $1.2 billion is and, further more, he did not know who was responsible for authorizing any transfer from the customer accounts. "I never had any intention to authorize the transfer of segregated monies," he added, repeating the statement at various other points in the testimony. Corzine will likely stick to that script in his upcoming testimonies before the Senate Agriculture Committee and the House Financial Services Committee that will take place on Thursday. During Tuesday's hearing fellow MF Global executives added their own denials about using customer funds or directing others to shift assets and that they remain clueless about billions in missing money. "I understand that the Committee, MFGI's customers and the public have many unanswered questions about customer funds," said former CFO Henry Steemkamp. "I share many of these questions and I am personally extremely frustrated and distressed that they remain outstanding and that client funds are missing." Former MF Global president Bradley Abelow added during his testimony also said that he remains in the dark about the missing assets. "I am deeply troubled by the fact that customer funds are missing, and I can assure you that I share your interest, and the public's interest, in finding out exactly what happened." Abelow said. "At this time, however, I do not know the answers to those questions." Still, Washington will likely press Corzine for answers and observers expect the questions to be more advanced in the upcoming hearings. 1.Seriously? You don't know where the money is? The missing $1.2 billion will continue to be the main focus of the hearings, as speculation mounts that the transfers were not a result of some inadvertent operational error but a case of fraud. CME Chairman Terrence Duffy told House Agriculture Committee last week that MF Global had first internally reported to the CFTC a $900 million shortfall on October 28, three days before the bankruptcy, that resulted from an "accounting error." He said a day's investigation found no such error and on Monday October 31 at 2 a.m., MF Global informed the CFTC and CME that customer money had been transferred out of segregation to firm accounts.
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