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NEW YORK (
TheStreet) -- Over a year after the collapse of brokerage
MF Global Holdings(MF), U.S. lawmakers are set to detail how the firm's former chairman and CEO Jon S. Corzine made critical stragegic mistakes that led to the firm's failure.
But the findings are likely to further distance Corzine from the most troubling aspects of the firm's demise, such as billions in missing client funds.
On Wednesday, a U.S. House Financial Services subcommittee chaired by Rep. Randy Neugebauer (R., Texas) said that a yearlong investigation into the brokerage's collapse has uncovered key missteps made by Corzine, who formerly was a co-head of
Goldman Sachs(GS - Get Report) and a senator and governor for the state of New Jersey.
The report is likely to detail how Corzine's efforts to turn MF Global from a commodity trading specialist into a full service investment bank put the firm at risk and expanded it into Wall Street activities beyond its abilities. Less clear is whether the subcommittee findings will implicate Corzine for any operational errors or decisions that caused MF Global to have a $1.6 billion shortfall in client money at its Oct. 31, 2011 bankruptcy filing.
Already, Neugebauer has told
Bloomberg News that the congressional inquiry was unable to make much headway in identifying who is to blame for MF Global's missing client funds, which were supposed to be segregated from the firm's dwindling operations. According to
Bloomberg, after 50 interviews and three congressional hearings, the findings are likely to focus on Corzine's role in building a risky strategy for the MF Global rather than his actions in the days leading up to the firm's bankruptcy.
"Choices made by Jon Corzine during his tenure as chairman and CEO sealed MF Global's fate," Neugebauer said in an e-mail statement obtained by
Bloomberg. "By expanding MF Global into new business lines without first returning its core commodities business to profitability, Corzine ensured that the company would face enormous resource demands and exposed it to new risks that it was ill-equipped to handle," Neugebauer's statement adds.
Subsequent to MF Global's bankruptcy - the eighth largest in U.S. history - regulatory investigations and those conducted by bankruptcy examiners found significant weakness in the firm's operations, which were at the heart of a cash shortfall. The
Commodity Futures Trading Comission,
Securities and Exchange Comission and
Department of Justice continue to investigate MF Global's demise and how client funds went missing.