According to the December 8th usatdoay.com article, “Corzine: ‘I simply do not know’ where MF Global money is”, Jon Corzine has plans to tell a House committee he doesn’t know where clients’ money has gone missing following the demise of investment firm MF Global.
The defense, er, excuse, seems to fall somewhere between, or below, “She made me do it”, and/or “He started it”, and begs the question, does the word unconscionable even begin to address this man’s actions, or rather, in-actions?
Corzine, a former U.S. senator, has been subpoenaed to explain how MF Global, which he led for nearly 20 months, morphed into the eighth-largest bankruptcy in U.S. history, and why an approximate $1billion in client funds remains unaccounted for.
Corzine apologizes to “all those affected” by MF Global’s failure, in prepared testimony posted on the House Committee on Agriculture’s website.
On October 31st, the company filed for bankruptcy protection, and Corzine resigned on November 3rd, and has not spoken publicly since.
Corzine is quoted as having said in the statement, per the article: “I simply do not know where the money is, or why the accounts have not been reconciled to date.” In addition, he says he can’t say whether there were “operational errors” at MF Global or whether banks or other companies have held onto funds that should be returned to MF Global.
Corzine also said he will not invoke the Fifth Amendment to avoid answering the committee’s questions, something that many expected. However, he gives the caveat that he may not be able to answer particular questions. Since he resigned, he alleges he hasn’t had access “to the information that I would need to understand what happened,” or to “reconstruct the events that occurred during the chaotic days and the last hours leading up to the bankruptcy filing,” per the article.
Anything Corzine says is open season for use against him in court, if he is ever charged. In the meantime, the FBI and federal regulators are investigating MF Global.
Lawmakers in both parties may have a lot to ask him. Some have heard from farmers, ranchers and small business owners in their districts who are missing money deposited with the firm.
In his testimony, Corzine says MF Global sought to restructure the Europe investments in a way that reduced the risk to the firm. Agricultural businesses use brokerage firms to help reduce their risks in an industry vulnerable to swings in oil, corn and other commodity prices. However, MF Global actually increased risks by taking huge gambles on European government debt, and the move clearly proved disastrous. However, Corzine says he “strongly advocated” the investments and takes responsibility for them.
Legal experts say Corzine could be held personally liable for misrepresenting to investors the risks the firm had taken. In addition, other top MF Global executives also could face legal consequences. Corzine will say Thursday that the company’s board signed off on the investments and was aware of the risks involved.
According to Senate historian Don Ritchie, it’s the first time in over 100 years that Congress has subpoenaed a former senator to testify. Hear, hear. It seems it’s a centennial everyone could have done without.