Thursday morning the House Committee on Agriculture held a hearing to look at the bankruptcy of MF Global. In his prepared opening statement, Committee Chairman Frank Lucas, R-Okla., said that unfortunately, the very cornerstone of the futures markets, customer funds segregation, has been severely and suddenly called into question.
"Dozens of my constituents have been left not only without their property, but also without answers about why and how this happened," Lucas said. "A deeper and more comprehensive understanding of the facts will put us all in a better position to address this situation and begin to restore confidence in the futures markets."
In his prepared remarks, Committee Ranking Member Collin Peterson, D-Minn., said that it appears to him that no one has learned a thing; that Wall Street is operating as if 2008 never happened. From all accounts, MF Global was leveraged as much as 40 to 1, far higher than either Bear Stearns or Lehman Brothers when they folded. Peterson admitted that it is very possible that there is nothing in Dodd-Frank that would have prevented MF Global's financial collapse.
Meanwhile, Senator Debbie Stabenow, D-Mich., Chairwoman of the Senate Ag Committee has confirmed that John Corzine, former Chairman and Chief Executive Officer of MF Global Holdings, will testify next Tuesday before the Senate Ag Committee. The hearing begins at 10:00 a.m. Jon Corzine has been subpoenaed to compel him to attend the hearing. Corzine will be joined by Global's present President and COE, Bradley Abelow and MF's Chief Financial Officer, Henry Steenkamp. Former Customers and other affected by the financial collapse will fill out the three scheduled panels.
"My number one priority is to make sure that customers who have been devastated by MF Global's collapse get their money back," Stabenow said. "With an estimated $1.2 billion in customer funds still missing, MF Global executives have a responsibility and an obligation to come forward and answer to its customers, who placed their trust and money in MF Global's hands."
She says the bankruptcy of the firm has not only devastated thousands of customers but has shaken their confidence in the market.
On October 31, 2011, MF Global Holdings Ltd. declared bankruptcy, the eighth largest bankruptcy in U.S. history. Since then, federal officials have been unable to find a significant amount of the firm's customer's money. Next Tuesday's Senate hearing is the latest step in an ongoing examination of the circumstances surrounding the bankruptcy of MF Global Holdings Ltd.