An executive of a financial exchange that oversees MF Global testified that the former head of the firm, Jon Corzine, may have known the firm was using customer funds to make a $175 million loan to a European affiliate. This statement from the head of the CME Group struck one of my fellow senators on the Agriculture Committee as a “bomb.”
It strikes me as a bombshell, too, because just minutes before, Mr. Corzine continued to express his lack of understanding of how MF Global lost up to $1.2 billion in customer funds – including money from Iowa farmers and brokers.
The revelation wasn’t in any prepared testimony. It came in response to senators’ questions. Many of us did our jobs to try to get answers. You can watch my exchange with the witnesses here and read about it here. You can watch the full hearing here.
It goes to show that congressional oversight – the kind I try to practice every day – yields results. Customer money doesn’t disappear on its own. Those responsible can and should be brought to account, whether it’s firms playing fast and loose with customer money in violation of the law or the regulators who are supposed to stop malfeasance.
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