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) 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.
In the wake of MF Global's late 2011 bankruptcy, TheStreet highlighted the challenges Corzine faced in trying find a profitable path for the company, after he took the reins of the commodity trader in March 2010. Notably, in an effort to transform MF Global a full service brokerage, Corzine made a big bet on the short term debts of European nations, in an effort to capitalize on the region's escalating woes and fund an expansion effort. After MF Global disclosed its European exposure in the summer of 2011, ratings agencies cut the firm's bond ratings to or below investment grade levels, putting it on the brink. While Corzine's European trade is likely to have worked out in the end - given a stabilization in Europe in 2012 -- his management of the firm's risk taking has come scrutiny and is likely to be a centerpiece of House subcommittee findings. Full findings are expected to be released later this week. In August, the New York Times reported that it's unlikely MF Global's demise will lead to a criminal case against Corzine or other key employees of the firm. Jefferies ( JEF), an investment bank that some expected to find a similar fate to MF Global, was sold to Leucadia National ( LUK) earlier this week. -- Written by Antoine Gara in New York