Corzine: 'I simply do not know' where MF Global money is
WASHINGTON -- Former New Jersey Gov. Jon Corzine apologized Thursday to the 36,000 clients of MF Global, the bankrupt commodities brokerage firm he led after leaving public service, and said he was "stunned" when he learned that their money was missing.
"I simply do not know where the money is, or why the accounts have not been reconciled to date," Corzine said in written testimony to the House Agriculture Committee, which is holding the first of at least three congressional hearings into the Oct. 31 bankruptcy.
Given the "extraordinary number of transactions during the New York-based firm's final days, Corzine said he doesn't know if there "were operational errors" at MF Global or somewhere else, "or whether banks and counterparties have held onto funds that should rightfully have been returned to MF Global."
The plight of former clients who have collectively lost about $1.2 billion "weighs on my mind every day — every hour," Corzine said the written testimony. "And, as the chief executive officer of MF Global at the time of its bankruptcy, I apologize to all those affected."
Corzine is yet to orally testify before the House Agriculture Committee, which took a break so members could cast votes on the House floor.
He is expected to testify around noon ET.
Corzine wrote that he will answer questions rather than invoke the Fifth Amendment right against self-incrimination because, as a former U.S. senator, he "recognizes the importance of congressional oversight."
The Justice Department has launched a criminal probe into the circumstances surrounding the bankruptcy, which was precipitated by MF Global's purchases of about $6.3 billion worth of bonds issued by heavily indebted European nations like Spain, Italy and Portugal.
Lawmakers suspect that MF Global used client money to place financial bets on European debt, though federal rules generally require client money to remain "segregated" from a commodity brokerage's own investment funds.
James Kobak, the attorney for the trustee overseeing MF Global's bankruptcy proceedings, told the House Agriculture Committee that the "best guess" is that clients have lost about $1.2 billion. Liquidating MF Global would probably result in recovering about 70% of that money, he testified.
MF Global is the eighth-largest bankruptcy filing in U.S. history. The company had assets of $41 billion and debts totaling $39.7 billion. It became the first U.S. casualty of the European debt crisis.
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