By David S. Hilzenrath
Jon S. Corzine, the former U.S. senator and governor who presided over the collapse of the commodities brokerage MF Global, told lawmakers Thursday that he never intended to authorize a transfer of customer funds to the firm’s accounts and that if he did “it was a misunderstanding.”
Under pointed questioning by members of the House Committee on Agriculture, the New Jersey Democrat would not rule out the possibility that someone at the firm misinterpreted him as suggesting that the struggling firm tap into investors’ funds.
MF Global sought bankruptcy protection on Halloween after an effort to sell the troubled firm unraveled. The firm is now in liquidation.
In his prepared testimony submitted before the hearing, Corzine said he could not explain what happened to “many hundreds of millions of dollars” that the firm was holding for customers. He said he was “stunned” to learn shortly before the firm sought bankruptcy protection at the end of October that MF Global could not account for the money.
“I simply do not know where the money is, or why the accounts have not been reconciled to date,” Corzine said, according to the testimony.
The firm was required to keep clients’ money separated from its own. But more than $1.2 billion might be missing, the trustee overseeing the firm’s liquidation said last month. An attorney for the trustee confirms that assessment in testimony submitted for for hearing.