Former US Senator, former Governor of New Jersey, former CEO of Goldman Sachs Group Inc. (NYSE: GE), and former CEO of MF Global, Jon Corzine will testify in front of the US House Agriculture Committee today regarding his role in the bankruptcy of MF Global and the apparent disappearance of more than $1.2 billion in investors’ funds. This is the first of three appearances Corzine will make before Congress, with both a House Financial Services Committee and a Senate Agriculture Committee hearing to come next week.
The investigation seeks to determine what Corzine knew about the failure of MF Global and where the missing money has gone. Corzine was subpoenaed by the three committees, which were unwilling to wait until January for his voluntary testimony. His prepared statement for today’s hearing is available here.
In his testimony Corzine briefly gives his background and why he took the job at MF Global:
I saw the possibility of taking part in the transformation of a challenged company by restructuring existing businesses and capturing opportunities available in the post-2008 financial environment.
Corzine goes on to describe in some detail MF Global’s use of repurchase agreements (“repos”) on European sovereign debt and says “I strongly advocated the trading strategy” the company used.
Regarding the missing money, Corzine says:
I was stunned when I was told on Sunday, October 30, 2011, that MF Global could not account for many hundreds of millions of dollars of client money. I remain deeply concerned about the impact that the unreconciled and frozen funds have had on MF Global’s customers and others. … I simply do not know where the money is, or why the accounts have not been reconciled to date. I do not know which accounts are unreconciled or whether the unreconciled accounts
were or were not subject to the segregation rules.
Following his testimony, the House committee members will get to ask questions. That’s when things will get interesting.
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